OLYMPIA – Washington’s state financial regulatory agency said Tuesday it intends to revoke the business license and fine Paramount Equity Mortgage Inc., for “deceptive lending practices.”
The California-based company, with offices in Bellevue and Spokane, is widely known for radio ads featuring owner Hayes Barnard.
According to the state Department of Financial Institutions, the company charged unearned fees, failed to make required disclosures and charged customers to buy down interest rates without actually reducing the rates.
The company made more than 1,700 mortgage loans to Washingtonians in 2007, collecting more than $8.7 million in fees, according to DFI. Deb Bortner, director of DFI’s consumer services division, said her agency doesn’t know how many of those loans were in the Spokane area.
“In today’s market, we simply do not need a mortgage broker engaged in deceptive conduct doing business in this state,” said Bortner. Paramount, she said, “failed to make proper disclosures in almost every loan we reviewed.”
Paramount officials in Seattle and Sacramento did not respond to calls seeking comment. But the company told Bortner that it wants to meet to discuss the charges, which Paramount officials said they would vigorously dispute.
The state wants the company to repay any unearned fees to borrowers. The agency says it’s also found dozens of loans that were originated by people not licensed by the state. In those cases, Bortner said, the state wants all fees returned to the borrower.
In its radio ads, the company offered low rates, free appraisals and guaranteed the lowest interest rates and fees. In reality, Bortner said, the fees the company charged more than covered the appraisals “and their guarantee of the lowest rates and fees cannot be substantiated.”
DFI’s investigation into Paramount’s mortgages is ongoing. Anyone who believes they were harmed in their dealings with Paramount can file a complaint with the Department of Financial Institutions. The agency’s Web site is www.dfi.wa.gov, then go to “consumers” and click on “file a complaint.” Or call (877) 746-4334 and say you want to file a complaint.
The state’s charges name Paramount and its owners: president Hayden D. “Hayes” Barnard, designated broker Matthew J. Dawson and chief financial officer John J. “Jason” Walker. Each of the three owns a one-third stake in the company, according to DFI.