Mitch Heffernan is involved in starting a new mortgage business, but his old company - the now-defunct Mortgage Lenders Network - could land him in plenty of trouble with the state for not paying wages earned by his former employees.
The state Department of Labor confirmed Monday that it has applied for an arrest warrant in Superior Court in Middletown that would charge Heffernan - the former president of Middletown-based Mortgage Lenders - with 61 counts of failing to pay wages.
The wages that the department alleges were unpaid total $3 million, mostly in sales commissions. The commissions range from $5,000 to $300,000.
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March 2 (Bloomberg) — New Century Financial Corp. disclosed a criminal probe and regulators told Fremont General Corp. to halt improper subprime loans, piling new scrutiny on two home lenders who’ve already lost about half their value this year.
Investigators are focused on New Century’s accounting and trading in its securities, the Irvine, California-based company said in a filing with the U.S. Securities and Exchange Commission today. Fremont said a regulatory order will require it to stop giving mortgages to people who can’t repay, and it plans to get out of the subprime home-loan business.
“It just shows there was a lack of principles and standards,'’ said David Hendler, an analyst at CreditSights Inc. in New York. “There was no real major guardian of conservative standards anymore, and that’s a danger to the safety of the market.'’
A surge in defaults on mortgages to the least-creditworthy borrowers has forced more than 20 lenders to close or seek buyers since the start of 2006. Earlier today, the Federal Reserve told banks to scrutinize their underwriting standards on subprime mortgages and make lending terms easier to understand.
New Century said in its filing that the U.S. attorney for the Central District of California is running a criminal inquiry “in connection with trading in the company’s securities, as well as accounting errors regarding the company’s allowance for repurchase losses.'’
SEC Seeks Meeting
SEC staff members also told New Century they want a meeting to discuss events that preceded the company’s Feb. 7 disclosure of a pending restatement to earnings, according to the filing. NYSE Regulation Inc. is reviewing trades that took place before Feb. 7 and has requested information, the company said.
New Century, the second-biggest subprime lender, said it will cooperate with the three inquiries. Laura Oberhelman, a spokeswoman for New Century, declined to comment on the filing. Earlier today, the company cut 300 jobs, or about 4 percent of its workforce, she said.
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Filed under News, Finance, Compliance, Credit, Secondary Mortgage Market, Business, Corruption, Accounting, Wholesale Lenders, Litigation, Mortgage Blog by Godfather
U.S. Government studies report that up to 70% percent of home mortgage loans contain errors!
Accounting errors in home mortgage loans can ange from a few hundred dollars to tens of thousands of dollars!
These so-called “errors” are in many circumstances complex and fraudulent accounting schemes that banks and mortgage companies use
to “play with your money” to generate additional cash flow, income and profits!
Most banks and mortgage companies know that you won’t ask how they “calculated” the “payoff” or principal balance figure they quote you!
A well-known bank once charged a customer over $3000.00 per month for five months [over $15,000] of escrow payments when the annualtaxes were only $2,608.28 and monthly P & I payments were only around $790.00!
A well-known mortgage servicer owned by a major Wall Street investment bank refers to its customers as “smucks” in their policy manuals!
• Some banks and mortgage companies have foreclosed or are foreclosing on homes, notes and deeds of trusts they don’t even own or have a right to!
• Well-known banks and mortgage companies in Florida are lying and providing perjured testimony, false affidavits and frivolous pleadings in cases involving mortgage foreclosure to courts in Florida!
• You or your family members and friends may be unknowingly be contributing to these abuses by having investments in your own IRA’s, stocks,
mutual or pension funds that are holding mortgage backed securities that deal with subprime lending!
For the majority of Americans, their home is the largest single asset they will ever own. Home ownership is part of the American Dream. Yet today, many elderly, minority, disabled, disadvantaged and non-English speaking Americans are living the American Nightmare rather than the American Dream. Their dreams of home ownership and financial security are being stripped away by 21st Century loan sharks backed by a new white collar Mafia. Instead of using guns and knives to intimidate and to rob their victims, the new weapons of choice are phones, computers, computer programs the mail and unscrupulous lawyers. These extortionists, con-artists and predators inflict harsher pain, suffering and injury upon their victims than a local loan shark can.
Instead of breaking bones and knees, this new breed of crooks breaks dreams, lives, livelihoods and families. They illegally take away their victim’s homes, ruin their credit, destroy their families and damage their businesses. Often, the scars left by these criminals last years and even a lifetime that takes longer to heal than a broken bone.
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HARTFORD, CT - Attorney General Richard Blumenthal and Department of Consumer Protection (DCP) Commissioner Edwin R. Rodriguez sued CTX Mortgage Company for illegally raiding its competitor for employees and secret consumer lists.
Nevada-based CTX operates a residential mortgage financing office in Milford. One of its competitors, Charter Oak Lending, LLC, provides the same services out of Danbury doing business as Danbury Mortgage.
In September 2004, CTX met with one or more employees of Danbury Mortgage at a training conference in which it allegedly began a strategic effort to recruit Danbury Mortgage employees over the following months and years.
In exchange for bonuses and other benefits, CTX used these employees to continue recruiting additional employees from Danbury Mortgage and access confidential information about its competitor, including consumer lists, loan applications and referral sources. CTX eventually opened an office in the Danbury area staffed entirely with employees it recruited from Danbury Mortgage.
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