The state Department of Financial Institutions announced Friday that it has issued a cease-and-desist order against a Louisville mortgage company.
The order prohibits Home Ownership Possibilities for Everyone LLC, or HOPE, from continuing to operate in the mortgage business, according to a state news release. Among the allegations made by the state are that the company was not licensed or exempt from needing a license, charged illegal upfront fees, and made misrepresentations to customers or concealed facts.
The state's order demands the company immediately stop doing business and put all money from Kentucky customers into an escrow account to be used for restitution.
"This is a case of a product that really was too good to be true," Nicole Biddle, a division director with the financial institutions department, said in a statement. "HOPE claimed to offer mortgage loans for purchasing or refinancing at less than 2 percent and with no closing costs. But for some loans that have closed in Kentucky, no funding was actually provided."
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Representatives of the company could not be reached for comment on Friday. Its Web site notes the company is no longer "taking any new applications."
The state said HOPE had at least 230 loans in the process of origination. Of those, 52 involved properties in 17 cities throughout Kentucky. The state said at least four of those loans have closed but weren't funded. Also, the state accused the company of charging an up-front, nonrefundable membership fee of $300 and an additional 3 percent to 3.5 percent of the loan amount paid in advance. State law says application fees may not exceed $100 and bars up-front fees, according to the statement.
The state said that anyone who wishes to file a complaint against HOPE can do so online at www.kfi.ky.gov/complaint/ficomplaint.htm or by calling 1-800-223-2579.