New Jersey Department
|For Immediate Release: March 25, 2004||
For Further Information:: Mary Cozzolino or Bill Heine - (609) 292-5064
Department Examination Benefits Consumers
Mortgage Company to Refund $1.2 million
TRENTON - More than 700 New Jersey consumers will be refunded an average $1,716 each as a result of a Department of Banking and Insurance examination into the business practices of American General Financial Services Inc.
American General Financial Services Inc., which provides loans, retail financing and other credit-related products in 44 states, Puerto Rico and the U.S. Virgin Islands, will pay $1.2 million in restitution to New Jersey consumers after regulators at the Department of Banking and Insurance found homeowners had been overcharged on their home equity loans.
"My Administration is ensuring that consumers are protected in financial transactions," Governor McGreevey said. "From rooting out bad actors, to eliminating predatory practices and forcing lenders to meet their obligations, we are sending a clear message - lenders will be held accountable to the consumers they serve."
The refund stems from a 2002 examination, during which regulators discovered that consumers were charged points significantly in excess of the amount indicated on their predisclosure forms. The Department found that disclosures to consumers on home equity lines of credit generated between January 2000 and April 2002 indicated a range of points to be assessed of zero to 1 percent, while in practice consumers were charged points that exceeded that range. The company acknowledged the problem and agreed to the refund.
"Consumers have a right to know the terms of the loans they are buying and to expect lenders to meet their commitments," Banking and Insurance Commissioner Holly C. Bakke said. "When lenders fail to do this, the Department takes action."
"The Department is committed to protecting consumers, and periodic inspections by our examiners help us accomplish that goal," said H. Robert Tillman, director of the Department's Division of Banking. "Today's announcement helps illustrate that these examinations produce real results for New Jersey consumers."
Last August, a Princeton-based mortgage lender agreed to honor the interest rates promised to some 300 borrowers after the Department began investigating complaints that the "lock-in" agreements were not being met, resulting in a substantial savings for consumers.
All total, the Department has recovered some $32 million on behalf of consumers since January 2002.