A mortgage company beset by FTC violations and federal lawsuits has axed nearly 500 employees, and announced it will cease new lending.
Mortgage Investors Corp., a major refinacer of home loans for veterans, has made a shock announcement that it will stop making new home loans, The Tampa Bay Times has reported. The company said it would also cut 476 jobs.
"It's been a hard day, one of the hardest days of my life quite frankly. It's not a pretty day," the company's chairman, Bill Edwards, told the Times.
Edwards blamed the move on Dodd-Frank lending regulations, claiming that MIC would not have the technological capacity to comply.
But the company has been beset by problems arising from allegations that it violated regulations. In July, the Federal Trade Commission announced it had reached a $7.5m settlement with Mortgage Investors after filing a complaint accusing the company of calling 5.4 million numbers on the Federal Do Not Call registry to offer mortgage refinancing.
The company also suggested to consumers that they could get no-cost fixed-rate mortgages, even though it only offers adjustable rate mortgages, the FTC alleged.
In spite of complaints regarding the company's sales tactics, Edwards claimed the blame for Mortgage Investors' near-shutdown lay solely with Dodd-Frank.
"Our entire team has dedicated enormous energy to reviewing all aspects of the new regulations that are now coming into effect. Sadly, we've concluded that it's no longer cost-effective for us to originate new loans for our nation's veterans, nor do we understand how to implement these new government guidelines," he told The Times.