Mortgage Lender Sued Over Allegations of Unlicensed Employees, Misleading Mortgage-Origination Practices

  • The CFPB sued mortgage lender 1st Alliance Lending, LLC, and related individuals (collectively “1st Alliance”) over allegations that it used unlawful and misleading mortgage-origination practices in violation of the Truth in Lending Act and its implementing regulation, Regulation Z, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Mortgage Acts and Practices-Advertising rule (“MAP Rule”), and the Consumer Financial Protection Act.
  • The complaint alleges that, among other things, 1st Alliance used unlicensed employees to engage in mortgage-origination activities that require state licensing, thereby depriving consumers of accurate and timely loan information. 1st Alliance also allegedly required verification documents from consumers prior to providing them with loan estimates, denied credit to consumers based on their reports without giving them the legally mandated adverse action notice, and misled consumers with respect to whether they were preapproved for a mortgage or guaranteed a particular program or term.
  • The complaint seeks injunctive relief, consumer redress, damages, disgorgement, civil money penalties, and costs.