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Commerce Department Takes Action against Scam Mortgage Company

Company targeted Minnesota Veterans by using misleading advertising as a government agency

March 24, 2014


For Immediate Release:

SAINT PAUL, MN – The Minnesota Department of Commerce filed an order to show cause and statement of charges against Mortgage Investors Corporation, also known as Veterans Information Department, www.usmilitarymortgage.com, www.verteranhomeloans.com, and www.veteransmtg.com for allegedly engaging in fraudulent, deceptive, and dishonest practices to refinance veterans’ residential mortgage loans in violation of Minnesota law. 

Mortgage Investors Corporation initially came to the attention of the Commerce Department in 2011 for allegedly engaging in misleading advertising which gave the appearance that they were a government agency or sponsored by a government agency.  The Department issued a cease and desist order barring the company from advertising in Minnesota until it complied with the law. In the last three years, Mortgage Investors Corporation allegedly employed a direct-mail campaign sending no less than 2,167,012 advertisements to Minnesota veterans, in direct violation of its cease and desist order.

“We have zero tolerance for Mortgage Investors Corporation ripping off Minnesota veterans, including many who are seniors,” said Commerce Commissioner Mike Rothman.  "This Florida sham company perpetrated egregious mortgage scams, tricking our veterans into hidden fees, higher interest rates, and serious mortgage problems.”

The investigation conducted by the Commerce Department revealed that Mortgage Investors Corporation located in St. Petersburg, Florida used a Washington DC return address a half mile from the White House to allegedly deceive veterans into believing the company was a government agency.  In fact, the address is a UPS Store and the company remains in Florida.  In addition, the direct-mail letters used formatting similar to an official W-2 form, referred to itself as a “VA authorized direct lender,” and entitled mailings as “VA mortgage payment reduction notice.”

The refinance mortgage products offered by Mortgage Investors Corporation were also allegedly misrepresented.  In the 2,167,012 mailings, not one of the advertisements discloses that the teaser-rates were temporary and that payments could increase as the adjustable rate mortgage (ARM) reset after three years.  The Commerce investigation uncovered that in the telemarketing scripts used by employees, they implied the savings would last the life of a 30-year loan. Other documents provided to veterans indicated the rate and accompanying payment would drop after three years and stay below already historic lows for the remaining life of the loan.  Unfortunately, because the same mortgage product was sold in each case without evaluating whether the loan product was appropriate for a given customer, the Veterans listed would need between 4.5 – 8 years to recover the costs associated with the loan. In some cases, the refinanced mortgage exceeded the value of the home placing the homeowner underwater.

In all, the statement of charges states that Mortgage Investors Corporation accepted $1,036,910 in advance fees from 1,446 refinance transactions which was allegedly not deposited in a trust account in violation of Minnesota law.  Additionally, the company violated the 2011 cease and desist order by disseminating no less than 2,167,012 misleading written advertisements – each of which is constitutes a distinct violation. The other violations of Minnesota law include demonstrating incompetence and untrustworthiness related to the suitability of the mortgage loans, using bait-and-switch marketing, and engaging in “churning.” 

The Minnesota Department of Commerce is here to help

Before you select a mortgage company or an individual loan officer, check to see if they are licensed or if any enforcement actions have been take against the license of the mortgage originator. Visit the Department of Commerce website to use the License Look up Tool  or the online document search tool for enforcement actions.

If you have a complaint against a mortgage originator, contact the Department of Commerce Consumer Protection Line can be reached by email at consumer.protection@state.mn.us or by phone at (651) 539-1600 or (800) 657-3602 in Greater Minnesota. 



Notice and Order For Prehearing Conference

Mortgage Investors Corporation (.pdf)