BEAUFORT, SC (WCSC) - Court officials say LendingTree, a national online mortgage broker, is paying a $3 million penalty for failing to comply with state law requiring all mortgage lenders to make the appropriate disclosures to potential customers.
In 2008, Solicitor Scarlett Wilson and other solicitors from across South Carolina sued LendingTree for failing to make the required disclosures for mortgage brokers who do business in South Carolina.
"LendingTree misrepresented to consumers their mortgage applications would be competitively shopped for the best rates," said Solicitor Scarlett Wilson. "This led consumers to believe that LendingTree was working for them and not against them. Whether prosecuting criminals or bad corporate citizens, I"m going to use every option available to help protect the citizens of Charleston and Berkeley counties."
As part of the settlement, Charlotte-based LendingTree will pay more than $400,000 in statutory penalties to both Charleston ($284,447) and Berkeley ($121,904) counties as part of a more than $3 million statewide agreement.
Authorities say the company has begun paying a $3 million penalty for failing to disclose a number of required pieces of information, including its relationship with borrowers and fees the company receives from the lenders it pairs up consumers with.
State law requires all mortgage brokers to disclose that they are the agent of the borrower. Additionally, they must disclose all material facts and give a good faith estimate of any fees the broker receives, whether from the lender or borrower.
According to authorities, prior to the suit, LendingTree was not making these disclosures.