Internet broker faces suit
LendingTree has violated S.C. law, solicitor claims
Ninth Circuit Solicitor Scarlett A. Wilson
Ninth Circuit Solicitor Scarlett A. Wilson is suing online loan broker LendingTree LLC, saying the company violated state law by not telling borrowers about the fees it receives from lenders.
Wilson's complaint was filed in Charleston County Court of Common Pleas on Sept. 24. It is one of at least nine civil lawsuits that prosecutors around the state have brought against the Internet company since August.
LendingTree has not formally responded to Wilson's complaint, and the company's spokeswoman could not be reached for comment Monday. Last month, it said that an Upstate lawsuit that raised the same allegations was without merit.
Wilson is seeking penalties of up to $7,500 for each violation of the Registration of Mortgage Loan Brokers Act that occurred in Charleston and Berkeley counties. She also wants LendingTree to forfeit any fees from those transactions.
The number of loans involved is not known, the solicitor's office said in a statement.
LendingTree, which is licensed as mortgage broker in South Carolina, solicits online loan requests from borrowers and circulates them among multiple financiers that compete for the business.
The Charlotte-based company describes itself as the "nation's leading online loan destination." It estimated that has handled 23 million requests resulting in $185 billion in closed transactions over the past decade.
Wilson alleged that LendingTree has violated and continues to violate state law by failing to tell borrowers about payments it receives from lenders. South Carolina-licensed mortgage brokers are required to provide a "good faith estimate" of any fees, "whether paid by the borrower, the institutional lender, or both," according to a legal statute cited in the lawsuit.
Another issue is a notice on LendingTree's Web site that the company "is not an agent" of the borrower. State law requires that every "loan agreement with a mortgage broker or originator must contain an explicit statement that the mortgage broker or originator is acting as the agent of the borrower in providing brokerage services to the borrower," according to the lawsuit.
The eight other South Carolina counties that have filed similar complaints against Lending Tree are Aiken, Anderson, Beaufort, Chesterfield, Florence, Greenville, Horry and York. All of those cases have been transferred to U.S. District Court.
Individual borrowers of LendingTree are not directly represented in Wilson's case so any penalties collected would go to the state. No trial date has been set.
Contact John McDermott at 937-5572 or jmcdermott@postandcourier.com.
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Comments
This article has 7 comment(s)
Posted by Carolina on October 21, 2008 at 10:39 a.m. (Suggest removal)
Sounds like the mortgage brokers of South Carolina are telling LendingTree to get off their turf. What's the matter? Not making enough money screwing people with sub prime mortgages due to the financial crisis? I love the fact that any damages collected goes to the state and not the people who did business with them.
Posted by mkris on October 21, 2008 at 12:39 p.m. (Suggest removal)
HELLO? Did you read the article.... Its about full disclosure and the FAILURE of Lending tree to follow the requirements of the LAW! She's not one of my favorites, but she's doing what she was elected to do: enforce SOUTH CAROLINA's LAWS.
Posted by eyeinthesky on October 21, 2008 at 1:33 p.m. (Suggest removal)
yes...because there are no "real" crimminals out there to prosecute!
Speaking of victimless crimes!
Posted by Carolina on October 21, 2008 at 1:39 p.m. (Suggest removal)
Your post is rightfully noted. There are alot of laws broken every day and many go unpunished. My point is the fact that this in an internet company that has the ability to broker a mortgage over the phone instead of a local brokerage firm. I bet enough research will show that the South Carolina mortgage brokers are the ones that helped get the suit started. Right or wrong, I am simply pointing out that this is another example of "play fair or get off my lawn". Plus, this should be a class action suit to benefit the individual borrowers, not the state.
Posted by Carolina on October 21, 2008 at 2:18 p.m. (Suggest removal)
Thewexler, I just went to the website for Redfin. What an excellent concept! A partnership to sell your house instead of a broker trying to rape you blind. I bet they will not get a foot in sc anytime soon with that kind of business.
Posted by glevans on October 21, 2008 at 3:49 p.m. (Suggest removal)
I don't think it is a good idea to use an online lender/credit card company/credit report company or anything that doesn't have an actual office - for anything. You should support your local economy not take chances with an online company that don't inform you up front of what the charges will be and how your personal information will be used.
Posted by JC on October 21, 2008 at 11:24 p.m. (Suggest removal)
Why doesn't the State Attorney General file the suit on behalf of all? - more clout - makes more sense.