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Office of the Commissioner of Financial Regulation

 

DLLR Division of Financial Regulation reaches Settlement in Eastern Shore Mortgage Fraud Case

 

Settlement could return millions to defrauded homeowners

 

(BALTIMORE, March 23, 2011) - The Maryland Department of Labor, Licensing and Regulation's Division of Financial Regulation reached a settlement yesterday with Frank Ward, III that will result in millions of dollars of recoveries and savings for victims of mortgage fraud. The settlement, which was reached during an administrative law hearing in Salisbury, includes credit to borrowers for interest and fees previously charged in violation of Maryland law, reductions in future payment obligations and other benefits.

Mr. Ward and his company, the Money Centre, had been under investigation for unlicensed mortgaging activities and making deliberate misstatements, misrepresentations, and omissions during the mortgage lending process with the intent to defraud borrowers. The Deputy Commissioner of Financial Regulation issued a summary order to cease-and-desist in December to Mr. Ward, the Money Centre, Ltd., Ward Construction, Inc. and Annette Coston, an employee of Mr. Ward.

"I commend Commissioner Mark Kaufman and the entire Division of Financial Regulation for standing up for Maryland's homeowners," said DLLR Secretary Alexander M. Sanchez. "During this national recession and amidst a housing crisis that has cost far too many families their homes, we need to continue our firm oversight and ensure that all Marylanders are protected against predatory lenders and scam artists."

Under conditions of the settlement, Mr. Ward will pay a civil penalty of $75,000 to the state. Mr. Ward will also have to return to borrowers any interest and costs that he collected in violation of Maryland's laws and convert all existing mortgages (approximately 50) to principal only loans. Mr. Ward, Ms. Coston and the Money Centre, Ltd. also agreed to a seven year ban from participating in any mortgage activity. The Division of Financial Regulation estimates that the settlement will save defrauded homeowners more than $4 million, inclusive of interest payments that will be eliminated in coming years.

"This settlement will provide significant relief to homeowners who have been harmed by mortgage fraud and prevent future abuse," said Mark Kaufman, Commissioner of Financial Regulation.

The Division of Financial Regulation licenses and regulates mortgage lenders, servicers and originators, as well as consumer debt collection agencies, check cashers, consumer finance companies and other financial intermediaries. In addition, the Division charters and supervises over 60 banks, credit unions and trust companies.

Individuals who believe they may have been victims of Mr. Ward's mortgage fraud and are eligible to participate in the settlement can email Tom Koehler in DLLR's Division of Financial Regulation.