Mortgage broker fined, license revoked
A Woodbury mortgage broker that was the subject of an area couple's testimony during predatory lending hearings at the capitol last year is no more.
The WealthSpring Mortgage branch in Woodbury recently had its license revoked by the state Department of Commerce in a judgment filed in favor of Ed and Lisa Kivel of Baytown Township, who said they were scammed by the business in 2004. The business was also fined $20,000.
"The respondent's transgressions are serious and constitute serious violations of various parts of Chapter 58 and resulted in significant adverse financial consequences for the Kivel couple," stated Department of Commerce deputy commissioner Kevin Murphy in a memorandum on the case.
The Kivels had originally filed a lawsuit against the company for claims of mortgage fraud, but the case was thrown out by a judge because state statutes at the time did not allow a private right of action in predatory lending cases. That changed last year when the state Legislature passed a host of new predatory lending laws that gave consumers a private right of action in cases against mortgage lenders and brokers. But the Kivels didn't even have to go that far as the Department of Commerce decided to take up their case for them last fall.
According to the memorandum on the case, in 2004 the Kivels signed a loan transaction brokered by WealthSpring Mortgage. A representative of the Woodbury branch changed the loan amount the Kivels signed for by an increase of $4,500 without the Kivels' knowledge or permission.
"After the customer contacted the respondent with his concerns, the respondent communicated with the proposed lender and falsely stated that the loan was unapprovable," the memorandum stated.
The Department of Commerce judgment also found that the WealthSpring Mortgage representatives doing business with the Kivels delayed the process for an unreasonable amount of time by canceling an appraisal for the loan application.
WealthSpring Mortgage left its Woodbury location and no longer has its website or its listed telephone contacts in operation.
According to an article published by the Minneapolis/St. Paul Business Journal in 2003, WealthSpring Mortgage was originally named American Summit Mortgage, which was founded in 1997 by Michael McVay.
McVay was named chairman of Brickwell Bank in Woodbury in 2004.