CA Lenders Settle With NV Regulators

Solomon Capital LLC and related company XBancorp entered into a settlement agreement with the Nevada Mortgage Lending Division after an 11-month investigation concluded the Hispanics targeted in the scheme ultimately wound up in foreclosure, according to an announcement by the division Wednesday.

“These companies devised a scheme to take advantage of Nevada citizens using a Spanish-speaking interpreter to defraud these individuals,” division Commissioner Scott Bice said in the announcement.

Solomon and XBancorp “conspired to perform debt adjusting, credit repair and lending to ultimately defraud those who were not fluent in English out of the equity that had been amassed since the appreciation in the market the last several years,” the division reported.

As a result of the investigation, the companies agreed to make over $414,000 in restitution to 28 borrowers, according to the announcement.

“A lot of these people have no wiggle room whatsoever and are first-time homeowners,” division spokeswoman Amanda Penn told MortgageDaily.com. “This is a big victory for us. Our ultimate goal is to get restitution for consumers.”

But Mitchell Grod, chief executive of wholesale lender XBancorp, pointed out to MortgageDaily.com that his company does not have to make restitution.

“We have to pay $20,000 for the investigation the division conducted,” Grod said. “There’s no guilt. We’re neither denying or admitting fault.”

Solomon has to pay the state $45,000 in investigative and attorneys’ fees, Penn said.

Solomon was not immediately available for comment.

Additionally, Nevada broker Superior Estate Inc., which does business as First American Mortgage, paid a $30,000 fine to the division. The broker was sanctioned for violating record-keeping and disclosure laws as it failed to include on its monthly loan report four loans that were processed in its office by an unlicensed XBancorp agent, Penn added.