Minnesota AG Sues California Company, Alleging Fake Refi Deals
California’s Meredian Financial Corp. targeted homeowners struggling with adjustable interest-rate mortgages and offered them lower rates through fake refinance deals, while pocketing the service fees, according to a Minnesota state court lawsuit filed today.
According to Lori Swanson, Minnesota’s attorney general, Meredian Financial pretended to be the homeowners’ current mortgage company. Fees for the alleged refinance were between $1,000 and $4,000, according to the Minneapolis Star Tribune, and clients were told they’d get their money back at closing. But once clients paid the fees, the newspaper reports, Meredian would stop doing work for them.
“Meredian targeted homeowners struggling in the troubled economy who were looking to get out of an adjustable-rate mortgage or lower their interest rate by refinancing,” Swanson said in a statement announcing the suit. The company’s tactics, she said, “left homeowners with the short end of the stick.”
The Minnesota action is not the first out-of-state complaint that the Costa Mesa, Calif.-based company has received. Last year, according to the Minneapolis Star Tribune, Georgia officials ordered Meredian Financial to stop doing business in their state.
Both the Minneapolis Star Tribune and the Associated Press report that they left messages with Meredian Financial seeking comment on the lawsuit that were not returned.
