FAIRBANKS CAPITAL SETTLES FTC AND HUD CHARGES
November 13, 2003
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Agencies Allege Fairbanks Engaged in Illegal Practices in Servicing Subprime Loans; Defendants Will Pay Over $40 Million for Consumer Refunds
The Federal Trade Commission today announced settlements with Fairbanks Capital Holding Corp., its wholly-owned subsidiary Fairbanks Capital Corp., and their founder and former CEO, Thomas D. Basmajian (collectively, Fairbanks). In separate settlements, the corporate defendants will pay $40 million in redress to consumers, and defendant Basmajian will pay $400,000 in redress.
In a complaint filed in federal district court, the FTC charges Fairbanks with engaging in a variety of unfair, deceptive, and illegal practices in the servicing of subprime mortgage loans. According to the FTC, the defendants, among other things, failed to post consumers’ mortgage payments in a timely manner and charged consumers illegal late fees and other unauthorized fees.
The settlements are contingent on approval by a federal district court in Massachusetts, and the settlement with the corporate defendants will be coordinated with a related settlement in a class action lawsuit. The case was jointly filed with the U. S. Department of Housing and Urban Development (HUD).
