Maine’s office that regulates mortgage companies has revoked the license of East Coast Funding Inc., a Brewer loan broker. A consent agreement signed by the parties March 8 declares that “East Coast is no longer qualified” to arrange loans for Maine consumers.
The Office of Consumer Credit Regulation began its investigation in late January based on allegations that Francis Fox, owner of East Coast, had filed false corporate documents, had failed to segregate consumers’ funds from working capital and had failed to pay appraisers.
“Our investigation found that Mr. Fox had listed individuals as officers of his corporation, when in fact those individuals had no idea they had been named in those capacities,” said Will Lund, director of the state agency. “Further, we found that Mr. Fox had not maintained a separate escrow account for consumer funds as required by law, and that he owed appraisers a great deal of money for services ordered and rendered but not paid for.
East Coast violated the provisions of Maine law that require all loan brokers to demonstrate financial responsibility, character and fitness and to operate their businesses honestly and fairly.
The consent agreement requires that Fox provide the state with a list of all current customers, so that those clients can be transferred to a properly registered loan broker or so that their fees can be refunded. The winding up of the business, which must be completed by April 1, will be done under the close supervision of the state agency.
“Any Maine consumers who can demonstrate that they were harmed by East Coast’s failure to comply with the law can make claims against a surety bond filed with the state,” said David Leach, the state agency’s investigator who, together with the Attorney General’s Office, developed evidence against East Coast.
The Consent Agreement prohibits East Coast from applying for a license in the future. It also prohibits its president, Fox, from engaging in the financial services industry unless future employers are provided with a copy of the consent agreement. Fox is required to pay $500 to the state for the costs of investigating the case. Violation of any terms of the agreement can result in a penalty of $10,000 to Fox.
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