Washington borrowers may be due payments in 'Predatory Lending' settlement

 CONTACT: Mark Thomson - (360) 902-8787

(Olympia, April 22, 2002) Washington consumers who got home mortgage loans from First Alliance Mortgage Company have been notified by Washington state's Department of Financial Institutions (DFI) that they may be eligible for compensation in a predatory lending settlement announced by the Federal Trade Commission (FTC).

 The settlement with the California firm and its owner, Brian Chisick, culminated a lawsuit brought by the FTC and five states in 2001.

 "We fully support the FTC's actions to stop lenders who prey on consumers," said Mark Thomson, DFI's Acting Director, in praising the FTC for its work on the case. "They moved quickly and did an excellent job for consumers all across the nation."

 In 1999, the Department of Financial Institutions filed separate charges against First Alliance Mortgage Company, which resulted in revocation of the company's license and a halt to its doing business in Washington. The company filed for bankruptcy in 2000.

 Nationwide, nearly 18,000 borrowers could receive as much as $60 million dollars in compensation under the settlement terms. The settlement creates a consumer redress fund that will include all the remaining assets of First Alliance and its affiliates, as well as a payment of $20 million from Chisick and his wife. The settlement amount is one of the largest consumer protection recoveries in FTC history.

 Washington consumers who got home mortgage loans from First Alliance between January 1992 and March 23, 2000 may be eligible for a payment. The settlement, however, must still be approved by a federal district court in Santa Ana, California.

 The FTC advises that, at present, there's nothing that borrowers who may be eligible for payment should do. They will be sent notices by the court and the FTC explaining the process and how the settlement funds will be distributed.

 This settlement represents the latest law enforcement action in the FTC's efforts to combat fraud and deception in the "subprime" market, which includes homeowners with poor credit ratings who may not be able to qualify for conventional loans. In the last three years, the Commission has brought 15 enforcement actions against subprime lenders allegedly engaged in unlawful practices.

 For more information about the settlement, consumers may call the FTC's First Alliance Consumer Hotline, toll free, at 877-862-0886 or access the FTC website at http://www.ftc.gov.