Arizona Attorney General settles with Pulte on consumer protection violations
Attorney General Terry Goddard has announced a $1,181,400 settlement with Pulte Home Corporation and Pulte Mortgage LLC, resolving the Stateâs investigation into allegations that Pulteâs pre-qualification practices, earnest money deposit policies and Spanish-language marketing efforts violated Arizonaâs consumer protection law. The settlement, in which no admission of fault or finding of liability is made, will be submitted to the Maricopa County Superior Court for final approval...homebuilders and lenders have a legal obligation to provide their customers with complete and accurate information. I commend Pulteâs commitment to amend its practices and bring more transparency into buying and financing a Pulte home.â
Arizona Attorney General settles with Pulte on consumer protection violations
Wed, 2010-08-11
Arizona - Attorney General Terry Goddard has announced a $1,181,400 settlement with Pulte Home Corporation and Pulte Mortgage LLC, resolving the Stateâs investigation into allegations that Pulteâs pre-qualification practices, earnest money deposit policies and Spanish-language marketing efforts violated Arizonaâs consumer protection law. The settlement, in which no admission of fault or finding of liability is made, will be submitted to the Maricopa County Superior Court for final approval.
âCertainly homeowners need to educate themselves about all of their options when buying a home,â Goddard said. âBut homebuilders and lenders have a legal obligation to provide their customers with complete and accurate information. I commend Pulteâs commitment to amend its practices and bring more transparency into buying and financing a Pulte home.â
âPulte respects the concerns of the Arizona Attorney General and commends the Office for its ongoing efforts to protect consumers throughout the homebuying process,â said John Chadwick, southwest area president of Pulte Group Inc. âWe hold ourselves to the highest standards in customer services and have always operated in good faith with our customers and the State. We look forward to maintaining our role as an important contributor to Arizonaâs job and housing market, as we have for the past 50 years.â
The Consent Judgment stipulates that Pulte will:
►Ensure that Pulte Homeâs Arizona sales representatives do not represent or imply that they are able to âpre-qualifyâ Arizona consumers for home loans.
►Disclose orally and in writing that communications between a prospective buyer and Pulte sales staff regarding how expensive a home the consumer can afford to buy do not constitute an offer of financing.
►In one document, clearly disclose: (1) Pulte offers buyers incentives, such as free upgrades or money toward closing costs, in exchange for the buyersâ use of Pulte Mortgage or other affiliated businesses, and consumers who do decide to use a lender other than Pulte Mortgage will not receive such incentives or discounts. (2) There are other providers of such services, and fees, charges, loan terms and interest rates may vary among providers.
►Ensure that the representations made in its English-language and Spanish-language marketing materials are equivalent.
►Refund $81,400 to 10 Arizona consumers who the Attorney General alleged wrongly forfeited their earnest money deposits after canceling their purchase agreements.
►Pay $200,000 into an escrow account which will fund any new, legitimate claims for earnest money deposit refunds that are filed with the Arizona Attorney Generalâs Office within 12 months of the settlement.
►Pay $500,000 to the Consumer Fraud Revolving Fund to fund the Attorney Generalâs consumer protection, education and outreach programs.
►Pay $100,000 to fund the publication and dissemination of Spanish-language educational materials.
►Pay $300,000 as reimbursement of the Attorney Generalâs costs and investigative expenses.
For more information, visit http://www.azag.gov.
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