Freedom Mortgage Corp. Settles for $502,000 Over Allegations of Consumer Protection Violations

The mortgage giant faces penalties for harassing sales calls, bait-and-switch sales tactics, and more, marking a victory for consumer rights.

NEWARK – Nationwide mortgage provider Freedom Mortgage Corp., formerly headquartered in Mount Laurel, NJ, has agreed to a $502,000 settlement in response to allegations of consumer protection law violations, announced Attorney General Matthew J. Platkin and the Division of Consumer Affairs. This agreement signifies the resolution of an extensive investigation into the mortgage provider's operations in the state and beyond.

The firm, which relocated to Florida in 2022, was reportedly involved in a variety of unethical practices. These include bombarding consumers with persistent sales calls about loan refinancing, using bait-and-switch sales tactics, and repeatedly failing to fulfill its obligations as a loan servicer. These allegations have been substantiated by over 1,400 complaints nationwide, filed between January 2015 and June 2022 via the Better Business Bureau and directly to the Division.

"Harassing phone calls from telemarketers aren’t just annoying, they’re illegal," said Attorney General Platkin. "This settlement puts a stop to the unlawful and abusive conduct Freedom Mortgage subjected consumers to and puts mechanisms in place for greater accountability and oversight to prevent it from happening again."

The agreement, detailed in a Consent Order filed today, stipulates that Freedom Mortgage must pay $365,200 in civil penalties and reimburse the Division’s legal and investigative expenses to the tune of $136,800. An additional $50,000 in civil penalties will be immediately levied should Freedom Mortgage fail to comply with the settlement terms within the next year.

Enhanced consumer protections are a significant feature of the settlement. Any consumer complaints received by the Division over the next year will be directed to Freedom Mortgage for resolution. If the company fails to address these, they will be passed on to the Division’s Alternative Dispute Resolution Unit for binding arbitration.

Moreover, Freedom Mortgage is required to assign an employee as the company's Complaint Coordinator within the next 30 days. This position will ensure compliance with the Consent Order's terms and all pertinent consumer protection laws and regulations over a period of 18 months. The Complaint Coordinator will also provide the Division with written quarterly reports summarizing any additional complaints received or resolved by Freedom Mortgage.

The Division found Freedom Mortgage guilty of several infringements, such as unregistered telemarketing, deceptive practices, failure to timely disburse payments from escrow, and not responding to consumer inquiries with accurate information. These violations constitute breaches of the New Jersey Consumer Fraud Act, the Advertising Regulations, and the Telemarketing Do Not Call Law, among others.

Cari Fais, Acting Director of the Division of Consumer Affairs, emphasized their commitment to protecting consumers from such manipulative behavior. "Our investigation into the complaints against Freedom Mortgage revealed egregious conduct that the company is now being held accountable for."

This legal action was represented by Deputy Attorney General Jeffrey Koziar of the Consumer Fraud Prosecution Section within the Division of Law’s Affirmative Civil Enforcement Practice Group, while Jennifer Micco and Ruth Liu of the Division’s Office of Consumer Protection conducted the investigation.