First America Mortgage has been accused of using misleading radio ads and
generally poor business practices, but it’s looking to clear its name in court. Florida regulators investigating the company, which does business as The Financial Group, said that 105 of 115 randomly selected customers of the company paid higher closing costs than the company had forecasted in its GFEs. The average overpay was $4,560 per borrower, while the largest was $16,789, alleged a state complaint filed in April, according to the St.Petersburg Times.

Additionally, radio ads broadcast in several Florida cities claimed mortgage rates as low as 1.25 percent, yet regulators say the company didn’t always clarify the rate was adjustable or that the rate might last only a month before it rose.

Many borrowers were required to use a specific title service and appraiser, yet both businesses were run by relatives of the company’s president and owner.

Lesson Learned: If you advertise on the radio or in other media, make sure you disclose the full terms of each loan you’re offering, or be prepared for a visit from regulators.