FOR IMMEDIATE RELEASE: August 2, 1996

Today, Commissioner Patrick M. McQueen of the Michigan Financial Institutions Bureau, suspended the mortgage broker and lender license of First Fidelity Mortgage Company of Michigan (now known as OmniAmerica Mortgage Corp.), of 30777 Northwestern Highway, Southfield, Michigan. McQueen issued an Order for Summary Suspension of License together with a Cease and Desist Order and a Notice for Opportunity to Request Hearing.

A joint investigation by Financial Institution Bureau staff and representatives of Attorney General Frank J. Kelley's office uncovered evidence that First Fidelity has systematically engaged in misrepresentation on loan transactions with Michigan consumers, businesses, and churches.

Specifically, Deputy Commissioner Murray Brown filed sworn charges that First Fidelity took significant sums of "up front" money with the promise to obtain loans for individuals, churches, and businesses with neither the ability nor the intention of processing the loans.

Brown further charged that the company is insolvent and that First Fidelity is engaging in a pattern of misrepresentation and material omissions of information with its clients and with the Bureau, including misrepresenting the existence of loan commitments to its commercial loan clients. Brown also alleges that First Fidelity's loan activities appear to be a sham: significant up front fees were taken from borrowers, but few, if any, commercial loans actually closed.

Interestingly, the authority for today's action was provided by 1987 legislation passed in response to the Diamond Mortgage Company scam perpetrated by its owner Barton Greenberg. Greenberg was convicted of defrauding Michigan citizens of over 44 million dollars in 1987. The Bureau learned that Greenberg, after serving several years in prison for his role in the Diamond Mortgage fraud, was actively involved in the management of First Fidelity. In sworn depositions, former employees of First Fidelity referred to Greenberg as "the boss." Ironically, the law enacted to protect consumers from mortgage company fraud is the one the Commissioner was able to use to issue today's immediate suspension of license.

In explaining today's enforcement action, Commissioner McQueen advises that the sworn statement of charges filed by his staff concluded that First Fidelity's actions "constitute an imminent risk to Michigan consumers and businesses," which required his "swift and decisive action against First Fidelity." The company will have an opportunity to request a hearing on the cease and desist order and the summary suspension of its license.