Progressive Mortgage Corporation; Sanford Cramer; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932-3143]

Progressive Mortgage Corporation; Sanford Cramer; Analysis to Aid

Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair or deceptive acts or practices and unfair methods of

competition, this consent agreement, accepted subject to final

Commission approval, would require, among other things, the Ohio-based

mortgage banker, and its president, to provide full and accurate

disclosure of finance charges, annual percentage rates, and other terms

and conditions of financing, in compliance with the Truth in Lending

Act (TILA). The agreement settles allegations that Progressive Mortgage

provided false and misleading information about payment schedules and

the cost of credit to mortgage applicants, in violation of the TILA.

DATES: Comments must be received on or before February 10, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

John M. Mendenhall, Federal Trade Commission, Cleveland Regional

Office, 668 Euclid Avenue, Suite 520-A, Cleveland, OH 44114. (216) 522-

4210.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the above-captioned consent agreement containing a consent

order to cease and desist, having been filed with and accepted, subject

to final approval, by the Commission, has been placed on the public

record for a period of sixty (60) days. The following Analysis to Aid

Public Comment describes the terms of the consent agreement, and the

allegations in the accompanying complaint. An electronic copy of the

full text of the consent agreement package can be obtained from the

Commission Actions section of the FTC Home Page (for November 25,

1996), on the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.''

A paper copy can be obtained from the FTC Public Reference Room, Room

H-130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C.

20580, either in person or by calling (202) 326-3627. Public comment is

invited. Such comments or views will be considered by the Commission

and will be available for inspection and copying at its principal

office in accordance with Section 4.9(b)96)(ii) of the Commission's

Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from Progressive Mortgage Corporation, a

mortgage banker and its president Sanford Cramer.

The proposed consent order has been placed on the public record for

sixty (60) days for the reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and will decide whether it should withdraw from the agreement

or make final the agreement's proposed order.

The Commission's complaint charges that proposed respondents failed

to include premiums for mortgage insurance in calculating the finance

charge and the annual percentage rate for mortgage loans. Respondents

failed to accurately disclose to consumers the payment schedule and

total of payments scheduled to repay the obligation in its Truth in

Lending Act disclosures.

The Complaint also alleges that Sanford Cramer President provided

false and misleading written disclosures relating to the Truth in

Lending Act about consumer credit transactions.

The proposed Consent order contains provisions designed to remedy

the violations charged and to prevent the proposed respondents from

engaging in similar acts and practices in the future. Part I of the

order prohibits Progressive from engaging in the alleged practices in

the future. Part I also requires Progressive to calculate and make all

disclosures required by the Truth in Lending Act and cease from

misrepresenting any term or condition of financing for any consumer

credit transaction.

Paragraph II of the Order addresses the specific practices at issue

by prohibiting Cramer from misrepresenting the annual percentage rate,

the finance charge, the monthly payment amount or the total of payments

in any written disclosure. He is also prohibited from misrepresenting

any term or condition of financing for any consumer credit transaction.

The remainder of the proposed order consists of a six year

recordkeeping provision and other standard compliance provisions.

The purpose of this analysis is to facilitate public comment on the

proposed order, and is not intended to constitute an official

interpretation of the agreement and proposed order, or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 96-31266 Filed 12-9-96; 8:45 am]

BILLING CODE 6750-01-M