State Accuses Mortgage Loan Outfit of Fraud
The California Department of Real Estate is seeking to suspend or shut down Allstate Home Loans Inc., a mortgage loan brokerage in Sherman Oaks, after alleging that Allstate has defrauded private investors of at least $306,000.
In a complaint filed last month, the agency accused Allstate Home Loans and its owner, Jerry Wexler, of improper record-keeping, misrepresentation and fraudulently converting money that should have been returned to investors.
“It’s one of the more serious accusations we’ve filed,” said William Moran, the department’s managing deputy commissioner. “As far as the amount of money missing, it’s very serious.”
State officials are seeking to revoke or suspend the licenses of Wexler. Moran said the department is investigating more allegations from other investors who claim that they have been cheated out of tens of thousands of dollars.
In an interview, Wexler said he will challenge the allegations at an upcoming hearing before an administrative law judge. He acknowledged that “there are certain things that have gone wrong” with his 10-employee company, which he said services about $15 million in loans.
He blamed the company’s troubles on the sluggish real estate market. “It’s the economy,” he said.
Allstate, which is not related to Allstate Insurance Co. owned by Sears, matches private investors seeking a high rate of return on their investments with borrowers who generally have difficulty getting home loans from banks or who need cash quickly.
