State Says Mortgage Broker Cheated Local Borrowers

Signaling their seriousness about policing the mortgage-broker industry, state regulators have accused the president of a Florida-based company of cheating at least 124 Washington state borrowers.

Customers of Abbey Financial Corp., which had offices in Seattle and Bellevue, were led to believe that Abbey had secured housing loans for them, regulators said, only to learn that the company had no sources of money to lend.

The accusations brought against Glen McCarlie, president of Abbey, by the state Department of Financial Institutions represent the first time that an individual has been ordered to pay restitution under the year-old Mortgage Broker Practices Act, said John Bley, director of the department.

"These are significant charges, but this was a very significant and egregious case," Bley said.

McCarlie, whose business lists a Palm Beach, Fla., address, could not be reached for comment.

McCarlie faces no criminal charges in this state relating to his loan business; Bley said the state Attorney General's office was aware of his department's action.

On April 1 in Massachusetts, Abbey Financial filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The day before, the state of Washington had issued a cease-and-desist order against the company.

On May 3, the state demanded that McCarlie pay restitution. When he failed to do so, the state took its latest action.

Regulators said that McCarlie had engaged in practices that he "knew or should have known would ultimately harm Washington consumers," regulators said.

"McCarlie maintained a practice of keeping Abbey thinly capitalized to the point that Abbey would not be able to fulfill its interest-rate lock obligations in a reasonably foreseeable rising interest-rate environment," a statement by the regulators said.

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