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PHOENIX — A national mortgage firm known for its extensive radio advertising campaign has agreed to make changes to its marketing.

Lenox Financial Mortgage has agreed not to claim the company can provide loans with "no closing costs" unless it also discloses that not everyone will qualify. An "assurance of discontinuance" signed by company President John Shibley and filed in Maricopa County Superior Court says any future advertising will include disclaimers and other qualifying information.

Attorney General Terry Goddard acknowledged that a majority of the company's customers were, in fact, offered mortgages that refinanced existing loans without closing costs. But he said that wasn't the case universally.

Specifically, Goddard said the availability of those loans was contingent on factors ranging from credit scores and debt load to income.

Shibley, who appears in his own radio ads, has made various claims.

For example, he says that someone who walks in with a $300,000 loan and is seeking to refinance is going to leave with a $300,000 loan, with no closing costs and no additional fees built into the new mortgage.

"We've refinanced some guys five times and they didn't pay a nickel," one commercial says. Shibley, in his ads, has called the idea of no-fee mortgages "the biggest no-brainer in the history of earth."

Goddard, playing off that theme, called the settlement "the biggest no-brainer in the history of earth." He said the lack of full disclosure violates Arizona's consumer fraud statutes because it's a "material omission" in the advertising.

"Although they have a good record of providing no-cost loans, some people with less than perfect credit in fact pay fees," he said.

"That is something they need to say in their very effective promotional advertisement," Goddard continued. "I think they could do that very easily and we'll be satisfied."

The deal also requires Lenox Financial to pay Goddard's office $95,000 to cover the investigative costs.