Mortgage Lender Settles CFPB Charges for Deceptive Advertising

A mortgage lender settled CFPB charges for misleading and deceptive advertising and inadequate disclosures. The CFPB found that the direct lender made false statements to servicemembers and veterans concerning (i) credit terms, (ii) the lender's affiliation with the government, (iii) repayment obligations and (iv) property appreciation.

In a Consent Order, the CFPB stated that the lender referenced specific interest rates and charges that the lender was not prepared to offer. The CFPB alleged that the lender's advertising platform implied, falsely, that it was affiliated with the U.S. Department of Veterans Affairs and, with no basis for the claim, that the target's property would appreciate in value. Further, the CFPB claimed that the mortgage lender failed to disclose the terms of mortgage repayments in order to accurately reflect a consumer's repayment obligations over the life of the loan.

As a result of its findings, the CFPB determined that the lender violated CFPB Rules 1026.24 ("Advertising") and 1014.3 ("Prohibited Representations"), and Sections 1031 ("Prohibiting Unfair, Deceptive, or Abusive Acts or Practices") and 1036 ("Prohibited Acts") of the Consumer Financial Protection Act of 2010. To settle the charges, the lender agreed to (i) refrain from further violations, (ii) conduct a review of its advertising, (iii) submit a compliance plan for its mortgage advertising to the CFPB for review and (iv) pay a civil money penalty of $150,000.