I was on the VA website recently when something caught my attention unrelated to what I was reviewing: a warning to veterans about deceptive mortgage loan practices, and a statement telling veterans to work directly with their bank (with no mention of mortgage brokers) to “ensure a VA-backed loan works for you.”
If you are a mortgage broker who has customers that are veterans, and/or if you market VA mortgage loans to veterans, you may need to do some damage control thanks to some bad apples.
The VA encourages vets to look at the Consumer Financial Protection Bureau’s website and provided links. Apparently the CFPB and the Federal Trade Commission are looking for potential violations of the Mortgage Acts and Practices Advertising Rule.
Some of the advertising which generated letters to specific companies by the CFPB was pretty ridiculous. Examples included the following: use of a logo in an ad which was similar to the U.S. Department of Veterans Affairs, the use of the acronym “VA” in a website address, quoting a rate as fixed for 30 years when it was really a rate for an ARM, and suggesting that a rate was part of an economic stimulus plan that would expire soon, even though the Department of Veterans Affairs’ loan guarantee programs do not have an expiration date.
The CFPB also sent letters to some companies who made advertisements to “older Americans” because of specific ad content.
Here are some examples: An ad that uses as its return address name “Government Loan Department” and uses a logo similar to HUD, and a website with FHA in the address and a representation that the company is affiliated with a government agency.
Other ad content targeting the elderly that was a concern to the CFPB related to reverse mortgages. Specifically ads that suggested consumers with a reverse mortgage did not have to make payments, omitting that real estate taxes and insurance payments must be made. Another “bad” ad targeting reverse mortgage consumers was a claim that by getting a reverse mortgage, you would get a discount on existing credit card debt. I guess whoever creates these “bad” ads does not believe in karma or the golden rule. If you come across any of these “bad ads” feel free to send them to the CFPB, the FTC, or both.
Once again all it takes is a few bad actors to make consumers, including veterans and the elderly, think everyone is a crook and out to get them. Perhaps in a new year all advertising should be reviewed to make sure it is not misleading or could be construed as misleading. Another approach might be to tell consumers you are a good guy. Recently a financial planner contacted me to develop business and had a very unique approach. He actually tells people to look him up on FINRA’s website. He also suggests looking up his competition. I thought it was a fresh approach.
Based in Chelsea, Mich., John McDermott is a real estate and elder care attorney who represents both consumers and businesses. He can be emailed at firstname.lastname@example.org.