CFPB Accuses 12 Mortgage Firms of Violating Law on Ads
The Consumer Financial Protection Bureau Monday said it will issue warning letters to at least 12 mortgage banking and brokerage firms that it says broke federal law in advertising loan products to consumers.
And on a separate tract, it has launched what it calls “formal investigations” of six companies that committed more serious violations of federal law.
Overall, CFPB—in partnership with the Federal Trade Commission—randomly selected 800 lenders for review and finally settled on 12. The regulator however, declined to release the identities of the companies being targeted.
A sample warning letter posted on the agency’s website begins with the language: “We have reviewed one or more of your mortgage advertisements and it appears that they may violate federal law…”
Lenders and brokerages receiving the letters may have offered consumers promises on reverse loans, giving the impression that the mortgages do not have to be repaid.
Also, some lenders are being warned for issuing marketing materials using a logo similar to that of the Department of Housing and Urban Development, which guarantees all reverse mortgages.
It does not appear that CFPB and FTC will immediately sanction the 12, but for now is asking them to “clean up” their act.