Compliance
REGULATORY CORNER FEDERAL COMPLIANCE CFPB SETTLES WITH SEVERAL MORTGAGE BROKERS OVER FALSE LOAN ADS
The CFPB recently issued several consent orders against mortgage brokers that were found to be in violation of the Consumer Financial Protection Act’s prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z. Its sweep of investigations has led to a total of eight cases of multiple mortgage companies that use deceptive mailers to advertise VA-guaranteed mortgages. The CFPB commenced this sweep in response to concerns about potentially unlawful advertising in the market that the VA identified. Here are some: • A consent order was issued against Go Direct Lenders, Inc., a California corporation licensed as a mortgage broker or lender in about 11 states. The CFPB found that Go Direct sent consumers numerous mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures, in violation • Another consent order issued that requires Service 1st to pay a civil money penalty of $230,000 and imposes requirements to prevent future violations. Service 1st Mortgage, Inc. is a mortgage broker based in Glen Burnie, Maryland, licensed in about 12 states. Service 1st also offers and provides VA-guaranteed mortgage loans. Service 1st's principal means of advertising VA loans is via directmail advertisements sent primarily to U.S. military servicemembers and veterans. The CFPB found that in advertising VA-guaranteed mortgages Service 1st sent consumers numerous mailers that contained false, misleading, and inaccurate statements or that lacked required disclosures. • Hypotec, Inc. is a mortgage broker based in Miami, Florida, licensed in eight states. Hypotec offers and provides mortgage loans guaranteed by the U.S. Department of Veterans Affairs. Hypotec advertises its VA-guaranteed loans to U.S. military servicemembers and veterans through using direct mail. The Bureau found that Hypotec sent consumers numerous mailers that contained false, misleading, and inaccurate statements or that lacked required disclosures. The consent order requires Hypotec to pay a civil money penalty of $50,000 and imposes requirements to prevent future violations. • The consent order against Accelerate Mortgage, LLC, a Newark, Delaware-based company licensed as a mortgage broker and lender in about 31 states, requires Accelerate to pay a civil money penalty of $225,000 and imposes requirements to prevent future violations. The CFPB found that Accelerate sent consumers mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures.
The MORTGAGE BANKER Magazine
40
October 2020
