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May 4, 2021

CFPB Enters Into Consent Order with Mortgage Lender for $140,000

On April 27, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a reverse mortgage broker and lender, resolving allegations that the company violated the Mortgages Acts and Practices Advertising Rule (MAP Rule), Regulation Z, and the Consumer Financial Protection Act (CFPA) through its direct-mail advertising campaigns targeting homeowners aged 62 and older.

The CFPB alleged the company violated the MAP Rule by misrepresenting in its advertisements (1) that if borrowers took out reverse mortgage loans, they would no longer need to make tax and insurance payments; (2) that borrowers could not be forced out of their homes if they defaulted on the reverse mortgages; (3) that the company was affiliated with the borrower’s current lender or that the company’s product was affiliated with the borrower’s current servicer; (4) that borrowers would receive significant amounts of cash or credits as part of the company’s reverse loan transactions; and (5) that borrowers had high likelihoods of obtaining mortgages with specific terms or were likely to obtain refinance of existing reverse mortgage loans.

The CFPB alleged the company violated Regulation Z by misrepresenting in its direct-mail mortgage advertisements that no payment was required and failing to disclose that taxes and insurance premiums would still be owed or that the actual payment obligations would be greater than what was indicated in the advertisements.  Finally, the CFPB alleged the company violated the CFPA based on its violations of the MAP Rule and Regulation Z.

Under the consent order, the company agreed to pay a civil money penalty of $140,000.  Additionally, the company is prohibited from engaging in violative advertising practices, must undergo an advertising review by an Advertising Compliance Official, and must submit a compliance plan to the CFPB.

The post CFPB Enters Into Consent Order with Mortgage Lender for $140,000 appeared first on Consumer Finance Enforcement Watch.