Blog Enforcement Watch October 27, 2020

CFPB Announces Another Settlement with Mortgage Lender Resolving Allegations of Deceptive VA Loans

On October 26, 2020, the Consumer Financial Protection Bureau (CFPB) announced it had a reached a settlement with a Utah-based mortgage lender and broker, resolving allegations that the lender had engaged in deceptive ​acts and practices in violation of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531, 5536 (CFPA), the Mortgage Acts and Practices-Advertising Rule, 12 C.F.R. § 1014.3 (MAP Rule), and Regulation Z, 12 C.F.R. § 1026.24. Specifically, the CFPB had alleged that the lender sent mailers for mortgage loans guaranteed by the U.S. Department of Veterans Affairs (VA) that contained false, misleading, and inaccurate statements. For example, the mailers allegedly offered credit terms that were not actually available and failed to disclose the amount of each payment​ and time period of payments associated with the full term of the loan.

The consent order requires the lender to pay the CFPB a civil money penalty of $1.8 million and prohibits future violations. This consent order is the ninth such order in a string of actions the CFPB has brought against lenders of VA loans.