Two mortgage brokers settled CFPB charges for misleading and deceptive advertising and inadequate disclosures. The CFPB found that the brokers made false statements to servicemembers and veterans concerning credit terms and the brokers' affiliation with the government.
In separate Consent Orders (see here and here), the CFPB stated that the brokers referenced specific interest rates and charges that they were not prepared to offer. The CFPB alleged that the brokers' advertisements (i) implied, falsely, that they were affiliated with the U.S. Department of Veterans Affairs and (ii) falsely stated that the "Economic Stimulus Program will end soon [notwithstanding the fact that] there is currently no plan to extend the Stimulus Program." Further, the CFPB found that both brokers advertised false estimates of the amount of escrow refunds.
As a result of its findings, the CFPB determined that the brokers violated CFPB Rules 1026.24 ("Advertising") and 1014.3 ("Prohibited Representations"), and Sections 1031 ("Prohibiting Unfair, Deceptive, or Abusive Acts or Practices") and 1036 ("Prohibited Acts") of the Consumer Financial Protection Act of 2010.
To settle the charges, the brokers agreed to (i) refrain from further violations, (ii) conduct reviews of their advertising and (iii) submit compliance plans for their mortgage advertising to the CFPB for review. Additionally, the first broker agreed to pay a $50,000 civil money penalty and the second agreed to pay a $230,000 civil money penalty.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.