The Consumer Financial Protection Bureau (CFPB), in partnership with the Federal Trade Commission (FTC), has issued warning letters to approximately a dozen mortgage lenders and mortgage brokers advising them to ‘clean up potentially misleading advertisements, particularly those targeted toward veterans and older Americans.’
The CFPB has also begun formal investigations of six companies that it thinks may have committed more serious violations of the law, while the FTC issued its own warning letters to about a dozen companies and is continuing investigations of additional firms.
These actions follow a joint review conducted by the CFPB and the FTC of about 800 randomly selected mortgage-related advertisements in newspapers, on the Internet and from mail solicitations. The agencies were specifically looking for potential violations of the 2011 Mortgage Acts and Practices Advertising Rule, which prohibits misleading claims concerning government affiliation, interest rates, fees, costs, payments associated with the loan, and the amount of cash or credit available to the consumer.
‘Misrepresentations in mortgage products can deprive consumers of important information while making one of the biggest financial decisions of their lives,’ says CFPB Director Richard Cordray. ‘Baiting consumers with false ads to buy into mortgage products would be illegal. We will conduct a fair and rigorous investigation into these issues and will take appropriate action for any violations we find.’