As more veterans begin to purchase new homes, an alarming trend by mortgage lenders and brokers continue, as they take unfair advantage of veterans with misleading advertisements.
The Consumer Financial Protection Bureau in partnership with the Federal Trade Commission is issuing warning letters to approximately a dozen lenders and brokers advising them to clean up these misleading advertisements. The CFPB has begun formal investigations of six companies that have committed more serious violations of the law. The CFPB and FTC share enforcement authority and are particularly focused on ads targeting older Americans and veterans.
Actions stem from a joint “sweep,” a review conducted by the CFPB and the FTC of about 800 randomly selected mortgage related ads across the country, including ads for mortgage loans, refinancing and reverse mortgages. The agencies looked at public facing ads in newspapers, on the Internet and from mail solicitations. The CFPB is looking for potential violations of the 2011 Mortgage and Practices Advertising Rule, which prohibits claims that mislead in regards to interest rates, fees, costs, loan payments and the amount of cash or credit available to the veteran.
The FTC, meanwhile, is examining ads by home builders, realtors and lead generators. The FTC is issuing its own warning letters to about a dozen companies and continuing with its own investigations of even more companies. A copy of the FTC’s press release is available at www.ftc.gov/opa/index.shtml.
The “sweep” identified problems such as misrepresentation about government affiliations, by using official looking seals, logos, or having characteristics that may be interpreted as indicating a government affiliation. Some ads promote low rates that mislead veterans about the terms of the loan. Also, reverse mortgage claims, that a veteran will have no payments, even though with a reverse mortgage loan, they must make monthly or other periodic tax or insurance payments or risk default if the payment isn’t made.
These warning letters being sent, are advising veterans that the identified lenders may be violating federal laws and that they should carefully review all the information. Warning letters from the CFPB to veterans and servicemembers can be found at http://files.consumerfinance.gov/f/201211_cfpb_generic_warning_letter_veterans.pdf. Taking a little time and carefully investigating your options will help avoid this dilemma.
Hope everyone enjoyed a bountiful Thanksgiving with loved ones.
AMVETS welcomes new members, Zack McClary, Mike Brown, Doc Roberts, Melody Gersbach, Delores diPritore, Kent Olson, Earl Bryan, James Sain, Dennis Robertson, John Cox, John Bob Waldrup, Matt James, Ronnie Walker, Mary Devitt, Stephen Bessent, Robin Dempsey, Sandra Banks and Wesley Banks, all joining Veterans Day weekend.
Reach Jim Vines at firstname.lastname@example.org.