VA Mortgages

CFPB Continues Streak of Consent Orders With VA Mortgage Lenders for Misleading Practices | Goodwin

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On September 2, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consenting resolution with a Delaware-based VA mortgage lender to resolve allegations that the company had committed fraudulent practices against service members and veterans. The CFPB found that since April 2018, the company had sent current and former service members misleading advertisements requiring missing information, contrary to Section 1026.24 of Regulation Z, 12 CFR Section 1026.24, the Implementing Regulation of the Truth in Lending Act (TILA) violates. 15 USC §§ 1601–1667f; Section 1014.3 of Mortgage Laws and Practices – Advertising Rule (MAP Rule or Regulation N), 12 CFR Section 1014.3; and sections 1031 and 1036 of the Consumer Financial Protection Act of 2010 (CFPA), 12 USC sections 5531, 5536.

The consent form stated that the company’s direct mail included certain loan terms and interest rates on loans when those terms were in fact not available to consumers. The company also falsely implied it was affiliated with the government, including the U.S. Department of Veterans Affairs.

Pursuant to the terms of the consent decision, the company agreed to pay a civil fine of $ 225,000 and to cease similar behavior in the future. This is the latest of several recent approval orders between the CFPB and mortgage lenders and brokers involving direct mail mailers for VA guaranteed mortgages.

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