CFPB Takes Motion Towards Reverse Mortgage Lender for Misleading Promoting
The Consumer Financial Protection Bureau took action against Nationwide Equities Corporation for sending fraudulent loan notices to hundreds of thousands of senior borrowers. The advertisement deliberately misled borrowers about the returns on a reverse mortgage, the fees and costs associated with the products, and the consequences of failing to pay under the CFPB Consent Order. Now, CFPB is calling on Nationwide Equities to pay a $ 140,000 civil fine and implement a compliance plan to review each of their ads and make sure they aren’t breaking federal law.
Nationwide Equities’ advertisements and letters contained hidden charges, hidden risks, false relationships, and false pre-approvals. The CFPB found that Nationwide Equities had multiple violations of MAP rules by misrepresenting fees, costs, payments, taxes, and insurance. Other misrepresentations include: possibility of default and right of residence, affiliation of the product or vendor, available cash or credit, and likelihood of receiving a specific term or refinancing.
CFPB Executive Director Dave Uejio said, “Reverse mortgages are complex financial obligations that need to be carefully considered.
According to the CFPB, Nationwide Equities’ ads violate the Mortgage Acts and Practices Advertising Rule (MAP Rule), the Truth in Lending Act (TILA), and the Consumer Financial Protection Act of 2010 (CFPA). Headquartered in Mahwah, New Jersey, the company is one of the largest reverse mortgage lenders in the United States, licensed in 17 states and the District of Columbia, and operates three retail branches across the country.