Magazine article Mortgage Banking

CFPB Cracks Down Again on Deceptive Advertising

Magazine article Mortgage Banking

CFPB Cracks Down Again on Deceptive Advertising

Article excerpt

On April 9, the Consumer Financial Protection Bureau (CFPB) announced it has ordered RMK Financial Corporation to end "its illegal and deceptive practices and pay a civil penalty of $250,000."

The practices were described by CFPB as "deceptive mortgage advertising practices, including ads that led consumers to believe that the company was affiliated with the U.S. government."

RMK Financial is a California-based mortgage lender that does business under the name Majestic Home Loans, according to the CFPB. In a press release announcing the enforcement action, the bureau said the lender mailed print advertisements to more than 100,000 consumers in several states using the logos and names of the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA).

CFPB said the way the ad was constructed falsely implied that the advertisements were sent by FHA and VA or that the company or its advertised products were endorsed or sponsored by those agencies.

The bureau's press release noted that the advertisements were sent to "tens of thousands of U.S. military service members and veterans and other holders of VA loans."

The ad typically sent by the lender for VA mortgages included the seal and logo for the VA at the top of the page and instructed consumers to call the "VA Interest Rate Reduction Department" at a phone number belonging to RMK. …

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