Last week, the Consumer Financial Protection Bureau (CFPB) announced that mortgage lender NewDay Financial LLC, which specializes in Veterans Administration-backed loans available to military personnel and veterans, had agreed to pay a $2 million fine to resolve allegations of deceptive marketing tactics and participation in a kickback scheme.
According the CFPB, NewDay advertised through direct mail campaigns that it had been endorsed by an unnamed veterans group without disclosing to its customers that NewDay had paid "lead generation" fees to the group as well as a $15,000 monthly licensing fee in exchange for being named the "exclusive lender" for the group. The CFPB alleged that NewDay sent out more than 50 million mortgage solicitations during the three-year period between July 2011 and July 2014. In addition to the fine, NewDay agreed to stop paying kickbacks and engaging in deceptive marketing practices. A copy of the consent order in the case is available on the CFPB's website.
With entry of this consent order, the CFPB continues its aggressive policing of unfair and deceptive mortgage lending practices.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.