A reverse mortgage lender settled CFPB charges for sending advertisements to senior citizens that misrepresented the costs and risks associated with the lender's loans.
In a consent order, the CFPB found that the company's advertisements:
- materially misstated the costs associated with the reverse mortgages;
- omitted the fact that borrowers would have to continue making tax and insurance payments or else risk losing their homes;
- falsely represented that consumers receiving the advertisements had a preexisting relationship with the lender; and
- falsely claimed that consumers who received the advertisements were preapproved for a specified loan amount.
As a result of its findings, the CFPB determined that the lender violated Section 1014.3 of the Mortgage Acts and Practices Advertising Rule (or the "MAP Rule"), Section 1026.24 of Regulation Z implementing the Truth in Lending Act (or "TILA"), and Sections 1031 ("Prohibiting Unfair, Deceptive, or Abusive Acts or Practices") and 1036 ("Prohibited Acts") of the Consumer Financial Protection Act.
To settle the findings, the lender agreed to (i) cease and desist from further violations, (ii) pay a $140,000 civil money penalty and (iii) an undertaking to establish and implement a plan to ensure that its advertisements are compliant with all relevant regulations.
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.