CFPB and FTC announce joint action against mortgage advertisers


[author: ]

The CFPB and FTC announced that they have sent warning letters to mortgage advertisers urging them to review their marketing materials to ensure that they comply with the Mortgage Acts and Practices-Advertising Rule (Regulation N) and other applicable law. The warning letters were the subject of the press call the CFPB and FTC had promoted in the media advisory they issued last week. (The CFPB would not permit us to participate in the call despite our publication of this blog.  We were informed that as members of a law firm that represents financial institutions, we do not qualify as “credentialed” members of media.)

The CFPB indicated that it sent warning letters to about a dozen mortgage lenders and brokers and has begun formal investigations of six companies whose violations may be more serious. The FTC indicated that it sent warning letters to 20 companies and has also opened investigations.

The agencies’ actions resulted from a joint review of about 800 ads across the country for mortgage loans, refinancings and reverse mortgages that appeared in a variety of media including websites, Facebook, direct mail and newspapers.  Some of the ads were brought to the agencies’ attention by complaining consumers. According to the CFPB, its review focused on ads by mortgage lenders and brokers targeting older Americans or veterans while the FTC’s review focused on ads by home builders, real estate professionals and lead generators.

Examples of the types of problems the CFPB and FTC identified in the ads included potential (1) misrepresentations about government affiliation, (2) inaccurate or misleading promotions of low interest rates, (3) misleading statements about the costs of reverse mortgages, and (4) misleading advertisements suggesting pre-approval to receive a certain amount of money in connection with a refinancing or reverse mortgage.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:


Ballard Spahr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.