CFPB and FTC Warn Against Misleading Consumers with False Mortgage Advertisements

more+
less-
Explore:  CFPB FTC

[author: ]

The CFPB, in partnership with the FTC, is issuing warning letters to approximately a dozen mortgage lenders and mortgage brokers advising them to clean up potentially misleading advertisements, particularly those targeted toward veterans and older Americans. The CFPB also announced it has begun formal investigations of six companies that it thinks may have committed more serious violations of the law.

The actions stem from a joint “sweep,” a review conducted by the CFPB and the FTC of about 800 randomly selected mortgage-related ads across the country, including ads for mortgage loans, refinancing, and reverse mortgages. The agencies looked at public-facing ads in newspapers, on the Internet, and from mail solicitations; some came to the attention of the CFPB and the FTC from consumers who complained about them.

The CFPB and the FTC were looking for potential violations of the 2011 Mortgage Acts and Practices Advertising Rule, which prohibits misleading claims concerning government affiliation, interest rates, fees, costs, payments associated with the loan, and the amount of cash or credit available to the consumer. The CFPB and the FTC share enforcement authority for the rule. Companies that the CFPB finds have violated prohibitions on misleading advertising could be subject to enforcement actions.

The CFPB’s review generally focused on mortgage advertisements, particularly ads that targeted older Americans or veterans. The FTC, meanwhile, examined ads by home builders, realtors, and lead generators. The FTC is issuing their own warning letters to about a dozen companies and continuing with their own investigations of even more companies based on their findings.

Check dodd-frank.com frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.

Topics:  CFPB, FTC

Published In: General Business Updates, Communications & Media Updates, Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

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.

© Stinson Leonard Street - Dodd-Frank and the Jobs Act | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »