On September 14, 2020, the Consumer Financial Protection Bureau (CFPB) announced a settlement in its eighth case stemming from the CFPB’s “investigation sweep” of mortgage companies that allegedly posted deceptive mortgage ads guaranteed by the VA to service members and veterans. According to the CFPB, “The ongoing round of investigations reflects the Bureau’s commitment to enforcing laws that ensure that the financial marketplace is fair and accurate for all consumers, including military members, veterans and surviving spouses. which mortgage loans secured by the AV are intended to benefit. “

The CFPB’s emphasis on the protection of military personnel and veterans is consistent with general law enforcement trends in the industry over the past several years. As Goodwin previously pointed out in his Consumer Finance 2019 year in review, federal and state agencies have focused their law enforcement efforts primarily on protecting vulnerable populations from discrimination. A quarter of all actions were brought under the Fair Housing Act or the Military Civilian Relief Act (SCRA). Federal agencies have demonstrated their commitment to the military and veterans, notably through the Department of Justice, among others. Military and Veteran Initiative. Over the past year, many other lawsuits were not brought under a law specifically designed to protect minorities or the military, but reflected similar themes – for example, the CFPB sued a lender for submitting data to the Bureau that misrepresents the race, ethnicity and gender of certain loan applicants.

In less than two months, between July 24, 2020 and September 14, 2020, the CFPB announced eight similar regulations:

• First and second, on July 24, 2020, the CFPB issued consent orders against California-based mortgage companies Sovereign Lending Group, Inc. and Prime Choice Funding, Inc. for allegedly mailing advertisements for VA guaranteed mortgages that misrepresent the terms credit; wrongly described an introductory interest rate as “fixed” when the rate was in fact adjustable and could increase over time; created the false impression that they were affiliated with the government; and failed to adequately disclose that they were not acting on behalf of current consumer lenders.
• Third, on Aug 21, 2020, the CFPB issued a consent order against California-based mortgage company Go Direct Lenders, Inc., for allegedly posting advertisements for VA-guaranteed mortgages that advertised a lower interest rate than what the company was ready to offer; mistakenly describes variable rate mortgages as “fixed” rate loans; stated or implied that appraisal, assets and income documents were not required to qualify for certain loans; falsely stated that it had records showing that the value of the consumer’s property had increased over the past year by a certain percentage; and created the false impression that they were affiliated with the government.
• Fourth, the Aug 26, 2020, the CFPB issued a consent order against California mortgage company PHLoans.com for allegedly mailing advertisements for VA guaranteed mortgages that stated credit terms the company was not actually prepared to provide. offer to the consumer; misrepresented the existence and amount of fees or costs to the consumer in connection with the advertised mortgage; and did not disclose the credit terms of the advertised mortgage.
• Fifth and sixth, on September 1, 2020, the CFPB issued consent orders against a Florida-based mortgage company Hypotec, Inc. and Maryland-based mortgage company Service 1st Mortgage, Inc. for allegedly mailing advertisements for VA guaranteed mortgages that advertised specific credit terms that it was unwilling to offer, or that it could only offer for an introductory period; created the false impression that they were affiliated with the government; wrongly stated that he would pay an estimated escrow refund of a specific amount if the consumer refinances through them; and asserted that “the economic stimulus program will end soon. There are currently no plans to extend the stimulation program. “
• Seventh, the September 2, 2020, the CFPB issued a consent order against Delaware-based mortgage company Accelerate Mortgage, LLC, or posted advertisements for VA secured mortgages that misrepresented the credit terms of the advertised loan ; has misrepresented the existence or amount of charges or costs to the consumer in connection with the advertised mortgage; created the false impression that Accelerate was affiliated with the government; and failed to disclose certain required conditions.
• Eighth, on September 14, 2020, the CFPB issued a consent order against California mortgage company ClearPath Lending, Inc., or reportedly posted advertisements for VA secured mortgages that stated credit terms the company was not actually willing to offer. to the consumer, including by distorting the annual percentage rate applicable to the advertised mortgage; rates or payments falsely advertised as fixed, even though the advertised mortgage was a variable rate mortgage or the payment was not fixed for the term indicated; has distorted the existence, nature or amount of liquidity or credit available to the consumer, as well as the existence or amount of fees or costs to the consumer, in relation to the advertised mortgage; gave the false impression that ClearPath was affiliated with the VA; and failed to adequately disclose that they were not acting on behalf of current consumer lenders.

To date, the CFPB has ordered these eight mortgage companies to pay a total of over $ 2.6 million in civil penalties and to comply with various injunction provisions. The CFPB continues to describe this as an “ongoing” effort, suggesting that further enforcement action may be underway against other lenders and mortgage brokers.