CFPB Enters Into $1 Million Consent Order with Nonbank Mortgage Lender

On February 27, 2023, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order​​ with a mortgage lender, resolving allegations that the lender engaged in “a series of repeat offenses,” including violating a 2015 order prohibiting the lender from engaging in allegedly deceptive advertising.  According to the CFPB, the lender sent advertisements to military families falsely claiming it was affiliated with the U.S. Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) in violation of the CFPA, Regulation N, TILA, and Regulation Z.  Further, the CFPB alleges that the lender misled borrowers concerning key terms of the loans, such as interest rates and monthly payment amounts, and misrepresented loan requirements and potential refinancing options.

CFPB Director Rohit Chopra emphasized that this actions reflects CFPB’s “commitment to weed out repeat offenders” as “[e]ven after the 2015 law enforcement order, [the company] continued to lie to military families by falsely implying government endorsement of its home loans.”

Pursuant to the consent order, the company is permanently banned from engaging in mortgage lending activities. Additionally, the lender agreed to pay a $1 million penalty to be deposited into the CFPB’s victim relief fund.