The Consumer Financial Protection Bureau and Federal Trade Commission warned several mortgage lenders and brokers on Monday about potentially misleading advertisements, especially those aimed at veterans and seniors.
“Misrepresentations in mortgage products can deprive consumers of important information while making one of the biggest financial decisions of their lives,” Richard Cordray, the director of the CFPB, said. “Baiting consumers with false ads to buy mortgage products would be illegal. We will conduct a fair and rigorous investigation into these issues and will take appropriate action for any violations we find.
The warnings stem from a joint review by the CFPB and FTC of approximately 800 mortgage-related ads across the country, some of which drew the agencies’ attention after consumers complained about them.
The agencies were specifically looking for possible violations of the 2011 Mortgage Acts and Practices Advertising Rule, which prohibits lenders from making misleading claims about government affiliation, fees, interest rates, costs, line of credit and payments.
The agencies’ sweep identified numerous problems, including potential misrepresentations about government affiliation, inaccurate interest rate information, misleading statements about the costs of reverse mortgages and misrepresentation about the line of credit available to the consumer.
In a joint letter to lenders identified in the sweep, the agencies warned the recipients that their mortgage ads could be in violation of federal law and advised them to review their advertising materials.