Mortgage Compliance

CFPB Still on The Prowl

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cfpb-prowl-reverse-mortgageDon’t look now but among all the talk of the new Trump administration’s defanging of the CFPB, the CFPB has fined three Reverse Mortgage lenders for deceptive advertising.

According to CFPB all three, American Advisors, Reverse Mortgage Solutions, and Aegean Financial used inaccurate advertising to promote their reverse mortgage product to unsuspecting seniors. That’s no so nice.

According to statements made by Richard Cordray, CFPB’s Director, these companies tricked consumers by advertising they couldn’t lose their home under their reverse programs, would have no monthly payments and could stay in the home for the rest of their lives. These statements are not true.

The Mortgage Acts and Practices Advertising Rule prohibits misleading claims in mortgage advertising. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits institutions from engaging in deceptive acts or practices, including advertising of consumer financial products or services.

Cordray stated that all lenders and brokers must abide by these federal lending laws. That holds true for all products, not just when advertising reverse loans.

These are three very large lenders, experienced in reverse mortgage lending. It’s hard to understand how they could have violated such advertising rules. But they did and now they’ll pay.

  • Have you reviewed your promotional and advertising materials lately?
  • Do you know what is being offered and presented by all your originators?
  • Are you monitoring your company and LO social media content?

All communications with a consumer must comply with the rules and regulations governing fair and accurate advertising and product promotions. Are yours?

For more details on these fines, you can see the CFPB release HERE

 

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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