Don’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