The CFPB recently entered into a consent order with a reverse mortgage lender over alleged advertising violations under the MAP Rule, Regulation Z, and the CFPA. The consent order imposes a civil money penalty of $140,000 along with other requirements.
The lender allegedly sent consumers solicitation letters and flyers that misrepresented the amount of fees, costs, and conditions associated with the reverse mortgage loans it was offering. Allegedly, the advertisements claimed that borrowers’ monthly mortgage payments would be eliminated if the borrower took out a reverse mortgage loan but failed to state that the borrower would still be responsible for taxes and insurance. Communications sent to consumers also allegedly gave the impression that the lender was associated with the consumer’s current lender. Other communications allegedly misrepresented the amount of cash or credit the consumer would receive upon taking out a reverse mortgage loan and the likelihood of obtaining a particular loan product or term.
Among other things, the consent order prohibits further advertising violations and requires that an advertising compliance official review each mortgage advertising template to ensure compliance with federal law prior to dissemination to consumers. The lender is also subject to other compliance and reporting requirements under the terms of the consent order.