CFPB Continues Crackdown On Bad VA Loans

CFPB Continues Crackdown On Bad VA Loans

September 3, 2020
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For the seventh time in about six weeks, the Consumer Financial Protection Bureau has come to a settlement agreement with a mortgage broker over mortgage loans guaranteed by the U.S. Department of Veterans Affairs. The latest action comes against Accelerate Mortgage, a Delaware-domiciled mortgage broker and lender in 31 states.
 
The Consumer Financial Protection Bureau issued a consent order against Accelerate Mortgage, which is licensed as a mortgage broker and lender in about 31 states.  Accelerate offers and provides mortgage loans guaranteed by the Department of Veterans Affairs (VA).  Accelerate’s principal means of advertising VA-guaranteed loans is through direct-mail advertisements sent primarily to United States military servicemembers and veterans. 
 
The CFPB found that Accelerate sent consumers mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures, in violation of the Consumer Financial Protection Act’s prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z. The consent order requires Accelerate to pay a civil penalty of $225,000 and imposes requirements to prevent future violations.
 
The CFPB found that Accelerate disseminated advertisements that contained false, misleading, and inaccurate statements or that failed to include required disclosures.  For example, Accelerate advertisements misrepresented the credit terms of the advertised mortgage loan by stating credit terms that the company was not actually prepared to offer to the consumer, including misrepresenting the interest rate or payment amount applicable to the advertised mortgage and the nature or amount of cash available to the consumer in connection with the advertised mortgage. 
 
Accelerate also made misrepresentations about the existence or amount of fees or costs to the consumer in connection with the advertised mortgage.  Accelerate advertisements created the false impression that Accelerate was affiliated with the government by using words, phrases, images, or designs that are associated with the VA, Internal Revenue Service, or Federal Deposit Insurance Corporation. 
 
Accelerate advertisements also falsely represented that the consumer’s access to mortgage-refinance benefits through VA-guaranteed loans was time-limited. The Bureau also found that Accelerate advertisements failed to properly disclose, when required by Regulation Z, credit terms for the advertised mortgage, such as the annual percentage rate of the advertised mortgage or the consumer’s repayment obligations over the full term of the loan.
The consent order against Accelerate can be read here.
Residential, Compliance

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