CFPB Takes Action Against Reverse Mortgage Lender for Deceptive Advertising
The Consumer Financial Protection Bureau took action against Nationwide Equities Corporation for sending deceptive loan advertisements to hundreds of thousands of senior borrowers. The advertisements purposefully misled borrowers about the return they could get from a reverse mortgage, the fees and costs associated with the products, and the consequences of nonpayment, according to the CFPB consent order. Now, CFPB is ordering Nationwide Equities to pay a $140,000 civil penalty and implement a compliance plan to review every one of their advertisements and ensure they do not violate federal law.
The advertisements and letters by Nationwide Equities included hidden costs, hidden risks, false existing relationships, and false pre-approvals. The CFPB found that Nationwide Equities had multiple MAP Rule violations by misrepresenting fees, costs, payments, taxes and insurance. Other misrepresentations include: Potential for default and right to reside in the dwelling, association of the product or provider, available cash or credit, and likelihood to obtain a particular term or refinancing.
CFPB acting director, Dave Uejio, said, "Reverse mortgages are complicated financial obligations that require careful consideration. Today’s action underscores the Bureau’s commitment to helping protect older homeowners from unscrupulous companies."
Nationwide Equities’s advertisements violated the Mortgage Acts and Practices Advertising Rule (MAP Rule), the Truth in Lending Act (TILA), and the Consumer Financial Protection Act of 2010 (CFPA), according to the CFPB. The company, headquartered in Mahwah, New Jersey, is one of the largest reverse mortgage lenders in the United States, licensed in 17 states and the District of Columbia, and operates three retail branches across the country.
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