The Federal Trade Commission and the Consumer Financial Protection Bureau announced Monday they have concluded a coordinated “sweep” of mortgage product advertising which resulted in issuing 32 warning letters and commencing 19 enforcement investigations into alleged violations of the Mortgage Acts and Practices Advertising Rule (MAPA).
According to Thomas Pahl, the FTC’s Assistant Director, Division of Financial Practices, a driving force behind the sweep was consumer complaints received by the FTC. In addition, the agencies partnered with the Bureau of Veterans Affairs and state attorneys general Kamala Harris of California and Lisa Madigan of Illinois, as part of their investigations. The FTC and CFPB reported their joint investigation reviewed more than 800 print and internet mortgage product advertisements, as well as advertising in emails and direct mailings.
Both agencies expressed concern over advertisements that implied the advertiser was affiliated with a governmental agency or the mortgage product was approved by a governmental authority.
According to Kent Markus, the CFPB’s Assistant Director of Enforcement, “Misrepresentations in advertising for mortgage products pose a significant risk of harm to consumers because they can confuse and mislead consumers when they are making one of the biggest financial transactions of their lives.”
As part of the effort, the FTC has sent letters to 20 companies comprised of real estate agents, home builders, and “lead generators,” requesting they review their advertisements for compliance with the MAPA. The CFPB also issued warning letters to a dozen mortgage brokers and lenders.
“The main reason for the sweep we conducted is to spur compliance with the law,” added Marcus. Both agencies stressed that they will conduct their own enforcement investigations and will not “double team businesses,” stated Pahl. However, they will share information obtained from their investigations.
Don Maurice is President of Maurice & Needleman, P.C., whose attorneys specialize in all areas of creditors’ rights and financial services litigation.