In a joint action, the CFPB and Federal Trade Commission (FTC) announced November 19, 2012 new warnings to mortgage lenders about allegedly deceptive mortgage advertisements. Under Dodd Frank, the agencies have concurrent enforcement authority under so-called Regulation N, the Mortgage Acts and Practices Advertising Rule. This rule prohibits misleading claims concerning government affiliation, interest rates, fees, costs, payments associated with the loan, and the amount of cash or credit available to the consumer.
The agency investigations already have yielded written warnings, and more action is to come. "Baiting consumers," "with false ads to buy into mortgage products would be illegal,” says CFPB Director Richard Cordray, "We will conduct a fair and rigorous investigation into these issues and will take appropriate action for any violations we find.” Both agencies are investigating a number of lenders that, they assert, have committed "more serious violations of the law." The agencies say they have conducted a "sweep" of 800 ads, many implying, falsely, the existence of private programs backed by the government or carrying false or misleading promises about interest rates and costs. The agencies collectively warned about 32 lenders, twelve by the CFPB alone. Moreover, the agencies claim to be investigating another nineteen more concerning this issue, six by the CFPB. As a short piece on the CFPB's own blog emphasizes the Bureau's focus is on the targeting of veterans and the elderly.