The Consumer Financial Protection Bureau has tagged yet another VA lender for misleading borrowers.
Low VA Rates, a Utah-based mortgage lender and broker licensed in 48 states and the District of Columbia, will pay $1.8 million for “false, misleading, and inaccurate” advertisements, the CFPB said. Low VA Rates is the ninth mortgage company tagged by the CFPB in recent months for deceptively marketing VA loans.
According to the CFPB, Low VA Rates advertised their VA loans primarily through direct mail, targeted at US military service members and veterans. The company’s advertisements allegedly misrepresented the credit terms of advertised mortgages “by stating credit terms that the company was not actually prepared to offer to consumers, including misrepresenting the annual percentage rate applicable to the advertised mortgage,” the CFPB said. The company also misrepresented the amount of cash or credit available to consumers and used “misleading rhetorical questions” in connection with the loans it advertised, the CFPB said.
“Low VA Rates’ advertisements also misleadingly indicated that its mortgage products could help consumers eliminate debt,” the bureau said.
In addition to the $1.8 million monetary penalty, Low VA Rates will be required to designate an advertising compliance official who must review its advertisements for compliance prior to use, the CFPB said.
Low VA Rates is the latest in a slew of VA mortgage companies targeted by the CFPB for misleading advertising. The cases stemmed from a sweep of investigations of multiple VA mortgage companies, the CFPB said. The agency has obtained more than $4.4 million in civil money penalties as a result of the sweep.