A consent order filed Monday by the consumer financial protection agency requires Low VA Rates LLC, a mortgage lender and broker licensed in 48 states and the District of Columbia, to pay a $1.8 million civil money penalty over alleged violations of federal consumer financial protections in its presentations to military servicemembers and veterans.
The firm is also required to undertake measures to prevent future violations, the bureau said.
The Consumer Financial Protection Bureau (CFPB), calling this action the ninth and last in a sweep spurred by concerns lodged by the Veterans Administration (VA) over potentially unlawful advertising in the mortgage lending market, said Low VA Rates sent consumer mailers for VA-guaranteed mortgage loans that contained false, misleading, and inaccurate statements. It said this conduct violated the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z (Truth in Lending Act).
Specifically, the CFPB said:
- Low VA Rates’ advertisements misrepresented the credit terms of the advertised mortgage loan 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.
- Low VA Rates misrepresented the existence, nature, or amount of cash or credit available to consumers, and used misleading rhetorical questions, in connection with advertised mortgages.
- Low VA Rates advertisements failed to properly disclose, when required by Regulation Z, credit terms for the advertised mortgage, such as the amount of each payment and time period of payments associated with consumers’ repayment obligations over the full term of the loan.
- The advertisements misleadingly indicated that Low VA Rates’ mortgage products could help consumers eliminate debt.
- Low VA Rates made misleading comparisons involving actual or hypothetical loan terms in advertisements.
The bureau said it has obtained more than $4.4 million in civil money penalties as a result of this sweep.