CFPB sanctions Inland Empire home lender over allegedly deceptive ads
RMK Financial Corp. agreed to pay $250,000 to settle Consumer Financial Protection Bureau accusations of deceptive advertising. Above, the bureau’s director, Richard Cordray, testifies before Congress.
A Rancho Cucamonga mortgage lender has agreed to pay $250,000 to settle accusations by federal regulators that its advertising deceived consumers into believing that the company was affiliated with the U.S. government.
The Consumer Financial Protection Bureau on Thursday announced the settlement with RMK Financial Corp., which does business as Majestic Home Loan.
The consumer bureau said RMK mailed ads to more than 100,000 consumers in several states, including thousands of military service members.
The mailers used the names and logos of the Department of Veterans Affairs and the Federal Housing Administration in a way that falsely implied that the advertisements were sent or endorsed by the VA or FHA, bureau Director Richard Cordray said.
The bureau said the ads also led consumers to wrongly believe that certain mortgages had fixed rates when the loans in fact had variable rates.
“Deceptive advertising has no place in the mortgage marketplace, and the consumer bureau will continue to take action against companies that mislead consumers with false claims of government affiliation,” Cordray said.
RMK neither admitted nor denied the accusations in accepting a consent decree that ordered it to end its “illegal and deceptive” practices and to pay the civil penalty.
Efforts to reach RMK’s chief executive, Sonny Jeung, were unsuccessful.
The consumer bureau accused three other mortgage lenders in February of falsely implying that they were affiliated with the government, including American Preferred Lending in San Diego, which paid a civil penalty of $85,000 to settle the case without admitting wrongdoing.
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