CFPB Consent Order Fines Mortgage Company $2.25 Million for Refinance Misrepresentations

The CFPB recently issued a consent order against an alleged “repeat offender” non-bank mortgage company that specializes in VA-guaranteed loans for allegedly misrepresenting the payment terms of cash-out refinances in three states.  The CFPB alleged that the company’s misrepresentations of the new versus previous monthly payments on “net benefit” analysis worksheets in those states were deceptive acts and practices in violation of the Consumer Financial Protection Act.  The CFPB categorized the company as a “repeat offender” because the CFPB formerly took enforcement action against it for alleged deceptive mortgage advertising and kickbacks. 

In addition to the $2.25 million civil money penalty, the consent order requires the company to, among other things: (i) create and implement a comprehensive compliance plan; (ii) have executive officer review of all plans and reports required by the consent order and submissions to the CFPB; (iii) notify the CFPB of certain company changes; and (iv) create and retain certain business records.  The company neither admitted nor denied the allegations.

In the related press release, the CFPB identified its (and VA’s and Ginnie Mae’s) concerns here over “churning” – the practice of lenders repeatedly pushing VA home loan refinances.