Agencies target deceptive mortgage claims

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Two government agencies Monday announced a joint effort aimed at cracking down on misleading and deceptive advertisements for home mortgages, including refinancings and reverse mortgages.

The Federal Trade Commission and the Consumer Financial Protection Bureau conducted a "sweep" of mortgage product advertisements, reviewing some 800 ads in newspapers, emails, direct mailers and websites, including Facebook.

As a result, the agencies said they were sending warning letters to 36 entities for possible misleading claims and opening 19 investigations into what look to be more egregious violations of the 2011 Mortgage Acts and Practices Advertising Rule prohibiting misrepresentations for consumer mortgage products.

The agencies did not identify the targets of the enforcement actions other than to say that the rule covered nonbank entities, such as mortgage lenders, brokers, servicers, lead generators, home builders and real estate agents.

The review "revealed several types of troubling claims that could be misleading to consumers," the FTC said.

For example:

• Promises of low "fixed" interest rates without disclosing that the rate was only fixed for an introductory period as short as 30 days

• Ads containing statements or logos suggesting the advertiser was affiliated with a government agency, such as the Veterans Administration or the U.S. Department of Housing and Urban Development

• Ads "guaranteeing" approval

• Promises that a reverse mortgage lets borrowers stay in their home payment-free (reverse mortgages still require the homeowner to keep up with tax and insurance payments)

Many of the problem ads were directed at older Americans or military personnel and veterans, the agencies said.

"We're making sure that advertisers are on notice that they have to comply with the law," said Thomas Pahl, FTC assistant director for financial practices.

For tips on identifying misleading mortgage claims visit and

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Patricia Sabatini: or 412-263-3066.


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