HTML Preview Formal Mortgage Offer Letter page number 1.
To: Company ABC
Re: Your Mortgage Credit Product Advertisements
Date: November 19, 2012
This letter is to advise you that you may have advertised a mortgage credit product or
service in a misleading manner in violation of federal law.
The CFPB enforces federal consumer financial laws, including laws that prohibit material
misrepresentations in advertisements for mortgage credit products. The Mortgage Acts and
Practices – Advertising rule,
1
or “MAP Rule,” provides that it is a violation of federal law for
any person to make a “material misrepresentation, expressly or by implication, in any
commercial communication, regarding any term of any mortgage credit product.”
2
A mortgage
credit product is “any form of credit that is secured by real property or a dwelling and that is
offered or extended to a consumer primarily for personal, family, or household purposes.”
3
The
CFPB also enforces 12 U.S.C. § 5536(a)(1), which prohibits unfair, deceptive, or abusive acts or
practices in connection with consumer financial products or services, including in the marketing
or sale of mortgage credit products.
We have reviewed one or more of your mortgage advertisements and it appears that they
may violate federal law to the extent that they: (1) suggest, through the incorporation of
“Government Loan Department” in your company’s return address at the top of the
advertisement, the use of a logo very similar to that of the United States Department of Housing
and Urban Development, and the prominent display of a website address that includes the initials
of the Federal Housing Administration, that your company is affiliated with a government
agency or government-sponsored program; (2) suggest that consumers who enter into a reverse
mortgage will have “no payments,” notwithstanding that such consumers may continue to be
responsible for tax and insurance payments; (3) indicate that a consumer is pre-approved for, or
guaranteed, specific loan rates or terms; and (4) indicate that a consumer entering into a reverse
mortgage will have the opportunity to receive a discount on existing credit card debt in
connection with the loan. Copies of the advertisements referred to in this letter are attached
hereto for your reference. While this letter refers specifically only to the attached advertisements,
you should also consider whether other advertising you disseminate in any form, including
internet advertisements, may require modification in order to comply with federal laws.
1
See 12 C.F.R. Part 1014.
2
Id. at § 1014.3.
3
Id. at § 1014.2.