November is a special month where our country honors the men and women who have served us in the armed forces. It’s also when the Consumer Financial Protection Bureau (CPFB) published their Snapshot of Servicemember Complaints detailing veterans’ most common complaints about mortgage lenders. Aggressive and deceptive marketing and advertising practices were among the most complained about topics.
According to the CFPB’s report, veterans continue to face difficulties with mortgage refinancing due to aggressive solicitations, misleading advertisements, and failed promises by some lenders. Some had ads promoted low APR rates without clearly disclosing terms and conditions – often misleading veterans who are lacking important loan details. Other ads failed to inform consumers of all the conditions that must be met in order to qualify for an offer.
Where did the CFPB get the insights? Right from the their very own Consumer Complaint Database.
Not only have these deceptive tactics given military borrowers a huge headache, they’ve also sounded the alarm to the CFPB for further scrutiny. Last year, the CFPB fined NewDay Financial $2 million for deceptive mortgage advertising and kickbacks. Now, with their trove of 12,500 mortgage complaints from servicemembers, veterans, and their families, the CFPB only has to sift through them to find the next mortgage company to possibly investigate.
So, what can mortgage lenders do to ensure transparency with servicemember borrowers and avoid any potential regulatory violations? A few places to start:
- Terms and conditions—as well as any other disclosures—should be placed directly adjacent to offers and be conspicuous to any consumer viewing the offers. The extra effort to carefully position these disclosures where they should be placed can prevent massive financial liability in the future.
- Live up to the promises made during the application process. Monitor your contact center agents to make sure what they are promising is what you’ll be delivering.
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