The agency has penalized another broker of VA loans for deceptive advertising
The Consumer Financial Protection Bureau’s ongoing sweep of VA lenders has netted another business that allegedly deceived veterans.
The CFPB has issued a consent order against PHLoans, a California-based mortgage broker licensed in 11 states. Until at least April 2019, PHLoans was known as Pacific Home Loans. The company provides VA mortgages, and its principal means of advertising is through direct mail, sent primarily to service members and veterans, the CFPB said.
According to the CFPB, PHLoans sent out advertising mailers that contained false, misleading or inaccurate statements or that lacked required disclosures. Among the misrepresentations, the CFPB said, PHLoans lied about the credit terms it offered and the payment amount applicable to the mortgages it advertised.
“For example, PHLoans advertisements sent to 25 consumers from May 2018 through July 2018 stated that the consumer could ‘Take’ a $20,000 cash-out amount for “ONLY $95.68 PER MONTH,’” the bureau said in a legal filing. “In fact, PHLoans did not offer a product with those terms.”
The consent order against PHLoans requires the company to pay a $260,000 civil penalty. The order also imposes injunctive relief, including the requirement that the broker “bolster its compliance functions by designating an advertising compliance official who must review its mortgage advertisements for compliance prior to their use,” the CFPB said.
The action against PHLoans is the fourth case stemming from a recent spate of CFPB investigations into shady VA lenders. Earlier this month, the bureau issued a consent order against Go Direct Lenders for similar violations. Last month, it penalized Sovereign Lending Group and Prime Choice Lending for misleading advertisements aimed at veterans.