WASHINGTON (Legal Newsline) –
The Consumer Financial Protection Bureau (CFPB) announced Dec. 7 that it has
ordered American Advisors Group, Reverse Mortgage Solutions and Aegean
Financial to stop alleged deceptive advertising practices, implement systems to
ensure they are complying with all laws, and pay penalties.
The three companies are
reverse mortgage companies. A reverse mortgage is a special type of loan that
allows homeowners who are 62 or older to use home equity to defer loan payment
until they pass away, sell or move out. Consumers usually receive proceeds from
the loan as either a lump-sum payment, monthly payment or as a line of credit.
companies tricked consumers into believing they could not lose their homes with
a reverse mortgage,” CFPB
Director Richard Cordray said. “All mortgage brokers and lenders need to abide by federal advertising
disclosure requirements in promoting their products.”
The Mortgage Acts and
Practices Advertising Rule bans companies from using misleading claims in
mortgage advertising. The Dodd-Frank Wall Street Reform and Consumer Protection
Act bars institutions from engaging in deceptive acts or practices.
American Advisors Group will
pay a $400,000 penalty, Reverse Mortgage Solutions a $325,000 penalty, and
Aegean Financial a $65,000 penalty.