The Consumer Financial Protection Bureau (CFPB) issued a consent order yesterday against PHLoans.com, Inc. (PHLoans), a California corporation that is licensed as a mortgage broker or lender in about 11 states, according to a CFPB press release. Until at least April 2019, PHLoans was known as Pacific Home Loans, Inc. PHLoans offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). PHLoans’s principal means of advertising VA-guaranteed loans is through direct-mail advertisements sent primarily to U.S. military servicemembers and veterans. The Bureau found that PHLoans sent consumers numerous mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures, in violation of the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z. The consent order requires PHLoans to pay a civil money penalty and imposes requirements to prevent future violations. Yesterday’s action is the fourth case stemming from a CFPB sweep of investigations of multiple mortgage companies that use deceptive mailers to advertise VA-guaranteed mortgages. On July 24, 2020, the CFPB announced consent orders against Sovereign Lending Group, Inc., and Prime Choice Funding, Inc., and on August 21, 2020, the CFPB announced a consent order against Go Direct Lenders, Inc., for similar violations. The Bureau commenced this sweep in response to concerns about potentially unlawful advertising in the market that the VA identified. Accurate and legally compliant advertising provides consumers with valuable information about the different types of mortgages and terms available so they can effectively shop for products that best meet their needs.
