On September 2, 2020, the CFPB announced it has issued a consent order against Accelerate Mortgage, LLC, a Newark, Delaware-based company that is licensed as a mortgage broker and lender in about 31 states. Accelerate offers and provides mortgage loans guaranteed by the U.S. Department of Veterans Affairs (VA). Accelerate’s principal means of advertising VA-guaranteed loans is through direct-mail advertisements sent primarily to U.S. military servicemembers and veterans.
Specifically the CFPB found that Accelerate:
- Created advertisements that:
- misrepresented the credit terms of the advertised mortgage loan
- stated credit terms that the company was not actually prepared to offer to the consumer
- misrepresented the interest rate or payment amount applicable to the advertised mortgage and the nature or amount of cash available to the consumer in connection with the advertised mortgage.
- Made misrepresentations about the existence or amount of fees or costs to the consumer in connection with the advertised mortgage
- Created the false impression that Accelerate was affiliated with the government by using words, phrases, images, or designs that are associated with the VA, Internal Revenue Service, or Federal Deposit Insurance Corporation
- Falsely represented that the consumer’s access to mortgage-refinance benefits through VA-guaranteed loans was time-limited.
- Failed to properly disclose, when required by Regulation Z, credit terms for the advertised mortgage, such as the annual percentage rate of the advertised mortgage or the consumer’s repayment obligations over the full term of the loan.
The consent order requires Accelerate to pay a civil money penalty of $225,000 and imposes requirements to prevent future violations.
The Accelerate case is the seventh case stemming from a Bureau sweep of investigations of multiple mortgage companies that use deceptive mailers to advertise VA-guaranteed mortgages. The Bureau commenced this sweep in response to concerns about potentially unlawful advertising in the market that the VA identified. The other six mortgage companies include:
September 1 Hypotec, Inc., a mortgage broker based in Miami, Florida
September 1 Service 1st Mortgage, Inc., a mortgage broker based in Glen Burnie, Maryland
August 26 PHLoans.com, Inc. (PHLoans), a California corporation
August 21 Go Direct Lenders, Inc. (Go Direct), a California corporation
July 24 Prime Choice Funding, Inc., a California corporation
July 24 Sovereign Lending Group, Inc., a California corporation