The Consumer Services Division of the Washington State Department of Financial Institutions (DFI) has charged a reverse mortgage lender with false, deceptive and misleading advertising practices. The Statement of Charges seeks a final order requiring the company to cease and desist from engaging in false advertising practices, pay a $300,000 fine, and pay an investigative fee.
The DFI highlighted the following misrepresentations:
- On the outside of the solicitation, the return address indicated the solicitation was a “Payment Reduction Notification,” sent from a “Rate Review Department,” and that the solicitation contained “IMPORTANT INFORMATION REGARDING YOUR MORTGAGE LOAN OF RECORD;”
- On the inside of the solicitation, that the recipient’s “Payment Reduction Status” was “Pending Review,” had been issued by a “RATE REDUCTION DEPARTMENT” or “RATE REDUCTION AND HOME EQUITY DEPARTMENT,” and involved an “FHA HECM RATE REDUCTION PROGRAM” or “FHA RATE REDUCTION AND HOME EQUITY;”
- On the inside of the solicitation, that the recipient’s “Mortgage Loan of Record” had “been reviewed by our rate lock department;”
- On the inside of the solicitation, that the solicitation involved a “Special FHA Program;” and
- On the inside of the solicitation, Respondent described the “Special FHA Program,” its HECM loan products, as a “New Government Regulated Benefit.”
When developing new advertising, members are encouraged to adhere to the NRMLA “Dirty Dozen” Unethical Advertising Practices list, developed by the Ethics Committee, and published in Ethics Advisory 2012-1: Ethical Advertising Practice Requirements.
You can also submit an official complaint if you see a questionable advertisement or inappropriate behavior that may violate NRMLA’s Code of Ethics.