Federal regulators are cracking down on ads from mortgage lenders that they say are misleading, including ones specifically targeting the elderly and veterans.
The Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) announced Monday they were warning mortgage lenders about their advertisements. Both agencies are investigating several lenders they believe might have committed "more serious violations of the law."
The warnings and investigations stem from a random "sweep" of roughly 800 mortgage ads. Some ads implied private programs were backed by the government, or misled regarding the interest rates or costs tied to the mortgages. The CFPB warned about 12 lenders, while the FTC sent letters to 20 companies.
The regulators said that some ads included "official-looking seals or logos" that implied mortgage lenders might be affiliated with the government. Others may have misled consumers about available interest rates, or the costs of seeking a reverse mortgage.
Some ads included a mock check, which the CFPB said suggested a consumer was already approved for the amount on the check as part of a mortgage refinancing or reverse mortgage, when in fact there were multiple steps yet to be taken.
The warnings letters caution lenders that their ads could be deemed misleading, and recommend the businesses do a thorough review of their advertising practices.