WASHINGTON--The Consumer Financial Protection Bureau (CFPB) has permanently banned RMK Financial Corp., which does business as Majestic Home Loans, from the mortgage lending industry by prohibiting RMK from engaging in any mortgage lending activities or receiving remuneration from mortgage lending.
The CFPB noted that in 2015 it issued an agency order against RMK for, among other things, sending advertisements to military families that led the recipients to believe the company was affiliated with the United States government.
“Despite the 2015 order’s prohibition on these and other actions, the company engaged in a series of repeat offenses, including disseminating millions of mortgage advertisements to military families that deceptively used fake U.S. Department of Veterans Affairs (VA) seals, the Federal Housing Administration (FHA) logo, and other language or design elements to falsely imply that RMK was affiliated with the government,” the Bureau said.
In addition to the ban, RMK will also pay a $1 million penalty that will be deposited into the CFPB’s victims relief fund.
About the Company
RMK is a privately held corporation with its principal place of business in Ontario, Calif. RMK is a nonbank that is licensed as a mortgage broker or lender in at least 30 states and Puerto Rico. RMK originates consumer mortgages, including mortgages guaranteed by the VA and mortgages insured by the FHA. However, RMK is affiliated with neither government agency.
The CFPB noted it has previously warned about VA home loan scams. Many servicemembers, veterans, and military spouses receive fraudulent calls and mailers from companies claiming to be affiliated with the government, the VA, or their home loan servicer.
In the case of RMK, the CFPB said it found the company disseminated millions of mortgage advertisements to military families that made deceptive representations or contained inadequate or impermissible disclosures in violation of the 2015 order, the Consumer Financial Protection Act, the Mortgage Acts and Practices Advertising Rule, and the Truth in Lending Act.
The Specifics
Specifically, the CFPB said the company harmed military families and other consumers by sending millions of advertisements for mortgages that:
- Tricked military families about the government’s role in sending the advertisements or providing the loans. “RMK sent advertisements that misrepresented that RMK was, or was affiliated with, the VA or the FHA, that the VA or FHA sent the notices, or that the advertised loans were provided by the VA or FHA. Military families or others who view such advertisements may decide to purchase the advertised mortgage based on the trust they have in the government agencies.”
- Deceived borrowers about interest rates and key terms. “RMK’s advertisements illegally disclosed a simple annual interest rate more conspicuously than the annual percentage rate, illegally advertised unavailable credit terms, and used the name of the homeowner’s current lender in a misleading way. Consumers who view such advertisements may be misled about the terms being offered or mistakenly believe their current lender is sending the advertisement.”
- Falsely misrepresented loan requirements and lied about projected savings from refinancing. “RMK’s advertisements misrepresented that the benefits available to those who qualified for VA or FHA loans were time limited. Additionally, RMK’s advertisements misrepresented that military families could obtain VA cash-out refinancing loans without an appraisal and without incurring the cost of an appraisal, that an appraisal was not a condition of qualifying for VA cash-out refinancing loans, and that no minimum credit score and no income verification were required to qualify for VA cash-out refinancing loans. Finally, RMK’s advertisements misrepresented the amount of monthly payments, the annual savings under the advertised loans, and the cash available in connection with the advertised loans.”
Enforcement Action
The order requires RMK to:
- Exit the mortgage lending business. RMK is permanently banned from engaging in any mortgage lending activities, including advertising, marketing, promoting, offering, providing, originating, administering, servicing, or selling mortgage loans, or otherwise participating in or receiving remuneration from mortgage lending, or assisting others in doing so.
- Pay a $1 million fine. RMK must pay a $1 million penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund.
It’s Called Fresh for a Reason. And We Offer Home Delivery. For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com