A federal regulatory letter outlines last year’s mortgage-related enforcement activity tied to noncompliance with mortgage rules and regulations. Prominent among the defendants were firms that promise to help distressed borrowers.
The Federal Trade Commission said that last year it engaged in law enforcement, rulemaking and policy development of the Truth in Lending Act and its implementing Regulation Z.
Topics covered by Reg Z include advertising, extension and certain other aspects of consumer credit, according to the commission.
The activity was discussed in a May 9 letter from the FTC to the Consumer Financial Protection Bureau.
According to the agency, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 preserved the FTC’s authority over non-bank lenders and their compliance with Reg Z as well as Regulation B, which implements the Equal Credit Opportunity Act.
“The FTC’s primary focus in the financial services area is bringing law enforcement actions against those who violate statutes and regulations,” the letter stated. “In addition to its law enforcement activities, the FTC engages in research and policy development related to the types of financial services these statutes and regulations cover.”
Letters were sent in November 2012 to 20 companies — including real estate agents, home builders, and lead generators — warning about potentially deceptive advertisements. The letters urged the companies to comply the MAP-Ad Rule and the FTC Act.
Around a dozen other companies, including mortgage brokers and lenders, were issued warning letters.
The Debt Advocacy Center and 10 related defendants last year settled with the FTC for $750,000 charges that they falsely claimed the forensic loan audits they performed would result in completed short sales or loan modifications.
Two new forensic audit cases include one against a firm that charged between $795 and $1,595, promised a partial refund if unsuccessful and touted a 90 percent chance of a loan modification. Defendants in that case falsely portrayed themselves as non-profit, free, accredited, or HUD-certified housing counselors. Preliminary injunctions in the case froze assets of defendants.
The second case involves defendants that charged between $1,995 and $2,590 for forensic audits but didn’t come through with loan modifications or, in some cases, didn’t even contact the lenders. A preliminary injunction was obtained in this case.
