On August 26, 2020, the Consumer Financial Protection Bureau (Bureau) issued a consent order against PHLoans.com, Inc. (PHLoans), a California corporation that is licensed as a mortgage broker or lender in about 11 states. PHLoans offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). PHLoans’s principal means of advertising VA-guaranteed loans is through direct-mail campaigns sent primarily to United States military servicemembers and veterans. The Bureau found that PHLoans sent consumers millions of mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures, in violation of the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices—Advertising Rule (MAP Rule), and Regulation Z. Specifically, PHLoans sent consumers numerous advertisements for VA-guaranteed mortgages that, among other things, misrepresented the credit terms of the advertised mortgage and failed to include disclosures required by Regulation Z. The consent order requires PHLoans to pay a $260,000 civil money penalty and imposes requirements to prevent future violations.
This action stems from a Bureau sweep of investigations of multiple mortgage companies that use deceptive mailers to advertise VA-guaranteed mortgages.
On July 24, 2020, the Bureau issued consent orders against Sovereign Lending Group, Inc., and Prime Choice Funding, Inc., and on August 21, 2020, the Bureau announced a consent order against Go Direct Lenders, Inc., for similar violations.