Prime Choice Funding, Inc.
On July 24, 2020, the Consumer Financial Protection Bureau (Bureau) issued a consent order against Prime Choice Funding, Inc. (Prime Choice), a California corporation that is licensed as a mortgage broker or lender in about 35 states and the District of Columbia. Prime Choice offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). Prime Choice’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 Prime Choice 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, Prime Choice sent consumers numerous advertisements for VA-guaranteed mortgages that, among other things, misrepresented the credit terms of the advertised mortgage, misleadingly described an adjustable-rate mortgage as having a “fixed” rate, falsely stated that the consumer had been prequalified for the advertised mortgage, created the false impression that Prime Choice was affiliated with the government, used the name of the consumer’s current lender in a misleading way, and failed to include multiple disclosures required by Regulation Z. The consent order requires Prime Choice to pay a $645,000 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 a consent order against Sovereign Lending Group, Inc., a California corporation, for similar violations.