- The Consumer Financial Protection Bureau (“CFPB”) reached a settlement with reverse-mortgage lender Nationwide Equities Corporation (“Nationwide Equities”) to resolve allegations that it used false and misleading advertising to market its reverse mortgages in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Truth in Lending Act, and the Mortgage Acts and Practices Advertising Rule.
- According to the consent order, the CFPB found that Nationwide Equities misled potential customers by misrepresenting the costs of its reverse mortgages, failing to explain that borrowers must continue to pay taxes and insurance or risk foreclosure, falsely stating that the consumer was pre-approved when that was not the case, and exaggerating the potential savings a consumer could realize through its reverse mortgages, among other things.
- Under the terms of the consent order, Nationwide Equities will pay a civil penalty of $140,000 to the CFPB. It is also enjoined from using misleading and illegal advertising practices, and must implement a comprehensive compliance system and designate an advertising compliance official to ensure that its future advertising complies with consumer financial protection laws and with the consent order, among other things.