On August 29, the CFPB released a consent order and stipulation against a national mortgage originator for alleged deceptive acts under the CFPA. The CFPB found the respondent misrepresented certain payment terms on a specific worksheet in three states during closings. The worksheet, called the borrower “net benefit” worksheet, accompanied closings on VA cash-out refinance loans. It allegedly misstated how a consumer’s “previous” monthly mortgage payment would compare to a “new” monthly mortgage payment after refinancing with the respondent. Specifically, only principal and interest payments were included in the “new loan payment amount,” making the loans appear less expensive by omitting taxes and insurance from the “new loan payment” calculations. The misstatements were provided to borrowers in North Carolina and Maine through 2020 and in Minnesota through 2018, affecting at least 3,000 cash-out refinances.

As part of the consent order, the company agreed to pay a $2.25 million civil money penalty and to implement a comprehensive compliance plan within 30 days. The plan must ensure that the company’s mortgage lending activities comply with all applicable laws and the terms of the consent order. The company’s executive officers must oversee compliance and submit a written progress report to the Bureau one year after the order’s effective date. Specifically, the consent order will require the company to retain specific business records, sales scripts, training materials, consumer complaints, and to avail these documents to the Bureau upon request. The order will remain in effect for five years, during which the company must provide a copy of the consent order to any persons with responsibilities related to its subject matter. The Bureau may impose additional penalties if the company violates the terms of the consent order. The company neither admitted nor denied any of the CFPB’s findings.