Lender set­tles de­cep­tive ads case

Los Angeles Times - - COMPANY TOWN - By E. Scott Reckard scott.reckard@la­times.com

A Ran­cho Cu­ca­monga mort­gage lender has agreed to pay $250,000 to set­tle ac­cu­sa­tions by fed­eral reg­u­la­tors that its ad­ver­tis­ing de­ceived con­sumers into be­liev­ing that the com­pany was af­fil­i­ated with the U.S. gov­ern­ment.

The Con­sumer Fi­nan­cial Pro­tec­tion Bureau on Thurs­day an­nounced the set­tle­ment with RMK Fi­nan­cial Corp., which does busi­ness as Ma­jes­tic Home Loan.

The con­sumer bureau said RMK mailed ads to more than100,000 con­sumers in sev­eral states, in­clud­ing thou­sands of mil­i­tary ser­vice mem­bers.

The mail­ers used the names and lo­gos of the Depart­ment of Vet­er­ans Af­fairs and the Fed­eral Hous­ing Ad­min­is­tra­tion in a way that falsely im­plied that the ad­ver­tise­ments were sent or en­dorsed by the VA or FHA, bureau Direc­tor Richard Cor­dray said.

The bureau said the ads also led con­sumers to wrongly be­lieve that cer­tain mort­gages had fixed rates when the loans in fact had vari­able rates.

“De­cep­tive ad­ver­tis­ing has no place in the mort­gage mar­ket­place, and the con­sumer bureau will con­tinue to take ac­tion against com­pa­nies that mis­lead con­sumers with false claims of gov­ern­ment af­fil­i­a­tion,” Cor­dray said.

RMK nei­ther ad­mit­ted nor de­nied the ac­cu­sa­tions in ac­cept­ing a con­sent de­cree that or­dered it to end its “il­le­gal and de­cep­tive” prac­tices and to pay the civil penalty.

Ef­forts to reach RMK’s chief ex­ec­u­tive, Sonny Je­ung, were un­suc­cess­ful.

The con­sumer bureau ac­cused three other mort­gage lenders in Fe­bru­ary of falsely im­ply­ing that they were af­fil­i­ated with the gov­ern­ment, in­clud­ing Amer­i­can Pre­ferred Lend­ing in San Diego, which paid a civil penalty of $85,000 to set­tle the case with­out ad­mit­ting wrong­do­ing.

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