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Feds get fed up with false mortgage advertisements: warned to stop

Published: Tuesday, Nov. 20 2012 10:50 a.m. MST

President Barack Obama, accompanied by Elizabeth Warren, announces on Sept. 17, 2010 that Warren will head the Consumer Financial Protection Bureau. This week, the CFPB cracked down on false mortgage advertisements.

Susan Walsh, AP

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The U.S. government warned mortgage lenders to clean up misleading advertisements Monday, according to NBC News.

The crackdown came after two agencies, the Federal Trade Commission and the Consumer Financial Protection Bureau, reviewed about 800 advertisements for mortgage-related loans.

The review discovered four problems with the advertisements, which were found on the Internet, in newspapers and in mailers. One was that they misrepresented their connection with the government by having official-looking seals. These seals cause consumers to believe they were affiliated with the government.

Some had false information about interest rates, showing lower rates than were actually offered.

Others presented images that misrepresented the amount of cash or credit available.

Finally, companies made statements regarding reverse mortgages that made it seem like consumers wouldn't have to pay on the product, when in actuality they had monthly or other periodic tax or insurance payments.

"Misrepresentations in advertising for mortgage products pose a significant risk of harm to consumers because they can confuse and mislead consumers when they are making one of the biggest transactions of their lives,” said Kent Marcus, assistant director for enforcement at the CFPB to NBC News.

EMAIL: alovell@deseretnews.com

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