The Consumer Financial Protection Bureau (CFPB) gave RMK Financial Corp. the death sentence on Monday, permanently banning the company from engaging in mortgage lending activities or from making money in the industry.
In 2015, the CFPB issued an agency order against Ontario, California-based RMK, which did business as Majestic Home Loans, for a number of offenses. Chief among these was the distribution of advertisements to military families that bore fake seals from the U.S. Department of Veterans Affairs (VA), fake logos from the Federal Housing Administration (FHA), and other deceptive language and symbols. Such insignia and verbiage falsely implied that RMK was affiliated with the U.S. government or that the notices were sent by the VA or FHA, the CFPB stated.
While RMK was licensed in at least 30 states and originated VA-guaranteed loans, it was not officially affiliated with the VA or FHA. Other violations within RMK’s advertising included misleading use of the names of homeowners’ current lenders; deceptive practices regarding interest rates and unavailable credit terms; and misrepresentation of loan requirements, monthly payment amounts and projected savings from refinancing. The company was ordered to end the false advertising practices and to pay a fine.
Despite the rebuke, however, RMK continued to disseminate “millions” of such ads, according to a statement from the CFPB. Officially, the CFPB found that RMK’s actions are in violation of its previous 2015 order, as well as the Consumer Financial Protection Act, the Mortgages Acts and Practices Advertising Rule, and the Truth in Lending Act.
“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” said CFPB director Rohit Chopra. “Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good.”
In addition to the ban, RMK has been penalized $1 million, which will be deposited into the CFPB’s victims relief fund.