Ads from shady mortgage-loan-services firms implying they're affiliated with the Obama administration abound online and off -- and now the federal government is cracking down. Nearly 20 real-estate and financial-services companies are under investigation for allegedly making deceptive claims in their ads.
The investigations are the result of the Federal Trade Commission's first joint initiative with the recently established Consumer Financial Protection Bureau. As the real estate market slowly improves, the agencies suggested they expect an increase in ads from mortgage-lending services.
Both agencies also sent warning letters to companies after studying more than 800 ad messages seen on TV, in email, and online on sites including Facebook. The CFPB issued 12 letters to mortgage brokers and lenders and is investigating six firms. The FTC sent 20 warning letters to companies in the broader real-estate sector including home builders, real-estate agents and mortgage-lead generation companies and is investigating 13 such companies.
Turn on the radio or do a quick Google search for mortgage-loan-assistance services and ads from companies implying some sort of government affiliation are not hard to find. For example, some firms and foreclosure defense attorneys include images of President Barack Obama on ad landing pages or use his name in search ads promoting loan-modification services.
Advertisers such as ForeclosureAdvisers.com and GetYourMortgageModified.com have no government affiliation, but that doesn't stop them from mentioning "Obama" in their Google search ads.
Though the initial ad inspection was conducted jointly, the resulting investigations will be handled separately by each agency. Still, as noted during a press call with the agencies today, investigators at the FTC and CFPB will be in communication to "avoid double teaming businesses."
In addition to ads that falsely imply an official government association, the agencies also considered ads that promote low mortgage rates without mentioning important terms of the loans, as well as ads guaranteeing loan approval. Many of the ads inspected by the two agencies were brought to their attention by consumers.
The agencies would not reveal the names of firms that were sent warning letters or are under investigation. Advertisers under investigation are subject to civil penalties if found in violation of the Mortgage Acts and Practices Advertising Rule.