CFPB fines mortgage lender over claims it deceived veterans
The Consumer Financial Protection Bureau ordered Village Capital & Investment, a nonbank mortgage lender in Henderson, Nev., to issue refunds and pay a fine for allegedly misleading veterans about refinancing their mortgages.
The CFPB filed a federal lawsuit Tuesday in the U.S. District Court for the District of Nevada, alleging Village Capital loan officers misrepresented the cost savings to veterans when pitching so-called interest rate reduction refinancing loans.
The nonbank lender made in-home sales presentations to veterans in San Antonio to induce them to refinance loans that were guaranteed by the Department of Veterans Affairs, the CFPB said.
The loan officers inflated the amount of principal that veterans owed on their existing mortgages, underestimated the future monthly payments to be paid on refinanced loans, and overestimated the total monthly benefit of refinancing, according to the agency.
Village Capital has 100 employees and operates 10 branches in 10 states.
Allen Knudson, Village Capital's president, said the company cooperated with the CFPB, verified that disclosures were "timely and accurate," and that every veteran received "a significant benefit from their refinance."
"We volunteered to help in any way possible to make sure our Veterans were treated with the respect they deserve," Knudson said in an emailed statement.
The CFPB said Village Capital engaged in deceptive sales practices from March 2017 to August 2018, yet the bureau did not state how many veterans had been deceived or had obtained loans from the lender during that period.
The bureau filed a proposed stipulated final judgment that requires Village Capital to pay $268,869 in redress to consumers and a $260,000 penalty.
The enforcement action is the 10th brought by the agency this year under acting CFPB Director Mick Mulvaney. Such actions have declined significantly under his watch compared with the level under his predecessor, Richard Cordray.