ClearPath Lending, Inc.
On September 14, 2020, the Consumer Financial Protection Bureau (Bureau) issued a consent order against ClearPath Lending, Inc. (ClearPath), a California corporation that is licensed as a mortgage broker or lender in about 22 states. ClearPath offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). ClearPath’s principal means of advertising VA-guaranteed loans is through direct-mail campaigns sent primarily to United States military servicemembers and veterans. The Bureau found that ClearPath sent consumers mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures, in violation of the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices—Advertising Rule (MAP Rule), and Regulation Z. Specifically, ClearPath sent consumers numerous advertisements for VA-guaranteed mortgages that, among other things, misrepresented the credit terms of the advertised mortgage and failed to include disclosures required by Regulation Z. The consent order requires ClearPath to pay a $625,000 civil money penalty and imposes requirements to prevent future violations.
This action stems from a Bureau sweep of investigations of multiple mortgage companies that use deceptive mailers to advertise VA-guaranteed mortgages.
On July 24, 2020, the Bureau announced consent orders against Sovereign Lending Group, Inc., and Prime Choice Funding, Inc.; on August 21, 2020, the Bureau announced a consent order against Go Direct Lenders, Inc.; on August 26, 2020, the Bureau announced a consent order against PHLoans.com, Inc.; on September 1, 2020, the Bureau announced consent orders against Hypotec, Inc. and Service 1st Mortgage, Inc.; and on September 2, 2020, the Bureau announced a consent order against Accelerate Mortgage, LLC for similar violations. The Bureau commenced this sweep in response to concerns about potentially unlawful advertising in the market that the VA identified.