Many homeowners are struggling to keep the financial roof from caving in – and questionable claims in mortgage ads make it even tougher to do. Continuing its fight against deception in mortgage advertising, the FTC has proposed a rule that would ban misrepresentations and would allow the FTC and the states to seek financial penalties against businesses that violate the rule.
The proposed rule would prohibit all material misrepresentations in ads about consumer mortgages, including a list of 19 specific examples of deceptive claims about fees, costs, and obligations. The scope of the rule would be broad. Mortgage lenders, brokers, and servicers; real estate agents and brokers; advertising agencies; home builders; lead generators; rate aggregators; and other companies within the FTC’s jurisdiction would be covered.
A central part of the proposed rule is new civil penalty authority for violations, in addition to the injunctions the FTC already seeks. States – key partners in battling deception in mortgage advertising – would be able to bring actions for civil penalties, too.
Interested in filing comments about the proposed rule? The deadline is November 15, 2010.