RMK Financial banned by CFPB from mortgage lending industry
RMK Financial Corporation, which does business as Majestic Home Loans, has been permanently banned by the Consumer Financial Protection Bureau (CFPB) from the mortgage lending industry following a series of repeat offenses — which occurred despite the CFPB’s law enforcement order issued in 2015.
The CFPB issued the initial agency order against RMK for, among other things, sending advertisements to military families that led the recipients to believe the company was affiliated with the U.S. government. The CFPB ordered RMF at that time to end its illegal and deceptive practices and pay a civil penalty of $250,000.
“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” CFPB Director Rohit Chopra said in a statement.
The Ontario, California-based firm engaged in a “series of repeat offenses, including disseminating millions of mortgage advertisements to military families that deceptively used fake U.S. Department of Veterans Affairs (VA) seals, the Federal Housing Administration (FHA) logo, and other language or design elements to falsely imply that RMK was affiliated with the government,” the CFPB said.
RMK Financial is a nonbank that is licensed as a mortgage broker or lender in at least 30 states and Puerto Rico. RMK originated consumer mortgages, including mortgages guaranteed by the VA and mortgages insured by the FHA. RMK, however, isn’t affiliated with either agency.
The CFPB’s decision to ban the company from doing business in the mortgage lending industry means that RMK Financial is prohibited from any mortgage lending activities, including advertising, marketing, promoting, offering, providing, originating, administering, servicing, or selling mortgage loans.
RMK Financial also faces a $1 million in penalty fees, which will be deposited into the CFPB’s victims relief fund.
The CFPB previously issued a warning about VA home loan scams. The agency said many service members, veterans, and military spouses receive fraudulent calls and mailers from companies claiming to be affiliated with the government, the VA, or their home loan servicer.
Per the CFPB, RMK Financial specifically harmed military families and other consumers by sending millions of advertisements for mortgages that tricked military families about the government’s role in sending the advertisements or providing the loans; deceived borrowers about interest rates and key terms; and falsely misrepresented the loan requirements and lied about projected savings from refinancing.
The CFPB’s investigation also found that RMK Financial’s practices violated the Truth in Lending Act, the Mortgage Acts and Practices Advertising Rule, and other federal consumer laws.
Majestic Home Loans didn’t respond to requests for comment.
The lender abruptly closed in February, according to posts on social media.
“Sadly Majestic Home Loan has had to close their business due to a legacy issue,” RMK Financial’s former account executive said earlier this month on LinkedIn.
A similar comment was posted by another former account executive at Majestic Home Loan.