Mortgage Lenders Under Fire: The Consequences of Non-Compliance

As a homeowner, there’s nothing more frustrating than feeling misled by your lender. Unfortunately, this is exactly what happened to over 900 consumers who were deceived by Bank of England in Arkansas. The lender, along with nine former employees, has settled with the Federal Deposit Insurance Corporation (FDIC) over numerous violations of real estate laws.

Bank of England in Arkansas

The violations are staggering. Originators in one office misled Department of Veterans Affairs refinance loan applicants, telling them they could skip two months of mortgage payments. This is not only unethical, but it also resulted in significant financial harm to veterans and their families.

“Veterans and their families who were deceived into refinancing their VA loans were overcharged and did not receive the loan products promised, resulting in significant consumer harm,” said Mark Pearce, the FDIC’s division of depositor and consumer protection director.

But that’s not all. The lender also lured borrowers with low loan prices that were raised prior to closing. This is a clear violation of the Real Estate Settlement Procedures Act (RESPA) and the Fair Credit Reporting Act.

The cost of non-compliance

The consequences of non-compliance are severe. The bank has made $1.9 million in remediation payments to over 900 consumers. The FDIC has also ordered the bank to pay a $1.5 million civil money penalty, and its ex-workers to pay a combined $263,500.

The Bank of England has also violated the Home Mortgage Disclosure Act (HMDA) by failing to report accurate data on its 2021 loan application. This lack of transparency is unacceptable and highlights the need for stricter regulations in the mortgage industry.

The importance of regulation

The Bank of England is not the only lender to face penalties this year. The Department of Housing and Urban Development has penalized over 70 institutions for Federal Housing Administration infractions. The Consumer Financial Protection Bureau also regularly announces enforcement actions, highlighting the need for lenders to prioritize compliance.

As a homeowner, it’s essential to do your research and choose a lender that prioritizes transparency and compliance. Remember, a lender that cuts corners may end up costing you more in the long run.

The importance of transparency

In conclusion, the consequences of non-compliance are severe, and lenders must prioritize transparency and compliance to avoid harming consumers. As a homeowner, it’s essential to stay informed and choose a lender that shares your values.