Tuesday, September 11, 2007

FTC "Advises" About Deceptive Mortgage Ads

by Tanta on 9/11/2007 12:39:00 PM

The good news? The Federal Trade Commission is talking about deceptive mortgage advertising:

“Many mortgage advertisers are making potentially deceptive claims about incredibly low rates and payments, without telling consumers the whole story – for example, that these low rates and payments apply for a short period only and can go up substantially after the loan’s introductory period,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “Home ownership is the American dream, but it can become a nightmare for consumers who don’t have the information they need to understand the terms of their mortgage.”

In warning letters, the agency is advising more than 200 advertisers and media outlets that some mortgage ads are potentially deceptive or in violation of the Truth in Lending Act. The ads, including some in Spanish, were identified in June during a nationwide review focused on claims for very low monthly payment amounts or interest rates, without adequate disclosure of other important loan terms.
The bad news?
During the past decade, the FTC has brought 21 actions against companies in the mortgage lending industry, focusing in particular on the subprime market. Several of these cases have resulted in large monetary judgments, with courts collectively ordering that more than $320 million be returned to consumers.
That's the kind of enforcement record that really scares these scumballs off, isn't it? Does anyone know what percent of the entire industry's ad budget over the last ten years $320 million is? According to Mortgagedaily.com, projected mortgage [Ed. note: Duh!] advertising expenditures just for 2007 is $152 billion. The FTC isn't putting a very heavy "inaccuracy tax" on that.