Majestic Home Loans With Permanent CFPB Ban After Years of Military Fraud

The Consumer Financial Protection Bureau said Monday (Feb. 27) that it has permanently banned a California mortgage broker from the industry, citing years of abuse and fraudulent government representation to military families.

The CFPB’s announcement of its lifetime ban of RMK Financial’s Majestic Home Loans comes eight years after the government watchdog originally sanctioned the lender, which it said not only disseminated millions of fake mortgage advertisements that implied that it was affiliated with the Department of Veterans Affairs and the Federal Housing Administration by illegally using their logo to deceive unwitting consumers.

“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” said CFPB Director Rohit Chopra. “Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good,” Chopra added, noting that a $1 million fine levied against RMK will also be added to the CFPB’s victims relief fund.

As a result of this second and latest enforcement action by the CFPG, RMK will be required to exit the mortgage lending business while also being permanently banned from reentering it or engaging in any activities related to mortgage lending including “advertising, marketing, promoting, offering, providing, originating, administering, servicing, or selling mortgage loans, or otherwise participating in or receiving remuneration from mortgage lending, or assisting others in doing so.”

The RMK ban comes at a time when the CFPB is taking a more active — and arguably aggressive — stance towards questionable activity, including demands for more info on how credit card fees are levied and collected, as well as their oversight of non-banking institutions and how their overdraft and account fees are levied.

The agency says it is also focused on over $600 billion of insurance payments, many of which incur fees along each step of the process.

Last week, the CFPB reported that its latest survey of debt collections data shows a sharp rise in the percentage of consumers that are struggling to pay basic monthly bills. The study also found that nearly 75% of collections were for non-financial debt and balances that were less than $400, with medical collections still accounting for 60% of unpaid or bad debt.