The Federal Trade Commission said Tuesday that more than 200 companies have been warned about “potentially deceptive” mortgage advertisements.
The ads that received warnings were identified in June, with some of the offending ads in Spanish, an at-risk market that has been known to be taken advantage of in the mortgage industry.
“Many mortgage advertisers are making potentially deceptive claims about incredibly low rates and payments, without telling consumers the whole story,” Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection, said in a statement.
Advertisers were sent warning letters, and notified that ads on the Internet, in newspapers and magazines, sent through the mail, or transmitted through e-mail and fax machines “may violate federal law”.
I recently mentioned how select advertisers had changed verbiage in their ads as a result of the recent mortgage crisis.
For example, Lowermybills.com removed phrases such as “interest rates falling” as interest rates continued to rise, while LendingTree cut option arm and bad credit ads.
However, many advertisers continue to offer high-risk loans, including option arms that offer these very teaser rates which could land homeowners in hot water.
The Quicken Secure Advantage loan is still advertised on select websites, a pay-option arm that claims to “Lower your mortgage payment by over 50%!,” though it seems to have been pulled recently by Quicken Loans.