On February 27, 2023, the Consumer Financial Protection Bureau (Bureau) issued an order against RMK Financial Corp. (RMK), a California-based mortgage lender that also does business under the name Majestic Home Loans. RMK, which is licensed as a mortgage broker or lender in at least 30 states, originates consumer mortgages, including mortgages guaranteed by the Department of Veterans Affairs (VA) and mortgages insured by the Federal Housing Administration (FHA). The Bureau previously issued an order against RMK on April 8, 2015 (2015 Order). The Bureau’s 2015 Order was based on the Bureau’s finding that RMK disseminated numerous advertisements for mortgages that contained deceptive representations in violation of the Consumer Financial Protection Act of 2010 (CFPA) and the Mortgage Acts and Practices—Advertising Rule (Regulation N) or failed to include required disclosures in violation of the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z. These included advertisements that RMK sent to U.S. military servicemembers and veterans that used the names and logos of the VA and FHA in a way that falsely implied that the advertisements were sent by the VA or FHA and advertisements that misrepresented the loan’s terms. The 2015 Order required RMK to abide by a series of prohibitions against the types of misrepresentations and other violations the Bureau found in the 2015 Order. The Bureau found that, after the 2015 Consent Order went into effect, RMK disseminated millions of mortgage advertisements that made deceptive representations or contained inadequate or impermissible disclosures in violation of the 2015 Order, as well as the CFPA, Regulation N, and Regulation Z. These included, for example, advertisements that misrepresented that RMK was the VA or the FHA or that RMK was affiliated with the VA or the FHA, advertisements that misrepresented they were sent by the VA or FHA, advertisements that misrepresented that benefits available to those who qualified for VA or FHA loans were time limited, and advertisements that misrepresented the amount of the monthly payments for the advertised loan. Many of these advertisements reflected the same types of deceptive and other unlawful advertising practices that were the subject of the Bureau’s findings in the 2015 Order and expressly prohibited by the 2015 Order. This order permanently bans RMK from the mortgage lending business by permanently prohibiting RMK from engaging in any mortgage lending activities, 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 order also requires RMK to pay a $1 million civil money penalty.

Related documents

Consent Order

Stipulation

Press release

CFPB Shuts Down Mortgage Loan Business of RMK Financial for Repeat Offenses Against Military Families

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