09/08/2024
Round of applause for the CFPB for taking action and protecting our service members.
This further highlights the importance of trusting who you work with for your mortgage needs. Not every solicitation you receive is honest or has your best interest in mind.
As a child of military parents, a spouse of an AD service member, and with more military friends than I can keep track of, I care deeply and passionately about our military homeowners. I will always work to provide the best service possible.
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CFPB Takes Action Against NewDay USA for Unlawfully Deceiving Servicemembers and Veterans Seeking Cash-out Refinance Loans
The Consumer Financial Protection Bureau (CFPB) recently took action against repeat offender New Day Financial, LLC (NewDay USA), ordering it to stop misrepresenting loan costs to borrowers and to pay a $2.25 million civil penalty to the CFPB’s victims relief fund for unlawfully deceiving active duty servicemembers and veterans seeking cash-out refinance loans.
The CFPB found that NewDay USA violated the Consumer Financial Protection Act of 2010 (CFPA). NewDay USA misled borrowers in North Carolina, Maine, and Minnesota about the costs of its cash-out refinance loans. Specifically, for the “new loan” payment amount listed on disclosures provided to consumers, NewDay USA included only the principal and interest payments. NewDay USA then presented a side-by-side comparison of the “new loan” payment amount with that of the “previous loan” payment amount, which included principal, interest, taxes, and insurance. This made NewDay USA cash-out refinance loans appear less expensive relative to consumers’ original mortgages, but for many consumers the refinanced loans were more expensive. These deceptive acts and practices are in violation of the CFPA.
Since at least 2015, NewDay USA has provided cash-out refinance loans to consumers, including veterans and active-duty servicemembers. In 2015, the CFPB took action against New Day Financial for paying illegal kickbacks and deceiving borrowers about a veterans’ organization’s endorsement of NewDay USA products.
Consumers who are eligible for redress do not have to do anything. NewDay USA will be contacting affected consumers about relief.
Read the consent order.
If you are having an issue with a financial product or service, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected]. To learn more about reporting potential industry misconduct, visit the CFPB’s website.
Thank you,
Consumer Financial Protection Bureau
