CFPB Takes Action against Deceptive Mortgage Payment Program
Consumers who were misled into signing up for an interest reduction program may have a portion of their losses returned.
The Consumer Financial Protection Bureau (CFPB) filed a consent order today against Paymap Inc. and LoanCare LLC for promising its mortgage payment program would save tens of thousands of dollars in interest savings, but had no evidence to back up its claims. Under the terms of the orders, Paymap will return $33.4 million in fees to consumers and pay a $5 million civil penalty to the CFPB, and LoanCare will pay a $100,000 civil penalty.
Paymap Inc. is a Colorado-based payment processing company, and LoanCare Servicing is a Virginia-based residential mortgage servicer. Together, they marketed and provided the "Equity Accelerator Program"– an electronic payment system that enables consumers to make automatic mortgage payments via electronic debits from their bank accounts.
Consumers are typically charged an enrollment fee of $295 when signing up for the Equity Accelerator Program, and a transaction fee for each automatic debit that Paymap makes, typically $2.50. Since July 21, 2011, about 125,000 consumers enrolled in the Equity Accelerator Program and paid Paymap $33.4 million in fees.
Paymap and LoanCare advertised that consumers who enrolled in the Equity Accelerator Program would have a new, biweekly payoff schedule that would lead to significant interest savings because of the more frequent payments.
In fact, the Equity Accelerator Program did not make more frequent payments on consumers' mortgages. Although consumers made multiple payments, the company held the money in custodial accounts and paid the mortgage company according to the consumer's regular payment schedule. Consumers did achieve some interest savings through making higher monthly payments, but the additional fees often wiped out those savings.
Consumers were told that the average customer will achieve more than $33,000 in interest savings, but Paymap had no factual basis to support this claim and few customers actually achieved that amount of interest savings.
A copy of the consent order for Paymap is available at:http://files.consumerfinance.gov/f/201507_cfpb_consent-order_paymap.pdf
A copy of the consent order for LoanCare is available at:http://files.consumerfinance.gov/f/201507_cfpb_consent-order_loan-care.pdf
You can Buy A Car At the Dealership Like A Pro. Here's How You Can Be Prepared.
So you're finally ready to trade in your current car for a new one! Congratulations on such an important step. If you've never bought a new car before, you may know nothing about the process. To begin with, there are a number of things you should do to get ready to buy the car before you ever step on the dealership lot.
Can you Use Money That Is Mistakenly Deposited Into Your Account?
Have you ever noticed that your bank account somehow had 'extra' money in it even though you knew for a fact it wasn't yours? If so, you are not alone. It happens more often than you would think. All it takes is for a bank teller to type in one wrong number at the time a deposit is being made.
Low Interest Automotive Financing Might Not Be Best Deal After All
Great rates do exist. But even if you are offered a low interest car loan, you can probably save more money by accepting a slightly higher rate and using rebates or other incentives or by getting your own financing and taking the rebates and incentives.
Following These Tips Can Help You Save Your Hard-Earned Money at Tax Time
Many people feel like they just can't get ahead when it comes to money. What you may not know is that saving during tax season can start you on the path to financial security. We urge you to take advantage of tax season to prepare for unexpected emergencies or plan for the future. Here are some tips to help get started.