One Pennsylvania-based home building company has found itself in trouble with the Federal Trade Commission over the home financing programs it offered to customers. The company apparently offered mortgage packages that contained a number of hidden fees. The company apparently also did not disclose information concerning the costs of the mortgages such as annual percentage rates.
The group advertised that customers would not need to pay a down payment while financing their homes. However, customers were required to make a "good faith deposit" and also pay an annual fee with settlement costs. There were also specific requirements that consumers would have to meet before they could qualify for certain mortgages.
It is alleged that the group violated a number of laws such as the Federal Trade Commission Act and the Truth in Lending Act. The company in settling the matter with the FTC is now forbidden from misrepresenting a variety of terms, facts and conditions. The settlement also requires the company disclose specific information.
The FTC is allowed under federal rules to assess significant civil penalties regarding deceptive claims. In this matter the assessed penalty will become due if it at some point is determined that the company provided the FTC with false information.
There are attorneys that can represent individuals in consumer protection claims against companies that have profited through deceptive practices. There are federal and state laws in place to protect consumers. However, many consumers may not understand all of their legal rights and may need legal assistance. If these companies are not held accountable the deceptive practices will likely continue.
Source: Insurance News, "Pennsylvania Home Builder Settles FTC Charges of Deceptive Mortgage Advertising," June 11, 2014