CFPB Shuts Down Majestic Home Loans

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Owned by RMK Financial, the lender was shut down for repeated offenses, notably lying to military families applying for VA loans.

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) permanently banned RMK Financial Corporation, which does business as Majestic Home Loans.

In 2015, CFPB issued an agency order against RMK for, among other things, sending advertisements to military families that led the recipients to believe the company was affiliated with the United States government. Despite the 2015 order, the company engaged in a series of repeat offenses, including disseminating millions of mortgage advertisements to military families that deceptively used fake U.S. Department of Veterans Affairs (VA) seals, the Federal Housing Administration (FHA) logo, and other language or design elements to falsely imply that RMK was affiliated with the government, CFPB says.

In addition to the ban, RMK will also pay a $1 million penalty that will be deposited into the CFPB’s victims relief fund.

“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” said CFPB Director Rohit Chopra. “Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good.”

CFPB says the company sent millions of mortgage advertisements to military families with deceptive representations or contained inadequate or impermissible disclosures in violation of the 2015 order, the Consumer Financial Protection Act, the Mortgage Acts and Practices Advertising Rule, and the Truth in Lending Act.

CPFB allegations against RMK

  • Tricked military families about the government’s role in sending the advertisements or providing the loans: RMK sent advertisements that misrepresented that RMK was, or was affiliated with, the VA or the FHA.
  • Deceived borrowers about interest rates and key terms: RMK’s advertisements illegally disclosed a simple annual interest rate more conspicuously than the annual percentage rate, illegally advertised unavailable credit terms, and used the name of the homeowner’s current lender in a misleading way.
  • Falsely misrepresented loan requirements and lied about projected savings from refinancing: RMK’s advertisements misrepresented that the benefits available to those who qualified for VA or FHA loans were time limited. Additionally, RMK’s advertisements misrepresented that military families could obtain VA cash-out refinancing loans without an appraisal and without incurring the cost of an appraisal, that an appraisal was not a condition of qualifying for VA cash-out refinancing loans, and that no minimum credit score and no income verification were required to qualify for VA cash-out refinancing loans. Finally, RMK’s advertisements misrepresented the amount of monthly payments, the annual savings under the advertised loans, and the cash available in connection with the advertised loans.

Additional VA loan information

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

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