The Director of the Bureau of Consumer Protection for the Federal Trade Commission (FTC) told a U.S. Senate Committee this week that the FTC is currently investigating the advertising practices of dozens of mortgage companies, according to a transcript of the hearing.
Lydia Parnes, the Director of the division, also said her agency distributed 200 letters in 2007 to mortgage brokers, lenders and the media companies that are distributing advertising messages for the various mortgage lending platforms.
Parnes added in her testimony that “FTC staff recently reviewed the current advertising of those who received warning letters and will follow up with law enforcement where appropriate.”

Parnes told the panel that the FTC remains focused on doing what they can to protect borrowers from corrupt lending practices and cited the agency’s recent involvement in the mortgage lending business as evidence of its ongoing commitment to protecting consumers.
“In the past decade, the FTC has brought 22 actions focused on the mortgage lending industry, with particular attention to entities in the subprime market, alleging that mortgage lenders and servicers engaged in unfair or deceptive acts and practices,” Parnes added. “Through these cases, the FTC has returned more than $320 million to consumers. Many of these cases have challenged deceptive advertising and marketing practices.”
In her testimony, Parnes elaborated on the FTC’s recent involvement in the investigation of Bear Stearn’s subsidiary, EMC Mortgage Corp.
“Last month, The Bear Stearns Companies, Inc., disclosed that FTC staff has notified its mortgage servicing subsidiary, EMC Mortgage Corp., that the staff believes EMC and its parent Bear Stearns have violated a number of federal consumer protection statutes in connection with its servicing activities,” Parnes told the Committee. “Bear Stearns further disclosed that FTC staff offered an opportunity to resolve the matter through consent negotiations before seeking approval from the Commission to proceed with the filing of a complaint. According to disclosure, EMC expects to engage in such discussions with Commission staff.”