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Mingus Mortgage Experts, a licensed mortgage broker in Texas, mailed thousands of solicitations to Texas residents as part of its advertising campaign. The mailers were sent to consumers with federally-insured loans and to consumers with adjustable-rate mortgages. The mailers offered the possibility of 0% interest, and many appeared to be from the federal government and the state of Texas. Only in the small print footnote did the Mingus Mortgage Experts disclose that the true purpose of the mailer was to solicit the recipient for a home loan. Additionally, there was no clear indication of who the broker was and no information about the broker’s license. The address provided in the small print was a P.O. Box and not the address on file with the Department.

The advertisements also featured first mortgages at 1% with no points and no fees. Regulators said that during one period where 91 loans were reviewed, only ten borrowers actually received the 1% rate. However, each of those ten borrowers ended up paying $10,000 in points and fees and 7.89% APR. In big, bold letters the mailer advertised “Instant Approval!”

Section 156.303 of the Residential Mortgage Loan Company and Residential Mortgage Loan Originator Licensing and Registration Act, Section 80.203 of the Residential Mortgage Loan Originator Regulations, and Section 81.203 of the Mortgage Banker Registration and Residential Mortgage Loan Originator Licensing Regulations specify certain requirements for advertising. Additionally, mortgage professionals are required to comply with the federal Truth-in-Lending Act and its advertising provisions (12 C.F.R. §§1026.16, 1026.24). When the Department of Savings and Mortgage Lending saw this ad, it provided notice that it intended to revoke the Mingus Mortgage Experts’ license to do business in Texas.