The Consumer Financial Protection Bureau (CFPB) has fined New Day Financial (NewDay USA) $2.25 million for problems related to active duty servicemembers and veterans seeking cash-out refinance loans.
New Day Financial is a nonbank direct mortgage lender headquartered in West Palm Beach, Florida, that specializes in offering mortgages guaranteed by the US Department of Veterans Affairs (VA). The company operates under the brand NewDay USA and has offered cash-out refinances since 2015.
According to the CFPB, NewDay USA gave “misleading and incomplete cost comparisons to borrowers refinancing in North Carolina, Maine, and Minnesota, which made the company’s loans appear less expensive relative to their existing mortgages.” NewDay USA originated at least 3,000 cash-out refinances in North Carolina and Maine through 2020 and Minnesota through 2018, and the CFPB noted most of these transactions included the misleading comparisons.
The civil penalty enacted upon NewDay USA will go the CFPB’s victims’ relief fund. The CFPB added it previously took action against New Day Financial in 2015 for “paying illegal kickbacks and deceiving borrowers about a veterans’ organization’s endorsement of NewDay USA products.”
“NewDay USA baited veterans and military families into cash-out refinance mortgages by hiding the true costs of these loans,” said CFPB Director Rohit Chopra. “NewDay USA’s misconduct has no place in the VA home loan program.”
NewDay Financial did not publicly comment on the CFPB’s action.
;
What about that, “it’s a noble cause, a labor of love” rubbish offered up with a tear in the eye and a crackling voice? Pathetic!!
NewDay’s misconduct has no place in the VA home loan program but they are not removed from the VA home loan program?
We refinanced our home with New Day and it was a very professional transaction with super competitive rates. As a Combat Veteran I can say you should consider them, be a bit wary of such a tainted agency as the CFPB, it has a poor record and reputation itself.
Many thanks to the CFPB for this; we need to be wary of automatically disapproving of everything linked to governmental intervention, even when it does good and important work.
Example(s) of what NewDay actually did would be helpful, so we can judge for ourselves if this is truely a bad player or yet another example of government meddling, and also to help us spot these things in our own transactions or our customer’s transactions. Anytime I see accusations these days without examples of what was done, I am skeptical.