NewDay USA Fined $2.25 Million for Deceptive Lending

Company provided incomplete and misleading information to potential borrowers

A nonbank mortgage lender will pay a $2.25 million fine for deceptive and misleading practices that lured homeowners into cash-out refinance loans.

The Consumer Financial Protection Bureau (CFPB) ordered NewDay USA to pay the $2.25 million fine after an investigation found the company lured borrowers in multiple states to take out refinance loans by providing incomplete and misleading price comparisons. The information provided made NewDay loans appear cheaper than competitors, resulting in borrowers choosing a NewDay product. Once the loans were accepted, borrowers discovered that the actual terms made the loans more expensive.

“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.”

According to the CFPB, the victims of NewDay's fraud were primarily military families located in North Carolina, Maine, and Minnesota.

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