The ClearPath Lending lawsuit most people are searching for is the Consumer Financial Protection Bureau’s 2020 enforcement action, which ended in a consent order and a $625,000 civil penalty against the California mortgage company for sending deceptive VA loan mailers to veterans and servicemembers.1Consumer Financial Protection Bureau. ClearPath Lending, Inc. ClearPath consented to the order on September 14, 2020 without admitting or denying the Bureau’s findings, except as to jurisdiction.
What the Mailers Promised and What Borrowers Would Actually Get
The clearest example in the CFPB’s findings involved advertisements sent to roughly 260,000 consumers in late 2017. The mailers promoted a “fixed interest of 2.25% for the first three years and an APR of 3.17%.” The real APR was at least 3.516%, because the advertised figure left out required discount points and the current index for the loan’s variable-rate period.2Mortgage Professional America. Crackdown on Deceptive VA Lenders Continues
The same mailers displayed “NO Lender Fees” in bold. The CFPB said that claim was false: a borrower could not actually get the advertised loan without paying two discount points at closing.2Mortgage Professional America. Crackdown on Deceptive VA Lenders Continues
The Bureau also found that ClearPath labeled adjustable-rate mortgages as “fixed” without proper disclosures, advertised credit terms it was not prepared to offer, and failed to disclose repayment terms for the full life of the loan or that quoted payments excluded taxes and insurance.3Consumer Financial Protection Bureau. ClearPath Lending, Inc. Consent Order
Faking a Government Connection
A separate set of findings concerned how the mailers presented the sender. ClearPath used language, images, and design elements that suggested the company was affiliated with the Department of Veterans Affairs. Some pieces carried fabricated “VA Loan ID Numbers” and terms like “Benefit Allotment,” giving the impression that veterans were opening official government correspondence rather than a sales pitch.3Consumer Financial Protection Bureau. ClearPath Lending, Inc. Consent Order
Other mailers printed the name of the recipient’s current lender without clearly disclosing that ClearPath had no relationship with that lender.3Consumer Financial Protection Bureau. ClearPath Lending, Inc. Consent Order
Laws the CFPB Said ClearPath Broke
The consent order cited three overlapping federal rules: Regulation Z under the Truth in Lending Act, which governs how mortgage terms must be disclosed in advertising; the Mortgage Acts and Practices Advertising Rule (Regulation N), which prohibits misrepresenting rates, fees, government affiliation, and loan availability; and the Consumer Financial Protection Act’s broader prohibition on deceptive acts and practices in consumer financial services.3Consumer Financial Protection Bureau. ClearPath Lending, Inc. Consent Order
What the Order Required
Beyond the $625,000 civil money penalty, the order permanently bars ClearPath from misrepresenting material facts about its mortgage products, including costs, restrictions, and availability. It also prohibits the company from using language, images, or design features that falsely imply its advertisements come from the government or from a consumer’s current lender.3Consumer Financial Protection Bureau. ClearPath Lending, Inc. Consent Order
ClearPath was required to designate an Advertising Compliance Official, either a senior executive or someone reporting directly to the company’s board or president, to oversee ongoing compliance with the order.3Consumer Financial Protection Bureau. ClearPath Lending, Inc. Consent Order The CFPB’s enforcement page now lists the case status as “Expired/Terminated/Dismissed,” meaning the active enforcement period has concluded.1Consumer Financial Protection Bureau. ClearPath Lending, Inc.
Part of a Nine-Lender Sweep
ClearPath was not the only target. Between July and October 2020, the CFPB entered consent orders against nine mortgage companies for similar deceptive VA loan mailers. ClearPath’s $625,000 penalty was among the largest in the group; only Prime Choice Funding paid more, at $645,000.4Compliance Cohort. CFPB Issues Several Consent Orders The common pattern across the cases was direct mail that combined inflated or fabricated loan terms, fake government branding, and missing required disclosures.
Is ClearPath Still in Business?
Yes. ClearPath Lending, Inc. was founded in 2012, is incorporated in California, and operates out of Irvine. It remains an active mortgage lender focused on VA-guaranteed loans. At the time of the CFPB action the company was licensed in roughly 22 states; its licenses page now lists active mortgage lending, brokerage, or servicing licenses in about 29 states.5ClearPath Lending. ClearPath Lending Licenses1Consumer Financial Protection Bureau. ClearPath Lending, Inc.
The 2020 consent order is the only major public legal action tied to the company. No class action, private lawsuit, or separate state enforcement action against ClearPath appears in the record covered here.