A mortgage lender located in Virginia, recently made headlines when it announced another round of major layoffs. According to reports from the Wall Street Journal, Delta Financial is looking to cut about 160 jobs in an effort to reduce costs. This move comes on the heels of Delta’s report that they posted a pre-tax loss of $34 million for the quarter ending December 31, 2019.
These are difficult times for Delta Financial, as the company is already dealing with the aftermath of settlements and fines that resulted from investigations by the Consumer Financial Protection Bureau (CFPB). In October 2018, the CFPB issued a press release announcing that the agency had reached a settlement with Delta Financial that required the lender to pay about $7 million in fines and refunds for engaging in various deceptive acts. The violations included failing to provide to consumers disclosures required by the Truth in Lending Act and deceiving consumers into taking out more expensive loans than they had qualified for.
The layoffs announced by Delta Financial come as the company is struggling to stay afloat and get back on track. The layoffs will affect both full-time and part-time employees across multiple divisions of the company. Unfortunately, this news likely won’t come as a surprise to many, as Delta has been dealing with financial issues for some time now.
This situation highlights the importance of consumer protection and vigilance when it comes to taking out mortgages. It’s important for consumers to be aware of their rights and to do their due diligence when considering a mortgage, as it can have a long-lasting impact on their finances.
The announcement of the layoffs and the pre-tax loss at Delta Financial serves as a reminder of the importance of consumer protection and vigilance when it comes to taking out mortgages. Delta Financial's troubles began in 2018 when the Consumer Financial Protection Bureau investigated and found that the lender was guilty of deceptive practices and failing to provide required disclosures to consumers under the Truth in Lending Act. As a result, the CFPB ordered Delta Financial to pay nearly seven million dollars in fines and refunds.
Now, with the added burden of these losses and the layoffs, Delta Financial is struggling to stay afloat. The pre-tax loss of 34 million and the elimination of 160 positions signify that Delta Financial is in a state of crisis. Unfortunately, today's news once again puts consumers at risk of being taken advantage of or misled when taking out a mortgage. This is why it is so important for consumers to be aware of their rights, research any potential lender, and understand what they're signing when they close on a loan.
It is clear that the events of the past year serve as a warning to all lenders and mortgage seekers alike: unethical and deceptive practices simply cannot be tolerated and consumer protection must be viewed as a priority in lending. For consumers, it is essential to do their research and take their time when deciding on a mortgage provider to ensure they are getting the most favorable terms possible and avoiding any potential scams or deceptive practices.
This article was contributed on Jul 12, 2023
