Remaining in Compliance With Advertising Guidelines By Jonathan Pinard & Bonnie Nachamie The purpose of advertising any product or service is not to sell the product per se, but to get the consumer to take action. From the dawn of advertising, deceptive or misleading advertising generated the most amounts of interest and activity. Advertising claims became so outrageous that congress formed the Federal Trade Commission (FTC) in 1914 with its primary focus to stop unfair methods of competition in commerce. The federal rules for advertising mortgage loans state that if an ad contains any of the triggering terms below, it requires that the amount of the downpayment, the terms of repayment and the annual percentage rate (APR) be disclosed: I I I I
Time Self-Management
The amount or percentage of a downpayment The number of payments or period of repayment The amount of any payment The amount of any finance charge
If an interest rate is stated, you must provide the APR in the same type size as the interest rate. Essentially, if you tell part of the story, you need to tell the rest of the story. Deceptive or misleading advertising The FTC, U.S. Department of Housing & Urban Development (HUD) and many State Banking Departments are focusing on Deceptive or Misleading Advertising, and from the recent settlements, you may be surprised by some of their interpretations. Here are some of the things mortgage companies have been cited for:
SEPTEMBER 2011
COLORADO MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
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I Using FINAL NOTICE OF RATE INCREASE and LOAN SERVICING DEPARTMENT instead of their company name in the area normally used for a return address. I Saying “Skip up to two mortgage payments” and “No out-of-pocket closing costs” in a mail solicitation. I Displaying a misleading Federal Housing Administration (FHA) seal in a manner that falsely represents that the mortgagee’s business services or products originate from HUD. Since Mortgagee Letter 2011-17 was issued on April 15, 2011, the use of the FHA-Approved Lending Institution logo must be accompanied by a conspicuous disclaimer that clearly informs the public that the mortgagee authoring the advertisement is not acting on behalf of or at the direction of HUD/FHA or the federal government. Even using the acronyms such as Ginnie Mae, FHA or HUD can lead to problems. In addition, mortgagees are now responsible for reviewing all advertisements generated by lead generators on behalf of their company for compliance with advertising requirements and all business names, aliases, and d/b/a’s used by FHA-approved mortgagees must be registered with HUD. Doing it right I Don’t include an interest rate or other triggering terms without including the necessary disclosures. I No advertisement may include language which deceives, defrauds or misrepresents loans terms, conditions or charges, including, but not limited to, the use of words indicating “Immediate Approval” or “Immediate Closing.” I Don’t make it appear that you are an exclusive provider of government loans or that your company is acting on the governments behalf. What should an advertisement contain? I In addition to the required disclosures, all advertisements and solicitations should prominently include the name and address of the originating entity, state licensing information and the company’s NMLS Identifying number. I When using pictures of applicants, make sure they are representative of the population as a whole. I Use the Equal Housing Lender or Equal Housing Opportunity Logo. I Add a disclaimer subject to credit approval. Advertising policy Advertising violations are costly. Protect your company by having a written advertising policy detailing the required components of an advertisement and the procedures that are required before an advertisement can be placed on behalf of the company. List an individual in management that must approve any ad before it is placed. Some states prohibit loan originators from advertising on their own and require that the company be listed on the advertising contract.
Jonathan Pinard is president and Bonnie Nachamie is chief executive officer of First National Compliance Solutions Inc. in Merrick, N.Y. Jonathan may be reached by phone at (800) 400-4134 or e-mail jp@firstnationalcompliance.com. Bonnie may be reached by phone at (800) 400-4134 or e-mail bn@firstnationalcompliance.com. SPONSORED EDITORIAL
Time is defined as a one-dimensional quantity used to sequence events, to quantify the duration of events and the intervals between them, and to quantify and measure the motions of objects and other changes. Whatever we choose to do each day, we have no control over time. Since the beginning, time has always been consistent. We might measure time in our own ways with a clock or by the sun, but how do we utilize and maximize the time that we’re provided each day? What exactly is time management and how do you manage the unmanageable? Well, it begins with managing yourself. I have always pushed the importance of “self-management” in business and how vital it is for any level of success. I have found that the ability to consistently manage and organize workflow with the limited time provided each day is not an easy task for anyone. Maximum productivity is a challenge that requires ongoing effort and the ability to adapt to change and workflow demands. Productivity at work is important simply because it’s the definition of getting anything done. Wasting time at work is not fair to your clients or your family. If time is spent on activities which are not productive, than it’s important to determine what they are. I believe our current climate for technology provides tools which can help increase productivity, but many which can also prohibit productivity if you allow. If you are able to maximize the time you have each day, you will have a better quality of life with less stress and much more success in business. Here are a few tips to help self-manage: Follow a schedule and have a plan. Have a plan each and every day. Create tasks or a “to do” list
“Don’t be fooled by the calendar. There are only as many days in the year as you make use of. One man gets only a week’s value out of a year, while another man gets a full year’s value out of a week.” —Charles Richards
each day with the most vital tasks highlighted. Check off tasks completed and move on to the next until you complete all tasks. Try to automate reminder alerts for those tasks that are consistent and especially for appointments and meetings. Time-block accordingly to get the most important tasks done first and those which have deadlines. Automate and prioritize marketing. If you are in a sales- or commission-based position than it’s important to have time to market and prospect every day. Automate any marketing possible, but spend quality time and focus with your clients and business partners. Delegate. This is one of the most challenging things for me, but also one of the most important I know I must follow. Trust in others and train well. Delegate tasks and get things off of your workload which do not require your full attention. Don’t put things off. We all have tasks we don’t enjoy, but need to get done. A delay of an hour turns into a day, into a week, etc. If you cannot delegate tasks, than just get it done to avoid that nagging reminder in the back of your brain. continued on page 23