Compliance and Marketing 2014: Safely Growing Your Business If you have ever done a significant amount of marketing, you have probably ran into or have heard of others running into problems with compliance (hoops to jump through to keep your marketing compliant). The mortgage industry and its marketing strategies are heavily regulated by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). These agencies were put in place to make sure consumers are not being taken advantage of by lenders or their marketing and with all the guideline changes in the mortgage industry, they are cracking down. Credit bureaus have paid hefty fines for allowing “pre-screened credit data” to fall into the wrong hands. Regulations are tightening up, and as a mortgage professional, it’s up to you to stay abreast of all these changes. We all want to earn a good living and grow our business. How can you stay current with all of these regulations?
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1. You can read the guidelines on the agency Web sites. 2. Make sure you work with a reputable marketing firm. This is key! There are lots of “marketing people” out there who don’t understand the guidelines. If they don’t know the rules, how can you expect them to be followed? 3. If you have a compliance department, use them! They have intimate knowledge of industry regulations and will make sure you don’t get into any hot water. 4. This is the most important of all … talk with your marketing company about it. If you use an outside marketing firm, you must absolutely take the time to talk with them and find out how much they know about the guidelines for the specific type of marketing that you do or are planning to do this year. Sure, it’s not their responsibility to make sure you follow the rules. But if you get into trouble, they will lose you as a client so any good company will always put your best interest first. We call it a win-win relationship. With the increase in oversight by the CFPB and FTC, consider the type of marketing that you’ve planned for the year. Does it involve telephone numbers? Will you be using “pre-screened credit data?” Do you know the guidelines for using such data? Lastly, just because these agencies are cracking down, it doesn’t mean that you cannot market! Whether you are writing FHA, VA, conventional or reverse mortgages … the mortgage industry is moving in the right direction again, and it’s important to stay ahead of your competition. Plan your growth, and find credible companies to work with. TagQuest customer spotlight Each month, we like to talk with our clients and find out how their campaigns are going. Here is what we heard from one of our mortgage professionals in Ohio. • 1,500 Mortgage Trigger Leads • 86 percent correct numbers • A 14.4 percent connect rate • Seven applications • Four closed loans • Two still in the pipeline • A total of $381.25 acquisition cost per closed loan to date —Josh J., Cleveland, Ohio Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing environments. For more information, call (866) 376-5540 or visit Tagquest.com. VIEW OUR MOST RECENT WEBINAR ON YOUTUBE Online readers please click on the link below, readers of the print edition, please copy the link and paste it into your browser. http://www.youtube.com/watch?v=coBEsmEVOgo
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the costly and unintended consequences of the Biggert-Waters Flood Insurance Reform Act, including huge premium spikes and impacts on the sale, construction and remodeling of homes across the nation. “As the leading advocate for home and property owners, NAR applauds this bill for the relief and protection it will bring to businesses and families nationwide, who are experiencing financial hardship because of the extreme and sudden premium increases,” said National Association of Realtors (NAR) President Steve Brown. “We believe this legislation will bring relief to property owners by ensuring a slow and steady phase in of risk-based increases. The legislation provides a more affordable rate structure for policyholders; repeals the requirement that flood insurance premiums increase immediately to full actuarial rates for homes that are sold; and restores “grandfathering” for properties that were paying premiums applicable to their initial flood risk rating, allowing owners to pay premiums based on the original risk zone rather than updated flood risk zones. “ICBA supports today’s Senate vote to approve this much-needed flood insurance legislation, and we urge President Obama to quickly sign it into law,” Independent Community Bankers of America (ICBA) President and CEO Camden R. Fine said. “The Homeowner Flood Insurance Affordability Act will help ensure that sharp rate hikes will not make flood insurance unaffordable for many policyholders who built to code and followed the law every step of the way. ICBA thanks lawmakers in both chambers for their efforts to stop these devastating rate increases for our stillrecovering housing market.” The bill also requires the Federal Emergency Management Agency’s remapping process to take into account local flood control structures and provides reimbursement for successful consumer map appeals. Further, it restores the “substantial improvement threshold” that triggers a higher flood insurance rate to the historic 50 percent level of a structure’s fair market value, which is important for many remodelers across the nation.
Four-Million Plus Renters Aspire to Own a Home Over the Next Year Millions of current renters nationwide aspire to buy a home in the next year, according to the inaugural edition of the Zillow Housing Confidence Index (ZHCI), suggesting strong demand among potential first-time homebuyers if market conditions are favorable. But existing headwinds, including tight inventory, rising mortgage interest rates
and growing affordability problems in a handful of areas, may make it difficult for potential buyers to follow through on those aspirations as the market enters the busy spring home shopping season. In 19 of the 20 large metro areas surveyed, more than five percent of all residents indicated they wanted to buy a home in the next year. Among current renters, homeownership aspirations were particularly strong, with about 10 percent of all renters nationwide saying they would like to buy within the next 12 months. The vast majority of these respondents also said they were confident or somewhat confident they could afford homeownership now. If all renters that indicated they wanted to buy actually did purchase a home in the next year, it would represent more than 4.2 million first-time home sales, more than double the roughly 2.1 million first-time home buyers in 2013. Homeownership aspirations among current renters were the highest in Miami, Atlanta and Las Vegas, three metro areas that were among the hardest-hit by the housing recession, according to the Zillow Homeownership Aspirations Index (ZHAI), a component of the broader ZHCI. But despite strong desires to own a home, market conditions remain mixed for potential buyers. While inventory is up nationally compared to a year ago (up 11.1 percent), it still remains well below optimal levels, and has fallen year-over-year in eight of the 20 metro areas surveyed by the ZHCI. Recent data from the Census Bureau also indicates that the share of new homes built as rental units has grown, while the share of new construction dedicated to the kinds of single-family homes likely to be favored by first-time buyers is down. Mortgage interest rates are also on the rise, currently standing at about 4.2 percent nationally, according to the Zillow Mortgage Marketplace, well above 2013 lows of roughly 3.3 percent. And as interest rates rise, homes in a number of particularly hot markets, including San Francisco, Los Angeles, San Jose and San Diego, are already looking unaffordable for buyers with lower incomes, especially first-time buyers, as more income is devoted to mortgage payments. “For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first-time homebuyers,” said Zillow Chief Economist Dr. Stan Humphries. “Even after a wrenching housing recession, this data shows that the dream of homeownership remains very much alive and well, even in those areas that were hardest hit. But these aspirations continued on page 85