As a loan officer or mortgage broker, you know how important it is to comply with laws and regulations. Several necessary regulations affect mortgage marketing. Ensuring that your brochures, advertisements, and emails follow regulations is paramount.
Here are five regulations and restrictions to consider when designing your mortgage marketing strategy:
1. Mortgage Acts and Practices — Advertising
Otherwise known as Regulation N, this act governs advertising within the mortgage industry. It prohibits deceptive claims in mortgage advertising and other commercial communications. Examples of misleading claims include:
- Advertising a low fixed rate that is only applicable for a short period
- Failing to include significant loan terms, such as the length of the loan or type of loan
- Implying that the mortgage lender is part of a government agency when they are not
Mortgage lenders and brokers must be cautious not to use misleading advertising. Any brochures should be reviewed before sending them to potential customers.
2. Fair Housing and Equal Opportunity Act
The Fair Housing and Equal Opportunity Act prohibit discriminatory advertising practices. Mortgage ads may not result in bias according to age, nationality, or race.
Ads should be straightforward and present lending opportunities to anyone. There should be no preference given to certain classes of people. For example, an advertisement for an apartment cannot include the phrase “no children.” It also may not say “no wheelchairs” or anything else discriminatory.
3. Equal Credit Opportunity Act
The Equal Credit Opportunity Act requires loan approvals made based on creditworthiness. Thus, a lender cannot prevent someone from applying for a mortgage based on a factor such as age or race.
The act aims to ensure all people have access to mortgage loans based on their credit histories. If a mortgage lender advertises a specific loan, they can’t include language such as “no foreign applicants.”
4. Truth in Lending Act
The Truth in Lending Act applies to any advertisement designed to promote consumer credit. It contains two main points that apply to real estate credit.
First, an advertisement cannot promote lending terms that are not customary. If a down payment of 20% is required to buy a home, an ad cannot promote $1,000 down payments.
Second, financing rates must be visible. If a promotional interest rate applies for a few months, the annual rate must be in the same point size and typeface as the promotional rate.
5. Consumer Financial Protection Bureau (CFPB) Rules
The CFPB oversees the regulation of marketing materials for real estate lending. It often sends warnings and notifications when companies are breaching advertisement requirements. A recent sweep found lenders were sending ads with government stamps on them. The lenders have no affiliation with any government agency.
How a Mortgage CRM Can Help You
BNTouch offers a Mortgage CRM for those seeking to manage their advertising efforts. The CRM can help you remain compliant.
For a free demo, contact us today!