2012 arizona mortgage lending internet advertising compliance

State and Federal Regulations Related

to Electronic Mortgage Advertising

2012

Arizona Internet Advertising Compliance

Websites and Blogs

Social Media

Email Marketing

Online Classified Advertisements

Common Types of Internet Advertising:

A mortgage broker must reasonably supervise the

activities of a loan originator who is licensed pursuant to

article 4 of this chapter and who is employed by the

mortgage broker. (A.R.S. §6-909. Q)

A mortgage banker must reasonably supervise the

activities of a loan originator who is licensed pursuant to

article 4 of this chapter and who is employed by the

mortgage banker. (A.R.S. §6-947. P)

Arizona Rules and Regulations

Mortgage Loan Originator Definition: (A.R.S. §6-

991.12) A person employed by a mortgage broker or

mortgage banker who either takes a residential

mortgage loan application for a mortgage broker or

mortgage banker or offers or negotiates terms of a

mortgage loan for compensation or in the expectation of

compensation.

A person shall not act as a mortgage broker, mortgage

banker or loan originator if the person is not licensed

pursuant to ARS 6-901, 6-941, or 6-991.

Arizona Rules and Regulations

Arizona Administrative Code:

Holds out to the public: (A.A.C. R20-4-102) …

advertising or otherwise informing the public that

mortgage banking loans, commercial mortgage loans,

or mortgage loans are made or negotiated at a location.

"Holds out to the public" includes listing a location on

business cards, stationery, brochures, rate lists, or other

promotional items. "Holds out to the public" does not

include a clearly identified home or mobile telephone

number on a business card or stationery.



Directly or indirectly makes, negotiates, or offers to make or negotiate" and

"Directly or indirectly making, negotiating, or offering to make or negotiate,"

as those phrases are used in A.R.S. §§ 6-901, 6-941, or 6-971, mean:

Providing consulting or advisory services in connection with a mortgage

loan transaction, mortgage banking loan transaction, or commercial

mortgage loan transaction;

To an investor, concerning the location or identity of potential borrowers,

regardless of whether the person providing consulting or advisory services

directly contacts any potential borrowers; or

To a borrower, concerning the location or identity of potential investors or

lenders.

Do you ask if your loan officers or other employees are paying for leads?

Do you even know where your employees get their leads?


Mortgage Loan Originator Prohibited Acts

A loan originator acting on the loan originator's own behalf shall not advertise any

solicitation of mortgage business. (A.R.S. § 6-991.02.3)

A loan originator shall not make a false promise or misrepresentation or conceal an

essential or material fact in the course of the mortgage broker or mortgage banker

business. (A.R.S. § 6-991.02.9) … false misleading deceptive

… rates, terms and conditions


Mortgage Loan Originator Prohibited Acts

A loan originator shall not advertise for mortgage business in any manner without all

of the following: (A.R.S. § 6-991.02.14)

(a) The name and license number of the employing mortgage broker,

mortgage banker or consumer lender.

(b) Approval of the employing mortgage broker, mortgage banker or

consumer lender.

(c) The Unique Identifier that the loan originator maintains with the nationwide

mortgage licensing system.

A person engaged in the mortgage business shall not advertise any false,

misleading or deceptive statement or representation with regard to the rates, terms

or conditions for a mortgage loan. (A.R.S. § 6-947.D)



Recordkeeping Requirements (A.A.C. R20-4-917 &

R20-4-1806) In addition to any statutory requirement

regarding records, a record maintained by a mortgage

broker/banker shall include … samples of every piece of

advertising relating to the mortgage broker's/banker’s

business in Arizona.


Arizona’s Fraudulent Practices Act (ARS § 44-1481.)

A person is guilty of a class 3 misdemeanor who:

1. Knowingly and with the intent to sell to the public real or personal

property or services, or to induce the public to acquire an interest

therein, makes and publishes an advertisement, either printed or by

public outcry or proclamation, or otherwise, containing any false,

fraudulent, deceptive or misleading representations in respect to

such property or services, or the manner of its sale or distribution.

2. Publishes, circulates or disseminates any statement or assertion

of fact concerning real estate which is known by him to be untrue,

and which is made or disseminated with the intention of misleading.


Arizona’s Trade and Commerce Laws Pertaining to Loan

Information and Solicitations (ARS 44-1799.51.)

A. A person shall not reference the trade name or trademark of a lender or a trade

name or trademark confusingly similar to that of a lender in a solicitation for the

offering of services or products without the consent of the lender unless the

solicitation clearly and conspicuously states all of the following in close proximity to

and in the same or larger point type as the first and the most prominent use of a

lender's trade name or trademark in the solicitation:

1. The name, address and telephone number of the person making the solicitation.

2. That the person making the solicitation is not affiliated with the lender.

3. That the solicitation is not authorized or sponsored by the lender.

4. That the loan information referenced was not provided by the lender.




B. A person shall not reference a loan number, loan amount or other specific loan

information that is not publicly available in a solicitation for the purchase of services

or products, except that this prohibition does not apply to communications by a

lender or its affiliates with a current customer of the lender or with a person who was

a customer of the lender during the eighteen months immediately preceding the

solicitation.




C. A person shall not reference a loan number, loan amount or other specific loan

information that is publicly available in a solicitation for the purchase of services or

products unless the communication clearly and conspicuously states all of the

following in close proximity to and in the same or larger point type as the first and

the most prominent use of a loan number, loan amount or other specific loan

information that is publicly available in the solicitation:

1. The name, address and telephone number of the person making the solicitation.

2. That the person making the solicitation is not affiliated with the lender.

3. That the solicitation is not authorized or sponsored by the lender.

4. That the loan information referenced was not provided by the lender.




D. Subsection C does not apply to communications by a lender or its affiliates with a

current customer of the lender or with a person who was a customer of the lender

during the eighteen months immediately preceding the solicitation.

E. A person shall not use the name of a lender or a name similar to that of a lender

in a solicitation directed to consumers if that use could cause a reasonable person

to be confused, mistaken or deceived as to either of the following:

1. The lender's sponsorship, affiliation, connection or association with the person

using the name.

2. The lender's approval or endorsement of the person using the name or the

person's services or products.




F. Any reference to an existing lender, a loan number, loan amount or other specific

loan information that appears on the outside of an envelope, that is visible through

the envelope window, or that appears on a postcard in connection with any written

communication that includes or contains a solicitation for goods or services is

prohibited without the consent of the existing lender.

G. It is not a violation of this section for a person to use the trade name of another

lender in an advertisement for services or products to compare the services or

products offered by the other lender.




H. A lender or owner of a trade name or trademark may seek an injunction against a

person who violates this section to stop the unlawful use of the trade name,

trademark or loan information. The person seeking the injunction shall not have to

prove actual damage as a result of the violation. Irreparable harm and interim harm

to the lender or owner shall be presumed. The lender or owner seeking the

injunction may seek to recover actual damages and any profits the defendant has

accrued as a result of the violation. The prevailing party in any action brought

pursuant to this section is entitled to recover costs associated with the action and

reasonable attorney fees from the other party.

I. For the purposes of this section, "lender" means a bank, national bank doing

business in this state, industrial bank, savings and loan association, savings bank,

credit union, finance company, mortgage bank, mortgage broker, loan originator or

holder of the loan or other person who makes loans in this state and any affiliate, or

any third party operating with the consent of the lender.



Role of the Consumer Financial Protection Bureau

• The Dodd-Frank Act establishes an Office of Fair Lending

and Equal Opportunity within the Consumer Financial

Protection Bureau (CFPB) to be responsible for this.

• This Office is intended to:

– Provide oversight and enforcement of federal laws to ensure

fair, equitable, and nondiscriminatory access to credit.

– Coordinate fair lending efforts with other federal and state

regulators.

– Provide annual reports.

• List of CFPB Inherited Regulations http://www.consumerfinance.gov/regulations


Rob Chrisman's comments are below. http://www.robchrisman.com/

August 3, 2012

Well, this was bound to happen. I was contacted by a non-bank lender,

doing less than $50 million per month, who is about to be audited by

the CFPB. It reminded me of something this commentary has written about

several times: if you think you're not going to be audited by the CFPB,

you're most likely incorrect. Management asked me if I knew of anyone

they could speak with, who has been through this, or is going through a

CFPB audit, on an informal basis about advice. So if that description fits,

and you don't mind sharing information, let me know and I'll put you in

touch. Or, if you'd like me to publish some anonymous comments in the

commentary about what it was like, shoot me an e-mail. (I wish I had the

technological savvy to set up an "Audited by the CFPB" user's group.)


July 31, 2012

Non-bank lenders are often confused as to whether or not they will be subjected to CFPB scrutiny.

They will be, just as several non-banks are being audited. The Consumer Financial Protection Bureau’s

Office of Fair Lending and Equal Opportunity released expectations for non-banks concerning compliance

with fair lending and unfair, deceptive, or abusive acts or practices ("UDAAP") laws. The Bureau intends to

create a level playing field between banks and non-banks, but CFPB representatives have indicated that

they understand that fair lending programs take time to develop and that they will need to help educate

executive and senior management at non-banks concerning the importance of fair lending laws and the risks

of non-compliance. As a result, the CFPB does not expect to find fully developed and implemented fair

lending programs in place at non-banks during the initial examination cycle and recognizes that such

programs will evolve. Nonetheless, non-banks will be expected to quickly develop and maintain fair lending

programs that are comparable to those at banks. Similarly, it is expected that UDAAP programs will evolve

for both banks and non-banks as the CFPB continues to define "abusive" practices through examinations

and enforcement actions. Fair lending risk assessments will continue to be required for banks and are

expected for non-banks. One issue that continues to garner discussion among both banks and non-banks is

the presence of enforcement attorneys in examination meetings throughout the examination process. The

Bureau understands that both banks and non-banks will want to have their attorneys present if

CFPB enforcement attorneys attend compliance examination meetings. The CFPB would not object to

the presence of in-house or outside counsel for financial institutions at these meetings so long as such

attorneys are not acting in a manner that obstructs the examination process reports law firm

BuckleySandler LLP.


• What is fair lending?

• The Dodd-Frank Wall Street Reform and

Consumer Protection Act establishes the

definition of fair lending as:

– “The fair, equitable, and nondiscriminatory

access to credit for consumers.”

• Read the Article “Mortgage Lenders Brace

for Their CFPB Exams”

• http://tbwsdailyshow.com/2012/11/21/cfpb-

on-war-path/

http://tbwsdailyshow.com/2012/11/21/cfpb-on-war-path/

ECOA: Prohibited Practices

Protected Classes

ECOA: Enforcement by CFPB

• There is also evidence that the CFPB will test for

evidence of:

– “disparate impact.”

• Disparate impact refers to when a law that isn’t

discriminatory on its face value has a greater impact on a

minority group than it has on other groups.

ECOA: Examination Procedures

Supervision Examination Manual p. 78

ECOA Enforcement/Violations

• The Consumer Finance Protection Bureau (CFPB) enforces the Equal Credit Opportunity Act (ECOA).

• Failure to comply with the Equal Credit Opportunity Act's Regulation B can subject a financial institution to civil liability for actual and punitive damages in individual or class actions.

• Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1% of the creditor’s net worth in class actions.

Reg N: Mortgage Acts and Practices - Advertising

• … issued by the Bureau of Consumer Financial Protection to implement the 2009 Omnibus Appropriations Act, Public L. 111-8, section 626, 123 Stat. 524 (Mar. 11, 2009), as amended by the Credit Card Accountability Responsibility and Disclosure Act of 2009, Public Law 111-24, section 511, 123 Stat. 1734 (May 22, 2009), and as amended by the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010, Public Law 111-203, section 1097, 124 Stat. 1376 (July 21, 2010).

• This part applies to persons over which the Federal Trade Commission has jurisdiction under the Federal Trade Commission Act.

• Refer to Prohibited Representations http://bit.ly/YmPH7k

Reg X: RESPA

• Section 8: Kickbacks, Fee-Splitting, Unearned Fees– Any person that gives or receives anything of value (payments,

commissions, fees, gifts or special privileges) for the referral of settlement business is in violation of Section 8 of RESPA. Payments in excess of the reasonable value of goods provided or services rendered are considered unearned fees.

For example: Joint Advertising requires the payment based on prorated use.

Reg X: RESPA

• Examination Procedures:


Reg Z: Truth in Lending - Closed-End Advertising

• Advertising Accurate and Balanced Information

About Rates, Payments and Other Loan

• Annual Percentage Rate

• Triggering Terms Requiring Disclosure

– The amount of the down payment

– The amount of any payment

– The number of payments

– The period of repayment

– The amount of any finance charge


Required Advertising Disclosures

• If any triggering terms are used in an ad, all of these

disclosures must be made:

– Amount or percentage of down payment

– Terms of repayment

– APR (spelled out in full); if the note rate may

increase (e.g., ARMs), that fact must also be

disclosed

• If an ad discloses on the APR, the additional

disclosures are not required

• TILA Disclosures must be “clear and conspicuous”


Seven Prohibited Deceptive or Misleading Acts or Practices in Advertising


Unfair, Deceptive, or Abusive Acts or Practices

CFPB has supervisory authority for detecting and assessing risks to consumers and to

markets for consumer financial products and services.

a. Examination procedures to identify the risks of harm to consumers

b. These examination procedures provide general guidance on:

(1) The principles of unfairness, deception, and abuse in the context of offering and providing

consumer financial products and services;

(2) Assessing the risk that an institution's practices may be unfair, deceptive, or abusive;

(3) Identifying unfair, deceptive or abusive acts or practices (including by providing examples

of potentially unfair or deceptive acts and practices); and

(4) Understanding the interplay between unfair, deceptive, or abusive acts or practices and

other consumer protection statutes.

Unfair, Deceptive, or Abusive Acts or Practices

See UDAAP Section of “Preparing for a CFPB Examination”

See Examination Manual p. 57


Fair Housing Act: Purpose

• The federal Fair Housing Act prohibits

discrimination:

– In advertising, real estate brokerage, lending,

or any services associated with residential

transactions.

– Against individuals who associate with persons

in these protected classes.

– Against U.S. citizens and non-citizens.

42 U.S.C. 3601-3619

Federal Fair Housing Legislation

A. Fair and equitable treatment in housing and real estate transactions is a right by law.

The Fair Housing Act was passed on April 11, 1969

It shall be unlawful, because of race, color, religion, sex, handicap, familial status, or national origin, to restrict or attempt to restrict the choices of a person by word or conduct in connection with seeking, negotiating for, buying or renting a dwelling so as to perpetuate, or tend to perpetuate, segregated housing patterns, or to discourage or obstruct choices in a community, neighborhood or development. (24 CFR Part 14, Section 100.70(a)).

Federal Fair Housing Act or Title VIII

of the Civil Rights Act of 1968A. Prohibits discrimination based on:

1. Race

2. Color

3. Religion

4. Sex

5. National origin

6. Disability

7. Familial status

B. Covers all housing transactions and services including advertising, rentals, sales, lending, and insurance, as well as harassment.

C. Prohibits using discriminatory advertising or any other notice that indicates a limitation or preference or intent to make any limitation, preference, or discrimination.

Fair Housing in Advertising

A. Real estate advertising should take steps to ensure that advertising that they publish does not convey a message of preference for or against any protected group, whether through words, pictures or other images.

Fair housing law prohibits not only real estate advertising that is explicitly discriminatory, i.e. “for whites only,” but also advertising which uses indirect means, such as words, cues, or photos to convey a discriminatory message (i.e. advertising which uses only white models).


B. Use of Words, Phrases or Symbols

1.The use of words, phrases, and symbols to convey overt or implicit discriminatory preferences or limitations is prohibited.

As a real estate advertiser it is important that one understand that the law prohibits not only advertisements that express a preference against certain homeseekers, i.e. blacks or children, but also those that express a preference for a particular type of person, i.e. “Jewish tenants sought” or “ideal for female tenant”. Both types of advertisements may indicate a “preference, limitation or discrimination” based on a protected class.


a. words descriptive of dwelling, landlords and tenants - White private home, Colored home, Jewish home, Hispanic residence, adult building.

b. words indicative of a protected class

(1) Race – Black, Caucasian, Asian, American Indian.

(2) Color – White, Black, Colored

(3) Religion – Protestant, Christian, Catholic, Jew.

(4) National origin – Mexican American, Puerto Rican, Philippine, Polish, Hungarian, Irish, Italian, Chicano, African, Hispanic, Chinese, Indian, Latino.


words indicative of a protected class

(5) Sex – the exclusive use of words in advertisements stating or tending to imply that the housing being advertised is available to persons of only one sex and not the other, except where the sharing of living areas is involved.

(6) Disabled – physically impaired, blind, deaf, mentally ill, physically fit. Nothing in this part restricts the inclusion of information about the availability of accessible housing in advertising of dwellings.

(7) Familial status – adults, children, singles, mature persons. Nothing in this part restricts advertisements of dwellings which are intended and operated for occupancy by older persons and which constitute housing for older persons.


c. catchwords - words and phrases used in a discriminatory context should be avoided. (e.g. restricted, exclusive, private, integrated)

Catchwords convey preferences for one group over another or send signals about a community's makeup.

d. symbols and logotypes which imply a protected class


e. colloquialisms - words or phrases used regionally or locally that seeks to imitate informal speech which imply or suggest a protected class

Colloquialisms or colloquial language is considered to be characteristic of or only appropriate for casual, ordinary, familiar, or informal conversation rather than formal speech or writing.

Slang or Dialect

http://www.facebook.com/note.php?note_id=117545201594184


f. directions to real estate for sale or rent that imply discriminatory preference, limitation or exclusion.

For example, references to real estate location made in terms of racial or national origin significant landmarks, such as an existing black development (signal to blacks) or an existing development known for its exclusion of minorities (signal to whites). Specific directions which make reference to a racial or national origin significant area may indicate a preference. References to a synagogue, congregation or parish may also indicate a religious preference.

g. area or location description - using the names of facilities which cater to a particular racial, national origin or religious group, such as country club or private school designations, or names of facilities which are used exclusively by one sex may indicate a preference.

Appendix I: 1995 HUD Memorandum, Guidance Regarding Advertisements Under §804(c) of the Fair Housing Act

Human Model Advertising

1. Real estate advertising including photos or drawings may not be used to indicate exclusiveness.

2. Should be clearly definable as reasonably representing majority and minority groups in the metropolitan area, both sexes, and when appropriate, families with children.

3. Should portray persons in equal social settings and indicate to the general public that the housing is open to all without regard to race, color, religion, sex, handicap (disability) familial status or national origin, and is not for the exclusive use of one such group.

Equal Housing Opportunity Symbols

1. All advertising for the sale, rental, or financing of housing should contain an equal housing opportunity logo, statement or slogan.

2. Logo or statement should be a part of each advertisement and should be placed in visible location and be a comparable size of other symbols or text used in the advertisement.

3. Applicable to advertisement for sale, rental and financing of housing.

Print Media Publishers Are Liable for Discriminatory Advertising

A. United States v. Hunter, 459 F.2d 205 (4th Cir. 1972) cert denied, 409 U.S. 934 (1972):

1. Court ruled that congress intended for the Fair Housing Act to apply to publishers for placing discriminatory advertisements, as the widespread appearance of discriminatory advertisements may have a harmful effect on the general aims of the Act.

B. Ragin v. The New York Times Co., 923 F.2d 995 (2d Cir.), cert. denied, 502 U.S. 821 (1991):

1. The New York Times, a publisher, was found in violation of the Fair Housing Act for the longstanding practice of allowing the publication of advertisements using "human models" that did not reasonably represent the percentage of blacks and other minorities in the New York City metropolitan area. The ruling showed that a plaintiff alleging discrimination need not establish that the defendant intended to express a racial preference in the ad.

Fair Housing Application to Internet Advertising

D. Position held by HUD

1. 2006 HUD Memorandum, Fair Housing Act Application to Internet Advertising (seeAppendix II)

a. "Just as the Department has found newspapers in violation of the Fair Housing Act for publishing discriminatory classifieds, the Department has concluded that it is illegal for Web sites to publish discriminatory advertisements."


E. Online Housing Providers Challenge to the Fair Housing Act1. Online housing providers claim that they are exempt from liability

under the Fair Housing Act.

F. Communications Decency Act (CDA), 47 U.S.C § 2301. Intended to protect families from online pornography and other forms

of indecency.

2. States that the operators of Internet services are not to be construed as publishers, and thus are not legally liable for the words of third parties who use their services.

3. The CDA makes exceptions to this rule as it relates to federal criminal statutes and intellectual property law, but does not make explicit exceptions for the Fair Housing Act.


G. Court Decisions Regarding Online Housing

Providers

1. Two recent major court decisions have ruled in favor of

online housing providers.

2. Chicago Lawyers' Committee for Civil Rights Under Law

v. Craigslist, 519 F.3d 666 (7th

Cir. 2008)

a. The court ruled that the CDA protects online information systems

from being treated as the publisher or speaker of any information

provided by a third party, including discriminatory housing

advertisements.


G. Court Decisions Regarding Online Housing

Providers

3. Fair Housing Council v. Roommates.com, 521 F.3d 1157

(9th Cir. 2008)

a. The court ruled that an online housing provider could be held

liable under the Fair Housing Act for drafting and publishing

questionnaires that required members to answer questions that

potentially enabled other members to discriminate against them.

b. However, the court also ruled that a web service operator is

provided immunity as a publisher within the meaning of the CDA,

when it publishes the comments as written by a third party.

Website or Blog Disclaimer

Fair Housing Notice

All websites should print a notice that they

will not knowingly accept advertising that

violates fair housing laws. This notice may

also include statements regarding the

coverage of any local or state fair housing

law as well as the federal fair housing laws.

Ex. http://www.craigslist.org/about/FHA

8 HR Comprehensive Compliance in Action March 2012

Enforcement

• The United States Department of Housing and

Urban Development (HUD) is the federal agency

responsible for administering and enforcing the Fair

Housing Act.

• The Office of Fair Housing and Equal

Opportunity (FHEO) handles enforcement

activities and establishes policies for compliance.

• According to the Office of Fair Housing and

Equal Opportunity:

– “Equal access to rental housing and home ownership

opportunities is the cornerstone of this nation’s federal

housing policy.”

8 HR Comprehensive Compliance in Action March 2012

Penalties for Violations

• Violation of fair housing laws may result in:

– Suspension or revocation of a license.

– Punitive damages.

– Compensatory damages.

– Injunctions ordered by a court of law.

Use of HUD/FHA Logo, Name

and Acronym in Advertising• Mortgagee Letter 2011-17

• April 15, 2011

This Mortgagee Letter communicates requirements to mortgagees regarding

the use of the official logos, names and acronyms of the U.S. Department

ofHousing and Urban Development (HUD or the Department) and the

Federal Housing Administration (FHA) within devices used to advertise or

promote the business products or operations of FHA-approved

mortgagees.

… a “Device” constitutes a channel or instrument for soliciting, promoting or

advertising FHA products or programs.


and Acronym in AdvertisingUnder §§ 202 and 536 of the National Housing Act (NHA),

HUD may impose sanctions, including civil money penalties,

for misuse of the terms

• “Federal Housing Administration,”

• “Department of Housing and Urban Development,”

• “Government National Mortgage Association,”

• “Ginnie Mae,”

• the acronyms “HUD,” “FHA,” or “GNMA,”

• or any official seal or logo of the Department of Housing and

Urban Development.

Use of FHA Logos

FHA-approved mortgagees may display the official FHA Approved Lending

Institution logos on a Device for the purpose of describing … the types of loan

products offered by the mortgagee.

… must be displayed in a discreet manner.

… must, in each instance, be accompanied by a conspicuous disclaimer that

clearly informs the public that the mortgagee authoring the Device is not acting on

behalf of or at the direction of HUD/FHA or the Federal government.

The disclaimer should be prominently displayed in a location proximate to where the

FHA Approved Lending Institution logo(s) is displayed.

Official FHA Approved Lending

Institution Logos

Use of FHA Logos

FHA-approved mortgagees may display the official FHA Approved Lending

Institution logos on a Device for the purpose of describing … the types of loan

products offered by the mortgagee.

… must be displayed in a discreet manner.

… must, in each instance, be accompanied by a conspicuous disclaimer that

clearly informs the public that the mortgagee authoring the Device is not acting on

behalf of or at the direction of HUD/FHA or the Federal government.

The disclaimer should be prominently displayed in a location proximate to where

the FHA Approved Lending Institution logo(s) is displayed.

Use of FHA Logos

The Device, when taken as a whole, shall emphasize the HUD-registered

business name, alias or d/b/a of the mortgagee and not the Federal government.

… the Device shall be written, formatted and structured in a manner which clearly

identifies the mortgagee as the sole author and originator of the Device.

Specifically, the Device should reflect

the mortgagee’s name,

location

and appropriate contact information.

Use of FHA Logos

… strictly prohibited from displaying the official FHA Approved

Lending Institution logo(s) in a location or manner within a

Device that creates the false impression that the Device is an

official government form, notice or document or that

otherwise conveys the false impression that the

Device is authored, approved, or endorsed by the

Department or FHA.

Furthermore, alteration or modification of the FHA Approved

Lending Institution logo(s) is strictly prohibited.

** If you’re not FHA approved, you can’t use any of the logos **

Use of FHA Logos

Moreover, use of the FHA logo is strictly prohibited. No person,

party, company, or firm, including FHA-approved mortgagees,

may use the FHA logo.

= BAD!

Use of HUD Seal

FHA-approved mortgagees, non FHA-approved mortgagees

and Third Party Originators are not permitted to display the

official HUD seal or any other insignia that imitates an official

Federal seal on any Device.

= BAD!

Use of HUD/FHA Names and

AcronymsFHA-approved mortgagees may not purport or imply that as a result of their

approval to participate in FHA programs that their business products or

services are coming directly from HUD or FHA.

The use of the words “federal,” “government,” “national,” “U.S.

Department of Housing and Urban Development,” “Federal Housing

Administration,” and/or the letters “HUD” or “FHA”

… in a manner that falsely represents that the mortgagee’s business

services or products originate from HUD, FHA, the Government of the

United States, or any Federal, State or local government agency is strictly

prohibited.


and Acronym in AdvertisingMust retain copies of any Device related to FHA programs for a two years.

Failure to follow HUD/FHA requirements as outlined in this Mortgagee

Letter may result in sanctions, including civil money penalties or

administrative action against any person, party, company, firm, partnership

or business, including non FHA-approved institutions and individuals.

FTC Policy Statement on Deception

– An ad is deceptive if it contains a statement – or omits

information – that

• is likely to mislead consumers acting reasonably under the

circumstances or

• is material to a consumer’s decision …

– Practices related to mortgage ads that have been found

to be misleading or deceptive include:

• False representations or omissions

• Misleading price claims

• Use of bait and switch techniques

• Failure to perform promised services

http://www.ftc.gov/bcp/policystmt/ad-decept.htm

FTC Policy Statement on Unfairness

• An ad is unfair if:

– It causes, or is likely to cause, substantial consumer

injury which a consumer could not possibly avoid; and,

– It is not outweighed by the benefit to consumers.

• For an injury to be considered unfair, it must be

substantial and in most cases involves monetary

harm.

• Also, could the consumer have reasonably avoided

injury?

• Ex. predatory lending schemes

http://www.ftc.gov/bcp/policystmt/ad-unfair.htm

Questions to Consider

• Does your advertising make your customers satisfied

that they do business with you?

• Are you avoiding impossible promises and

guarantees?

• Are your advertised programs readily available?

• Do you mean to sell what you advertise?

• Do your ads avoid misleading inferences?

• Do your advertised terms agree with the facts?

• Is your advertising easy to understand without asterisks

and fine print?

• Do you believe your own comparatives?

Clear and Conspicuous

• FTC Dot Com Disclosure provides guidance

on making disclosures clear and

conspicuous.

• placement and proximity are critical.

– Place disclosures near, and when possible, on

the same screen as triggering claim.

– Use text or visual cues to encourage consumers

to scroll down when it is necessary to view a

disclosure.


– If using hyperlinks to lead to disclosures, make

the link obvious, label the hyperlink

appropriately to convey the importance of the

information it leads to, and take consumers

directly to the disclosure.

– Note: burying disclosures in a link probably will

not meet the letter of the law.


– Prominently display disclosures so they are

noticeable to consumers, and evaluate the size,

color and graphic treatment of the disclosure in

relation to other parts of the page.

– Review the entire ad to ensure that other

elements – text, graphics, hyperlinks or sound –

do not distract consumers’ attention from the

disclosure.

– Repeat disclosures – as needed – on lengthy

websites and in connection with repeated claims.


– Repeat disclosures – as needed – on lengthy

websites and in connection with repeated claims.

– Display visual disclosures for a duration

sufficient for consumers to notice, read and

understand them.

– Use clear language and syntax so that

consumers understand the disclosures.

Things to Consider

– Email correspondence

– Websites

» Blog correspondence (posts and comments)

» Links to 3rd Party Sites

– Real Estate Advice Online Services

» Zillow Advice, Trulia Advice. Yahoo! Answers,

LinkedIn Answers

– Interaction in online communities and social media

platforms

» Facebook

» Twitter