Advertising

Mortgage companies use many different marketing methods to drum up new business. Advertising and direct mail are two common methods. Depending upon where you are licensed, your state may dictate what you can and cannot say in your direct mail piece or in your commercial. Failing to include the required language or using language that has been banned can lead to fines, penalties or licensing problems.

Some states require identification language in every marketing piece such as Alabama’s and Illinois’ requirement that you state your company name (including assumed business names), your license number and whether you are a lender or broker. Other states demand that you include your office address, as well.

Some states require additional language that mortgage brokers must use to indicate that they are brokers and not bankers. In addition, Massachusetts prohibits brokers from stating that they will fund a mortgage loan.

Finally, certain types of language is prohibited. Terms such as “immediate closing” or “immediate approval” are suspect and “bad credit no problem” usually requires extensive disclaimers as to what limitations are placed on borrowers with credit issues.

Finally, there is the common prohibition against “false, misleading or deceptive statements.” What does that mean? If there is any question in your mind as to whether your advertising is misleading or deceptive, then you have a problem with the banking department. Any question will be resolved against you.

You must be in compliance with every state in which you are licensed. If you have ever seen a commercial for Ditech or Lending Tree, you see a full screen of advertising disclosures.