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HUD Issues New Advertising Requirements, Use of Official Seal Prohibited

A mortgagee letter published April 15 by the Department of Housing and Urban Development specifies new guidelines for use of the agency’s logo, name and acronym in advertising materials for Federal Housing Administration approved mortgagees, including prohibitions for third party originators.

The ML 2011-17 states that FHA-approved mortgagees may display the official FHA Approved Lending Institution logos for describing and illustrating the types of loan products the mortgagee offers, “in a discreet manner.” Use of the FHA Approved Lending Institution logo must be accompanied by a conspicuous disclaimer that clearly informs the public that the mortgagee is not acting on behalf of ar at the direction of HUD/FHA or the Federal government. The disclaimer should be prominently displayed with the FHA Approved Lending Institution logo.

Further, the ML prohibits use of the official FHA logo. “Use of the FHA logo is strictly prohibited. No person, party, company, or firm, including FHA-approved mortgagees, may use the FHA logo,” the letter states.

With regard to the HUD seal, the letter specifies that 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 advertising channels.

“FHA-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 letter states. The guidance details use of terms that may not falsely represent that the mortgagee’s business or services originate from HUD, FHA, federal or state governments.

Finally, the letter states that third party originators, including those who were previously approved, may no longer use the FHA Approved Lending Institution logo(s) on any materials. “No previously FHA-approved loan correspondent, nor any third party originator sponsored by an FHA-approved mortgagee, shall engage in any activity or author or distribute any device that falsely advertises, represents or otherwise conveys the impression that the company’s business operations, products or services either originate from or are expressly endorsed by the Department or FHA.”

The changes noted in the letter will become effective 30 days from the April 15 ML publication date.

View Mortgagee Letter 2011-17.

Written by Elizabeth Ecker

 

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