Better be careful the next time you use Social Media for your reverse mortgage business according to a mortgage lending update from Patton Boggs.
Whether your company uses Twitter, Facebook, or any other form of social media, it’s widely considered a form of advertising, triggering various state and federal disclosure requirements and it’s critical that mortgage lenders proceed with caution.
For example, state laws impose various disclosure requirements. In Colorado, in addition to any required generic disclosures, the advertisement must also include the name and license number of at least one responsible mortgage loan originator licensee, along with the following statement: “to check the status of your mortgage loan originator, visit http://www.dora.state.co.us/real-estate/index.htm.”
“Given the limited number of characters available per tweet (Twitter), use of such licensing disclosure may not be feasible,” said Patton Boggs.
The law firm notes that lenders should have all promotional and advertising pieces reviewed and approve by compliance personnel prior to their use.
Lenders must also avoid use of any name other than the true name of the company that appears on the lender’s mortgage license. Companies should also avoid use of an address on advertisements that is not licensed to conduct business in a state where the advertisement will be distributed.
”While social media is certainly a valuable tool in a lender’s advertising arsenal, lenders must consider compliance boundaries and develop policies and guidelines that allow employees to successfully navigate complicated state and federal disclosure requirements,” said the law firm.
