Another New FTC Rule
Effective August 19th, 2011 the FTC rule requires any professional (to include Realtors) who provide mortgage information to consumers to make a new disclaimer. This is right on the heels of an agreement being made with the FTC that we do not have to make (most of) the MARS disclosures any longer.
Mortgage Information Disclaimers
The FTC 16 CFR Part 321 has specifically addressed Mortgage Brokers, Real Estate Brokers, Online Lead Generators, Builders and well… everyone who could remotely provide mortgage information to consumers.
That information that triggers this discljaimer is also pretty broad definition. The FTC rules defines “term” as:
The Final Rule applies to commercial communications regarding any ‘‘term’’ of any mortgage credit product. It adopts, without change, the proposed rule’s broad definition of ‘‘term,’’ which means ‘‘any of the fees, costs, obligations, or characteristics of, or associated with, the product.’’ The definition also ‘‘includes any of the conditions on or related to the availability of the product.’’ ‘‘Term’’ is intended to cover all aspects of a mortgage credit product without exception.
In other words, if in any “commercial communication” an agent discusses mortgage terms or products, they would need to make a disclaimer about the reliability of the information and that you are not a mortgage broker. If you were to advertise “no money down”, “great rates” or even pass along a lender’s interest-rate sheet you would be required to also use specific disclaimer language. Since many agents partner with mortgage lenders to provide information to their clients, this policy hits home. This would also be especially important to agents who share such information on their websites.
NAR recommends the following disclosure be on all materials that Realtors provide to their clients, when such information relates to this rule:
This communication is provided to you for informational purposes only and should not be relied upon by you. [Name of brokerage] is not a mortgage lender and so you should contact [name of lender] directly to learn more about its mortgage products and your eligibility for such products.
The FTC rule also requires that copies of such disclosures and the materials that are presented to consumers be kept for two years, for record keeping and review purposes.
This industry is rapidly approaching a point where the disclosures and disclaimer rules, from the countless regulatory entities, are overcoming the ability for any human to reasonably remember them all. Agents are encouraged to create some tool that helps them remember what has to be disclosed and when.