PARAMOUNT MORTGAGE - LENDER'S BLOG

"Real estate professionals need to be aware of the new FTC Mortgage Acts and Practices - Advertising Rule (MAP) that went into effect on August 19, 2011," states Amy Henderson, Director of Legal Services for the Missouri Association of Realtors (MAR).

The MAP Rule has two components and prohibits: 1.) Misrepresentation about mortgage products to consumers and 2.) Imposes record keeping requirements on anyone who provides information on mortgage products to consumers.

Henderson says, “this affects real estate professionals, because ‘providing information’ can mean something as simple as giving a client a lender’s rate sheet.”

The National Association of Realtors (NAR) has produced a detailed question and answer document for each member which provides an overview of the MAP Rule.

One common activity illustrated in NAR’s Q&A is how an agent should conduct an open house event where a lender’s rate sheet for the property is made available to attendees.

Considering the fact that if they did not author, print or in any way contribute to producing the rate sheet advertisement, Realtors may ask, “Am I subject to the Rule’s requirements if I make this information available to open house visitors?”

The short answer is yes, if the rate sheet includes estimated monthly payments based on the listing price and the current market interest rate for any loan product offered by a lender.

Henderson’s risk management team wants Realtors to know, “If the real estate professional is distributing the rate sheet, then he or she is the one making the communication and so will need to comply with the Rule.”

To ensure record retention compliance, “it is suggested that the real estate professional retain the sign-in sheet for the open house as well as one of the rate sheets distributed” for the required period of 24 months.

All communications, including emails, web site content, blogs, Facebook and Twitter postings that fall under the MAP Rule must be retained by the agent.

Nationwide, the legal and risk management departments of real estate associations are busy providing comprehensive information on how to comply with MAP’s regulations so agents can avoid the up to $16,000/day in civil penalties the CFPB/FTC could impose for a Rule violation.

Paramount Mortgage has adapted NAR’s suggested model disclaimer for advertising communications, which is included on all print or electronic communications used by agents.

“While the disclaimer won’t remove the need for the real estate professional to comply with the Rule, it will help to reduce any risk of a consumer claiming a misrepresentation,” writes the NAR legal team.

Link: MAP Q&A