Does Advertising Is Illegal For A Loan Originator?


Requirements
The following requirements apply to consumer credit advertising:

  • Credit advertising may not be false or misleading.
  • Disclosures must be made clearly and conspicuously (i.e., in a reasonably understandable form).
  • Specific credit terms may only be stated if those terms actually are or will be arranged or offered to the consumer.
  • Bait-and-switch credit promotions are not allowed (e.g., advertising a loan at very attractive terms and then informing potential customers that that loan is not available but that a different loan with different terms is).

Example
An advertisement may not state that a specific installment payment or a specific down payment can be arranged unless the lender is prepared to make those arrangements, nor may it misrepresent an adjustable-rate mortgage as a fixed-rate mortgage. However, an ad may contain terms that will be offered only for a limited time or that will become available at a known future date.

Trigger Terms
If an ad contains a trigger, or triggering, term, it must disclose a number of additional credit terms. A triggering term is any of the following specific credit terms:

  • The amount or percentage of any down payment (e.g., “5% down,” “95% financing,” “$6,200 down”), except when the amount of the down payment is zero
  • The number of payments or period of repayment (e.g., “360 monthly payments” or “30-year loan”)
  • The amount of any payment (e.g., “payments of less than $1,400 per month”)
  • The amount of any finance charge (e.g., “total financing costs of less than $3,000”)

Good To Know
If an ad states a rate of finance charge, it must state the rate as an annual percentage rate, using that term or the abbreviation “APR.” The primary lending rate that may be advertised is the APR. If the APR can change during the loan term, that fact must be contained in the ad.

 

Disclosure is required even if a triggering term is not stated explicitly but may be readily determined from the content of the ad.

An ad that states “80% financing” implies that a 20% down payment is required, so additional disclosures are required. However, an ad that states “100% financing” requires no further disclosures because no down payment is required.

Disclosures required in an ad containing a triggering term include:

  • the amount or percentage of the down payment.
  • the terms of repayment (i.e., the payment schedule [i.e., the number, timing and amount of the payments], including any final balloon payment, scheduled to repay the debt).
  • the annual percentage rate, using that term or the abbreviation “APR.”
An ad containing all the required credit terms would be:
Cash price $100,000. $5,000 down. Interest at 9?% (10.5% APR). Mortgage of $94,600 to be paid in 360 equal and consecutive monthly installments of $822.08, plus taxes and insurance..

Advertisements for Credit Secured by a Dwelling
The following requirements apply to any ad for credit secured by a dwelling, other than television or radio advertisements, including promotional materials accompanying applications.

If the ad states a simple annual rate of interest and more than one simple annual rate of interest will apply over the term of the advertised loan, the ad must clearly and conspicuously (i.e., with equal prominence and in close proximity to any advertised rate) disclose:

  • each applicable simple annual rate of interest. In a variable-rate transaction, a rate determined by adding a reasonably current index and margin must be disclosed.
  • the period of time during which each simple annual rate of interest will apply.
  • the APR for the loan.

If the ad states the amount of any payment, it must clearly and conspicuously disclose:

  • the amount of each applicable payment over the term of the loan, including any balloon payment (based on reasonably current index and margin, for a variable-rate loan).
  • the period of time during which each payment will apply.
  • for credit secured by a first lien on a dwelling, the fact that the payments do not include amounts for taxes and insurance premiums, if applicable, and that the actual payment obligation will be greater.

An ad for credit secured by a dwelling must avoid causing confusion between fixed- and variable-rate loans. Therefore, it may not:

  • use the word “fixed” to refer to rates, payments or the credit transaction for a variable-rate transaction;
  • use the word “fixed” to refer to rates, payments or the credit transaction for any transaction where the payment will increase (e.g., a stepped-rate mortgage transaction with an initial lower payment); or
  • use the word “fixed” to refer to rates, payments or the credit transaction in an ad for both variable-rate transactions and nonvariable-rate transactions.

The use of the word “fixed” may be used when advertising variable-rate loans if:

  • the phrase “adjustable-rate mortgage,” “variable-rate mortgage,” or “ARM” appears in the advertisement before the first use of the word “fixed” and is at least as conspicuous as any use of the word “fixed” in the ad; and
  • each use of the word “fixed” to refer to a rate or payment is accompanied by an equally prominent and closely proximate statement of the time period for which the rate or payment is fixed and the fact that the rate may vary or the payment may increase after that period.

An ad for credit secured by a dwelling may not:

  • state that a product is a “government loan program,” “government-supported loan” or otherwise endorsed or sponsored by any government entity unless the ad is for an FHA loan, VA loan or similar loan program that is, in fact, endorsed or sponsored by a government entity.
  • use the name of the consumer’s current creditor if the ad is not sent by or on behalf of that creditor, unless:
    • the name of the person or lender making the advertisement is disclosed with equal prominence; and
    • the ad includes a clear and conspicuous statement that the person making the advertisement is not associated with, or acting on behalf of, the consumer’s current creditor.
  • make any misleading claim that the product offered will eliminate debt or result in a waiver or forgiveness of a consumer’s existing loan terms with, or obligations to, another lender.
  • use the term “counselor” to refer to a for-profit mortgage broker or mortgage lender, its employees or persons working for the broker or lender that are involved in offering, originating or selling mortgages.
  • provide information about some trigger terms or required disclosures (e.g., an initial rate or payment) only in a foreign language and provide information about other trigger terms or required disclosures (e.g., information about the fully indexed rate or fully amortizing payment) only in English.

Oral Rate Disclosures (12 CFR Section 1026.26)
If a consumer orally asks about the cost of credit, the lender must state the APR. For closed-end credit, he may also give a periodic or simple interest rate that is applied to an unpaid balance. If a lender cannot determine the APR for the specific closed-end credit about which he is being asked, he may disclose instead the APR in a sample transaction.

For open-end credit, once a lender states the APR, he may also give the periodic rate. Other information that applies to the consumer’s specific transactio

What is an Electronic Underwriting?


Electronic underwriting is nothing more than complete accurate legible loan application and getting immediate loan approval from Fennie Mae, Freddie Mac for any of the lenders.  The sooner you will use an electronic underwriting for a loan approve, sooner you put yourself in a position you want to be which is called a task based position. Once you have a loan approve it give you a list of things you need to found the loan. That list of things is your job at that point. Everyday is gone day without a loan approve than you might be speculating, promising something you cannot deliver or the deal it’s not going to close. A good loan officer goes as soon as possible to electronic underwriting to know what can be done. If your are hired by nationwide company you can do loans out of the country.

Why people are doing a business with you from out of a state?

  1. I found them, I know he needs to borrow
  2. I added a value
  3. I sold myself
  4. I got a commitment
  5. I make a nuts a borrower to do business with anybody else than me!

It’s a lucrative business than is easy to get into. A lot of people are going into the business for wrong reasons. 82% of loan officer don’t return phone calls. TIt’s easy to be good in this business.

It takes 4 hours from saying Yes.

  • In 1,5h take the application.  I can plant seeds, express confidence throgh relationship. Build a report.
  • 1,5 h hour for lots of little tasks (emailing, updating, you should speak to your borrower at least twice a week). Offense and defense (getting a loan closed)
  • 1h @ closing, how much they have to bring on closing, when/where they can pay first payment. You can lose your deals in a million different reasons.

Secrets Of Success as a Loan Officer

  1. Speak to more people about borrowing money
  2. Solve problems

2 Type of loans

  • Good loans – income, credit, collateral, compensating factors, cash to close, a committed borrower
  • Bad Loans – all other loans

 

 

Everybody wants bets rates, of course every they do. They deserve best rates that’s available for their circumstances.

There is only one way to get best rates on a fixed rate loan. To get a loan on a Fannie may/Freddie mac. Its not coming from bonds,