Mortgage Direct Mail – Understanding the Risks of Creating Mortgage Advertisements

There can be a lot of risk in sending out mortgage advertisements in today’s market. If you are thinking about preparing a piece which offers certain loan products that your company offers, you need to have an understanding of the rules that apply to mortgage advertising. Although the rules vary by state, it is helpful to review what rules some states have issued concerning the marketing of mortgage loans.Here’s an example of a restricting statute from Connecticut’s Non-depository First Mortgage Lenders and Brokers statute that closely regulates the advertisement of mortgage loans:Sec. 36a-497: (Formerly Sec. 36-440l). AdvertisementsNo person licensed pursuant to section 36a-489 shall:(1) Advertise or cause to be advertised in this state, any first mortgage loan in which such person intends to act only as a first mortgage broker unless the advertisement includes the following statement, clearly and conspicuously expressed: BROKER ONLY, NOT A LENDER; or(2) In connection with an advertisement in this state, use(A) a simulated check(B) a comparison between the loan payments under the first mortgage loan offered and the loan payments under a hypothetical loan or extension of credit, unless the advertisement includes, with respect to both the hypothetical loan or extension of credit and the first mortgage loan being offered, the interest rate, the loan balance, the total amount of finance charges, the total number of payments and the monthly payment amount that would be required to pay off the outstanding loan balance shown(C) representations such as “verified as eligible”, “eligible”, “preapproved”, “prequalified” or similar words or phrases, without also disclosing, in immediate proximity to and in similar size print, language which sets forth prerequisites to qualify for the first mortgage loan, including, but not limited to, income verification, credit check, and property appraisal or evaluation; or(D) any words or symbols in the advertisement or on the envelope containing the advertisement that give the appearance that the mailing was sent by a government agency.As can be seen by a close reading of Connecticut’s advertisement law, this state places many limitations on what you can and cannot do when you advertise mortgage loans to Connecticut borrowers.For example the Connecticut law contains the following rules:1. When acting as a broker, your ad must state “BROKER ONLY, NOT A LENDER”2. You can’t use a “simulated check” in your mailer piece sent to Connecticut borrowers.3. If you are doing a comparison of loan payments between two loan scenarios, you must also state for both examples: 1) interest rate, loan amount, total finance charges, total number of payments (loan term), and the monthly payment required to pay off the entire loan amount.4. If you tell the consumer that he or she is “Verified as Eligible”, “Eligible”, “Preapproved”, or “Prequalified” – then you must also (in same area of the mailer and similar font size) state what the required conditions are to qualify for the loan such as income verification, credit check, and property appraisal. Note that some states (Virginia for example) will not let you write “Preapproved” on your mailer unless you have already done a complete underwriting review of the recipient’s loan application.5. You can’t make your ad look like it is coming from the government.We chose to show you this Connecticut statute because the above rules, although not required by each state in the USA, are good rules of thumb. Please check each state’s law for more information before considering any mailer campaign into that state.Another state recently enacted rules restricting advertising of licensed lenders and brokers in the state of Idaho:(From Idaho Rules Pursuant to Idaho Residential Mortgage Practices Act) Deceptive Advertising (Rule 40)01. Advertising. Advertising means making or permitting to be made any oral, written, graphic or pictorial statements, in any manner, in the course of the solicitation of business. Deceptive advertising is defined to include the following practices by a licensee, or a person required to be licensed under the Act:a. Making a representation or statement of fact in an advertisement if the representation or statement is false or misleading, or if the licensee does not have sufficient information upon which a reasonable belief in the truth of the representation or statement could be based.b. Advertising without clearly and conspicuously disclosing the licensee’s business name.c. Engaging in bait advertising or misrepresenting, directly or indirectly the terms, conditions or charges incident to the mortgage loan being advertised. Bait advertising, for these purposes, means an alluring, but insincere offer to procure, arrange, or otherwise assist a borrower in obtaining a mortgage loan on terms which the licensee cannot, does not intend, or want to provide, or which the licensee knows cannot be reasonably provided. Its purpose is to switch borrowers from obtaining the advertised mortgage loan product to obtaining a different mortgage loan product, usually at a higher rate or on a basis more advantageous to the licensee.d. Advertising an address at which the licensee conducts no mortgage brokering or lending activities or for which the licensee does not hold a license.e. Advertising in a manner that has the effect of misleading a person to believe that the advertisement or solicitation is from a person’s current mortgage holder, a government agency, or that an offer is a limited opportunity when such is not the case.Idaho Rules Pursuant to Idaho Residential Mortgage Practices Act, ยง, et. seq.These Idaho rules also reflect the general ideas that “Deceptive Advertising” will not be tolerated within their state.Idaho regulates deceptive advertising by prohibiting:o False representationo “blind” advertising (not including your company’s licensed name in the ad)o Engaging in “Bait Advertising” – sometimes referred to as “Bait and Switch”o Advertising using a false address or an address for a location that is not properly licensed by the stateo Advertising so that the ad looks like it comes from the government, from the consumer’s current lender/servicer, or that the loan scenario is a “limited opportunity”We provide you with these two statutes to give you an idea of how the states attempt to regulate your advertising practices. Note that almost every state will have some sort of statute or rules regulating advertising. Nonetheless, you should obtain and review a copy of the advertising rules from each of the states in which your intend to perform direct marketing.

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When to Use Personal Finance Services and How to Find Them

Becoming efficient and wealthy will require the use of personal finance services and professional help to manage your finances effectively at some stage in your life. Managing your savings and Investment plans, debt management, taxes and money are all part of financial administration that can be overwhelming. There are times when using services rather than managing your finances on your own is a wise idea.There are situations when people get occupied with mountain debt and finance problems that could not be remedied in the course of cost cutting and extra jobs, but require you to use a service or agency to help you manage what you have. Such scenarios like divorce, a long-lasting period of unemployment, unexpectedly huge medical bills, mortgage companies threatening to foreclose on your home etc will require expert help to not only navigate you out of trouble but also take some stress out of your life.These are horrible problems no one liked to get involved with and regardless of how hard you have tried, you have made little development in looking to find better solution to it. Before you get stressed out, a personal finance service can lend a helping hand to you.There are financial help services capable of working with your creditors and get them to reduce interest, cycle accounts to get them current, and amazingly get your payments reduced. The approachable staff at these relevant agencies is knowledgeable in all areas of finance, and they can possibly find better solutions to your debt problems that are 99% does not engage in bankruptcy.Below are lists on how to find personal finance services at your best.First, get in touch with a company through a professional relief network. All the firms which have delivered state of the art results are listed with these networks. Thus, stop wasting time in searching on the internet. Personal finance companies capitalize on the recession conditions. To compare debt settlement companies it would be sensible to visit a free debt relief network which will locate the best performing companies in your area for free.Second, look at the advantages and disadvantages of each one of them and see which one will help you the most. So how can you ensure yourself from legal and illegal firm? The focus here is on the word legal. If the firm which you have chosen is not listed with a particular network, it is illegal. This is a very important way to identify scams and it will save a lot of money as well.Third, If none of these agencies suites your taste in managing your personal finance, it may be time to consult with a professional personal finance expert. He or she offers a free initial consultation. However, as a client you need to bring relevant resources and information and remember not to hide any debts record. The personal finance expert will review your information and advise you on how to best proceed.You might wonder what to do and where to begin. If you decide to seek financial, it is essential to so your research on the various options. And of course the internet is always a place to start. As a general rule of thumb seek out 10 companies or websites to view, interview or research each one to narrow down to three services then seek references or testimonials from the three personal finance services you have chosen.

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Insider Tips to Getting High Leveraged Commercial Financing!

The Investor appeal of acquiring real estate often overlooks the main reason for purchasing… Making money! Too many real estate investors often confuse buying real estate with making money. In many cases, they are not the same. The overall strategy of buying low and selling high is only one part of making money in real estate. The longer term money is made by the savvy investor who understands the power of leveraged financing.Think about this for a moment, most real estate gurus promote courses on finding distressed opportunities, negotiating owner financing and the various reasons why you should purchase real estate. How often do you see articles, or courses, promoting effective leveraged financing?Let’s start with the purpose and the differences between the zoning of residential and commercial real estate. Residential zoning requires that all loans be collateralized based on the appraisal or purchased value of the property. It also requires that the owner qualify within the lender’s debt to income ratios, along with personally guaranteeing the loan. The hard money acquisition option has some short-term benefits however it is not intended for long-term purposes. The landlord type of investor requires stable affordable loan terms.The overall intent of residential zoning is to personally reside in the property and this is why!1) R zoning limits property usage.
2) Non-owner occupied residential loans pay an interest rate surcharge.
3) Non-owner occupied properties do not qualify for Homestead exemptions and is taxed at a higher rate.
4) Your personal guarantee limits your property acquisitions to your personal income and debt ratio.
5) Today’s residential lenders always lend to cost (LTC) or purchase contract and will require a significant down payment to reduce lender risk.Commercial zoning by its own definition means properties used for commercial purposes. Properties that are used to generate business sales or profits. There are multiple types of commercial zoning codes, but all share the primary function for business use. Commercial tenants along with the leases they sign can be leveraged to qualify for income based commercial financing. Here lies the primary benefit of commercial investing.Commercial Financing Features & Benefits1) The loan is based on the property income not your personal income.
2) The loan does not appear on your credit report and will not limit the number of property acquisitions.
3) Loans can be structured to be non-recourse and may not require a personal guarantee.
4) Cash flowing Commercial properties also qualify for Loan to Valve (LTV) Financing.LTV Financing is not subject to the purchase price or contract price. It is based solely on the property income or cash flow. This type of financing benefits the savvy commercial investor who knows how to purchase the property at the right price. It becomes possible and very likely that the property acquisition will require little or no down payment.Now ask yourself if LTV financing really exists, why aren’t the gurus marketing this information? It’s really a simple answer! Most real estate investors get excited talking about buying real estate, but spend little or no effort researching or structuring financing. In short, it is considered boring or to complicated.Real Estate Investors, who value financing equally to that of the actual real estate acquisition, will be the BIG winners in this market!

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