RatePlug system changes

As part of RatePlug’s ongoing commitment to keep you informed of industry changes, they wanted to update you about a new Federal Trade Commission requirement for those who offer commercial information about mortgages to clients or customers. This will have an impact on ALL real estate professionals. RatePlug wanted to be sure that this new requirement did not escape your notice. Click here to view a PowerPoint presentation demonstrating the new “Display Achieve” features.


Real estate professionals need to be aware of a new FTC rule — “Mortgage Acts and Practices – Advertising,” aka, MAP.

Among other things, it prohibits misrepresentations and imposes recordkeeping requirements on anyone who provides information about mortgage products to consumers.

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

To view entire FTC MAP ruling go to:

http://ftc.gov/os/fedreg/2011/07/110719mortgagead-finalrule.pdf 

The rule’s requirements

The MAP rule prohibits misrepresentations in a commercial communication about any term of a mortgage credit product. And “commercial communication” is broadly defined: It covers any oral and written statement designed to “create an interest in purchasing goods or services” — in this case a mortgage credit product. That means any form of credit that is offered to a consumer and secured by the consumer’s dwelling.

And what kind of statement is considered to be creating such an interest? The definition is broad — any information about mortgage terms is covered, and under “mortgage terms,” the FTC includes interest rates, amount of taxes, variability of interest rates, prepayment penalties, and products sold in conjunction with a mortgage.

The rule applies to real estate professionals when they provide any information about the terms of a mortgage product to a consumer. For example, by giving a client a rate sheet for a particular lender, or providing an application for a specific mortgage product.

Disclaimers and recordkeeping

So a Realtor® gives a client information that falls under the rule. What does that mean? What does he/she have to do to be in compliance?

For starters, provide a disclaimer on whatever documents you give out or written statements you make; a properly crafted one can protect against later misrepresentation claims.

NAR’s sample disclaimer is simple and clear, “’Broker Name’ is not a mortgage lender. Contact ‘Lender Name’ directly for more information about its products and your eligibility.”

This language is included in all communications through the RatePlug system.  

Any “information” given to clients needs to be retained for two years.

Real estate professionals are required to keep all covered commercial communications for two years from the date that the communication was made to the consumer. All communications generated through the RatePlug program are archived and retrievable for 6 years.