So, What’s This About a Social-Media Quality Control Plan and Your Mortgage Business? (FFIEC)

Social Media & Mortgage Marketing – FFIEC Proposed Rule

By: Karen Deis, Publisher,

So, what’s this about the social media quality control, mortgage marketing and the FFIEC?  We’ve taken the 36-page proposal and condensed it for you into just a couple of pages.  And, YES, this affects you, your company and third-party providers who use social media to communicate with customers on your behalf.  Read what is considered social media.  Which laws you need to comply with. What the company has to do to comply and what loan officers and staff must be aware of.

I’m sure not many people in the mortgage industry know who or what the “Federal Financial Institutions Examination Council” (FFIEC) is all about.

Well, be prepared, because they are now one of the agencies “folded into” into the Consumer Finance Production Bureau group of agencies and they want you to implement a social media quality-control plan.  Not only companies as a whole, but loan officers, staff members and third-party providers.

A little history:   Started in 1979, the FFIEC is an “internal federal agency” founded to create uniform standards and report forms for the federal examination of financial institutions for the

Board of Governors of the Federal Reserve System (FRB)

Federal Deposit Insurance Corporation (FDIC)

National Credit Union Administration (NCUA),

Office of the Comptroller of the Currency (OCC)

Consumer Financial Protection Bureau (CFPB)

In the past, FFIEC had very little to do with the mortgage industry (non-bank companies), but all of that has changed since CFBP hit the scene.

In January, 2013, the FFIEC has been given the task of providing “examination procedures” for SOCIAL MEDIA compliance and reporting.

So, way back when the rules were written, social media wasn’t around!  However, the CFPB has given them the task of not only making sure that consumer contact, marketing and communications using this method are monitored,  but that financial institutions, banks, savings and loans, and credit unions as well as non-bank entities have an internal quality control plan to make sure you comply with all the laws.

If their proposal is adopted (here’s the link if you’d like to read the 36-page proposal), FFIEC will provide a “guide” for everyone to follow and you will be expected to make sure that any involvement with social media communications are legal and don’t incur any “risks” to consumer or the institutions themselves.  Once it is written, they will also encourage State Regulators to adopt the rules for THEIR examination process too.

What does the FFIEC consider “social media”?

Any form of interactive, online communications where you would generate or share “content.”  It includes:

  • Text
  • Images
  • Audio or video recordings
  • Email
  • Blogs
  • Websites
  • Bulletin boards/forums
  • Photo-sharing sites
  • Professional networking sites
  • Virtual worlds
  • Social games

So, how would this this affect you as a mortgage company?  As an LO or staff member?

First, let’s talk about how this would affect a mortgage company as a whole—and what company owners and managers need to know!

Companies are now using social media as a marketing tool to

  • Attract business
  • Communicate with consumers
  • Quote interest rates or loan programs
  • Offer incentives
  • Get new loan applications
  • Invite feedback from customers/prospects
  • Testimonials
  • Respond to complaints
  • Offer financial advice

Under the proposed rule, you will need a detailed “risk management” program to monitor and control the risks related to social media that may adversely affect your company/business.  The dealio here is that you’ll need to know the rules and regulations—and make sure you comply when using social media.  This includes the following rules and regulations.

  • Truth In Lending Act/Reg Z
  • Truth in Savings Act/Reg DD
  • Equal Credit Opportunity Act/Reg B
  • Fair Housing Act
  • Real Estate Settlement & Procedures Act/Section 8
  • Fair Debt Collection Practices Act
  • Unfair, Deceptive or Abusive Acts or Practices/Sec 5
  • Deposit/Share Insurance Disclosures
  • Advertising/Share Notice of NCUA Share Insurance
  • Non-deposit Investment Products
  • Electronic Fund Transfer Act/Reg E
  • National Automated Clearing House Association Rules
  • Bank Secrecy Act
  • Anti-Money Laundering Act
  • Community Reinvestment Act
  • Gramm-Leach-Bliley Act – Privacy Rules and Data Security Guidelines
  • Children’s Online Privacy Protection Act

Some of these rules may not apply to you—but the part about managing the risk is to know each rule and make sure you comply.  For example, under the Fair Housing Act, if you post something that says you have “low-Income housing money available,” the rule considers that type of marketing as violating fair housing.  You may want to change the terminology to “rent-subsidized money available.”

Your Social Media Quality Control plan should include the responsibilities of your compliance department, technology people, legal counsel, human resources and marketing departments (internal and external).

How this will affect Loan Originators and staff members!

Loan officers, processors, underwriters, and servicing staff must also comply.  You will need to know the rules and regulations for each of the “Acts” mentioned above.  If you quote an interest rate, a down payment (even “no-down-payment) or a payment using any of the social media methods mentioned, you must comply with Reg Z Truth In Lending rules, which include full disclosure of the terms of the loan.

Even if you send a private message using email or social media asking for a Credit Card number or Social Security Number and the customer gives it to you, your technology department must ensure that your site is secure and complies with the Gramm-Leachy-Bliley Privacy Rules Act!

Oh and I recently saw a loan officer post a “contest” that if you send her a referral, your name will be entered into a drawing to win an iPad!  RESPA Section 8 kickback violation!

Do you see where I’m going with this? 

You must know every one of the rules that apply to you and your company and create disclosures that need to be included. You must also know the laws or what actions need to be taken when communicating using social media.

And it doesn’t stop there.  Even if you (a loan officer or internal staff) post something on your personal Facebook page, if it has something to do with your mortgage business (as people perceive that you represent the company), the company must have a plan in place as to what you are or are not allowed to post on your private social media pages.

Oh, and there’s more…

Included in the Social Media Quality Control Plan, you must also consider how you/your company will handle the following:

Risks to Your Reputation – Negative publicity could arise from negative comments from the public, the press, dissatisfied customers.  Even if none of the rules have been violated, you will need a plan to manage the risk of “reputation.”

Risks to Fraud and Brand Identity – It is suggested that you include in your plan a way to monitor your online/social media presence in case someone steals your identity, or in the case of fraudulent use, phishing, spamming or spoofing attacks.

Third-Party Monitoring – Many companies use virtual assistants or hire someone to post their blogs and content for them.  Sometimes the content is created by the company and they merely post the content.  Sometimes the third party creates the content for them.  It’s your responsibility to ensure that third-party companies comply with the rules and regulations too.

Just to let you know, the definition of “social media” may be expanded after the rule has been finalized.  There may be other “government acts” that will be included after the comment period.  The proposed rule will become law.  You may want to get started on it right now—with the information that I have provided here.

Origniators Giving Back–Mortgage Revolution New York

Despite the industry news, bad press and other negative talking points, there are many in the mortgage industry giving back.

Mortgage Revolution is about leaders teaching leaders. Mortgage originators who are in the field ever day helping clients training other originators what is working in today’s market.

Some of the past speakers have been

Mortgage Revolution is committed to putting on the industry’s finest sharing and teaching experiences for originators while donating all proceeds to charity. The event in New York will be the final event of the year and should be the catalyst for any originator truly committed to their industry.

The organizers and founders listed below have been the inspiration for these events.

Media Partners:

If you are in the business and feel this is truly your career of choice, Mortgage Revolution is one event you can’t afford to miss.

If you are searching for a home, home loan or just simply reading this and are shopping, ask if YOUR Loan Officer is traveling to New York for the industries greatest teaching, learning and sharing experience. I look forward to seeing you in Tarrytown.

Are FHA Loans Assumable? You Bet!

A great financing option that real estate agents need to know about ,if they are listing a home for sale, is if the home has an FHA mortgage that was originated after December 15, 1989.  Why?  Because the loan is assumable!  More Info and Mortgage Talking Points(tm) “FHA Assumptions=More Sales” can be found at 

Here are some of the rules:

Buyer must qualify based on credit–(Servicer may be more lenient about the score)

Loan Fees are lower–(Servicer will charge for processing–usually a flat fee)

Seller may pay buyer’s closing costs

Secondary financing and borrowed funds may be used by buyer (Must qualify for all payments)

Sellers will be released of liability

What’s prohibited:  If buyer purchasing to use as investment property or 2nd home (some exceptions heres), loan is NOT assumable

At the time the home is listed for sale, real estate agents should order an “FHA Assumption Package” from the company servicing the loan.  They will also be the ones processing the paperwork. Great info to share with real estate agents–especially on Face Book!

Social Networking For Loan Officers

So we’ve been chatting about social networking here on Day #3. There’s been alot of talk about sites such as Twitter, FaceBook, MySpace and others. (Active Rain and LinkedIn as well) The big question out there seems to be whetehr or not this is a profitable use of your time. Here’s my take on the subject:

– Anything that can expand your Sphere Of Influence gets a big thumbs up from me

– Anything that can become viral gets another thumbs up

– Any tool can be abused and drain your time – Smart time management is required

– Never try to use social networking as an excuse to ignore offline networking and prospecting efforts

I only recently began using these tools to market the Loan Officer Marketing Lab, but I’ve been using “the big 3″ for the last few years to market my web development firm. Let me tell you… It works – but it must be managed as a database tool.

I view people as my only true asset in business. If no one is there to hear my marketing message, then what is the point of being in business. If I have a group of people ready and willing to hear what I have to say, then no matter what I’m selling, I have a pre-built audience. The competion who ignores building a database, and online “audience” will always be 30 steps behind you since every time they wish to bring in more business, they have to market to cold groups as opposed to warm.

That’s the beauty of social networking – It builds your audience, it exposes you to more people you otherwise never would have had an opportunity to market to, and it’s relatively painless to build. Use these tools in a respectful manner, and you’ll soon grow to love social networking as well. Here’s a handy little guide we posted to the blog this morning:

Make it a great one!

CW – Loan Officer Marketing Lab

A bird Attacked Me In My Car Today!

That was the title of the email I sent out to realtors a few years back. Why am I telling you this? Because it really happened, and it got me a whole bucket full of closed loans. Want to know how a violent bird attack on my person resulted in closed loans?  Here’s how it happened:

I was headed to the office around noon, and it was a beautiful day out. So I decided, what the heck, I’ll put the convertible top down. I smiled as my favorite song started playing through the speakers, the top was down, I leaned my arm on the door sill and thought about how perfect of a day this was.

That’s when I saw it… This small bird was sitting on top of the traffic light seeming to monitor all the cars approaching this 4 way street crossing. I pulled up to stop for the red light. As this fluffy little bird with skinny legs turns to look in my direction, he leaps up and starts flying in an erratic pattern toward my car. No biggie right? WRONG! Boy was I about to pay for this assumption!

I was puzzled that he was now only about 30 – 40 feet from my car and was swooping lower and lower as he approached me head on – Almost like a crazy game of “chicken” – never mind the fact that he was moving, and I wasn’t.

Twenty  feet, 15, 10, 5 and “swoosh” he zips by the top of my car at full speed near enough for me to have reached out and brushed him with my fingertips had I wanted to. I figured that he was either suffering from some bizarre bird-hangover or he was just making his point that he wasn’t intimidated by me and my 2,900 pound hunk of metal. Bold bird huh?

But he wasn’t finished…  No not by a long shot! I turned my head forward again to watch for the light to turn. 3 seconds later I’m being assaulted from behind by this crazy Sparrow from hell! (Actually I’m pretty certain it was a mockingbird) He is hovering in the air about 5 feet from my head screeching like some sort of banshee and zipping down in mock dives!

Perhaps he thought I was encroaching on his territory, or maybe he just didn’t appreciate the music I had chosen to listen to on such a beautiful day instead of listening to him sing… I will never know. But just as quickly as he appeared, screeched, and dive bombed, he zipped away again. I craned my neck to see where he went, and just as I thought I caught a glimpse of this feathery devil, I felt a rain drop on my forehead.

No big deal, it’s just rai…. Wait a minute. What the heck? Why is this “rain drop” milky white and dripping down my…. OH NO HE DIDN’T! Apparently this was the parting shot from this bold little bird. If he couldn’t chase me away, he was going to show his disdain for me and my bright yellow car the best way he knew how! Sick…And I never carry napkins in my car either…

So what do you think? Interesting story right? It really happened, and yes, I ended up using my tie as a make-shift napkin that day. Better than driving around with bird droppings on your forehead! So how did this email get me 3 loans in about 2 hours?

At the time of this happening, I was quite active on My Space and with a real estate specific blog. I rushed back to the office after what we from this point forward shall refer to as “the incident” partly to blog about this, and partly because I had a sudden urge to dump my tingling head into a 100 gallon bucket of water and soap!

So I get back to the office, and I posted the blog exactly as you see the story recounted above. I posted onto MySpace, posted onto a few other select social networks, and then I wrote a short recap and emailed it to my realtor prospects within my auto responder. (This is a list of about 200 – 210 top producing realtors that had double opted in to my email newsletter)

I sent the email out, linked back to the blog post for the “expanded” story, and placed a quick “oh by the way” note at the end of the email. The results? Normally my emails get opened at a rate of about 40 – 45%. This email showed more than 70% had opened within 1 hour of sending the email.

My blog, MySpace page, and others had more than double the number of comments normally received, and my “oh by the way link” had showed more than 27 clicks in that same hour. What was my “oh by the way?” This was a link to a short 4 page email marketing guide I had customized for the real estate industry. Nothing more than a collection of marketing suggestions, ideas, creativity boosters, etc.

By the next morning, I had plenty of emails from agents laughing at the story, inviting me to lunch, and thanking me for the guide.

3 of the agents ended up in a conversation with me on the phone, and I landed a total of 3 loans referred within a 24 hour period… So the lesson of this story? If you want to get 3 loans in 24 hours, you need to get bird poop on your head… Ooops, wrong moral… Sorry about that.

The true moral is that standing out from the crowd, even in a seemingly unrelated fashion can get you noticed. I wasn’t suddenly a better loan officer for having been attacked by hell-bird. Not at all. But I had a funny enough experience to make the right agents laugh, notice my link, and in turn notice me. I’d been there emailing those agents for months up to that point.

It took a bird crapping on my head story to get their attention, but once I did, I closed plenty of loans because of it. 1 of the agents that referred me a loan that day became a regular, and we went on to do plenty of business together.

This is the power of networking, whether it be in person, or online. The MySpace page, my blog, my email list. All of these tools served as my distribution channel and helped to spread the word of my ordeal, and the email marketing article. Whether you have a funny story to tell, or a useful article to share, you need to expand your reach. Be friendly, be helpful, be consistent. Now have a great weekend and watch out for those angry birds!

CW – Loan Officer Marketing Lab

Trulia v. Zillow SEO battle. Local Real Estate SERPs, Do You Care?

Image representing Zillow as depicted in Crunc...
Image via CrunchBase
Image representing Trulia as depicted in Crunc...
Image via CrunchBase

An interesting battle royale whipped up on Twitter over the last week or so–the “SEO merits of Trulia versus Zillow.” Maybe the better question is why does it matter? Or, what is SEO and this SERPs character they keep talking about?

My guess is 95% of real estate and mortgage brokers make a living with out the foggiest clue. And, that may be the best way to win the SEO battle. Although, some would argue that a real estate TEA party is in order.

Here is my case (applies equally to real estate and mortgage):

  1. If you write about your local area,
  2. If you photograph your local area,
  3. If you talk to/interview local people,
  4. If you cover local events,
  5. If you highlight local businesses, you will…

Blow the doors off Trulia and Zillow in SEO (who cares if you don’t know what it is), leads, and conversion. Give people what they are looking for, like “Denver homes” or even better “modern homes in Denver” and you will not be competing with Trulia or Zillow.

Proof: Denver homes and modern homes in Denver SERPs–no Trulia or Zillow.

Point is: Trulia and Zillow are great at what they do. Let them help you with your business. But, if you want to corner the online market for your local area–you have 100% control.

BTW, if you want to read how the Modern Homes in Denver coupe was pulled on Trulia and Zillow learn from the architect:

Hey, at the very least you know what SEO and SERPs are–now forget them and get back to being helpful to your clients!

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Using Social Media to Update and Set Expectations with Clients

I remember in the glory days of the mortgage refinance boom client communications was a huge focus. You had to constantly communicate and educate your clients to keep them from being sniped by a competitor pitching a lower payment or exotic product. Yesterday, I caught a glimpse of something that shows me those days are back, but for different reasons.

Mortgages are harder than ever to get. Even if you are qualified the queue is long and painful. This is causing enormous anxiety in your customers. Anxiety that can make them wander.

Here is the Twitter message I saw:

client communications with social media

Why is this message so important? Well, first you should be following pros like @mortgagereports and reading their blogs because they will make you more successful. But, second and most important here is that Dan Green is showing the masterful art of client communications and setting expectations.

I think it was Dan himself that once told me, “clients are always in a panic.” Isn’t this true?

Think about your current sales pipeline. You have someone trying to jump in on the low rate, fighting to get refinanced before they are hit with a potential lay-off, needing to sell a home to take a new job. This market is full of panic and anxiety. Unfortunately, this can trigger bad wandering client behavior–for you and them.

Social media makes a very scaleable way to keep those panicked and anxious clients informed and set their expectation for the process. Foreshadowing the sales process is critical in keeping customer happy even in tough sales cycles.

I have seen several great examples of how Realtors and mortgage brokers are using social networks and social media statuses to set expectations and keep clients informed.

What are you doing to communicate with your clients in this tough market? Comments, please.

Here is one suggestion:

mortgage customer communication

Tom Vanderwell is another good mortgage loan officer to follow and read for great client communications.

Share your ideas on client communication strategies with the Lenderama community by commenting below. I can’t wait to hear what makes you successful.

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