The Mortgage Acts & Practices Rules and the "Commerical Communication" Definition

by 05 Mar 2012

The Mortgage Acts & Practices Rules have been in effect since August 19, 20111—so it’s been around for a while buy not many people know about it…YET!

A large part of the rule explains “definitions” and what they mean.  And the biggie here is the Fed’s definition of “commercial communications”—or the various ways real estate agents and loan officer communicate with potential home buyers. 

Why would you care?  Because the rule states that if you do place an ad that includes mortgage terms, you must keep a written or electronic version of it for 24 months, in case you are ever audited. 

There are many different moving parts to the rules, but here's what is meant by the term “Commercial Communications”: 

  • Any written or oral statement
  • Illustrations such as charts and graphs
  • English or any other language
  • Labels
  • Packages
  • Package inserts
  • Radio
  • Television
  • Cable TV
  • Brochures
  • Newspaper
  • Magazines
  • Pamphlets,
  • Leaflets
  • Circulars
  • Mailers
  • Book inserts
  • Free standing inserts
  • Letters
  • Catalogue
  • Billboards
  • Posters
  • Public transit cards
  • Point of purchase displays
  • Film
  • Power point slides
  • Audio transmitted over the telephone
  • Telemarketing scripts
  • On hold scripts
  • Upsell scripts
  • Training materials provided to telemarketing firms
  • Infomercials
  • Internet
  • Cellular phones/networks
  • Webpages
  • Email
  • Direct mail
  • In-person sales presentation
  • green energy sources
  • …anything else considered “commercial communication”

To further clarify record keeping,

  • You must keep copies of all advertising if “materially different”. 
    • If the same/similar ad runs in different areas, only one copy required but a list of places where ad placed
    • Description of mortgage products offered to consumdrs
      • Including terms, conditions and any “unique names” given to the mortgage loan
      • Details of affiliated products, i.e. life/disability insurance. 

Just a heads up—the two federal agencies assigned the task of enforcing these rules are Consumer Finance Protection Bureau and Federal Trade Commission.

Here’s the info if you’d like to read more about it (or you need help falling asleep) Federal Register, FTC 16 CRF Part 321.

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Is TILA-RESPA a good or bad thing long term?