1. Mortgage Acts and Practices—Advertising Policy and Procedures

1.1. Purpose

DiscountLoans.com maintains this policy in order to comply with all state and federal advertising laws and regulations.  At a minimum, DiscountLoans.com complies with the following advertising laws aimed at stopping unfair, deceptive, and abusive acts and practices by lenders:

• Truth-in-Lending Act
• Equal Credit Opportunity Act
• Fair Housing Act
• Telemarketing and Consumer Fraud and Abuse Prevention Act
• Unfair and deceptive trade practice statutes adopted by the various states

1.2. Scope of Policy

This policy applies to any written or oral statement that is designed to cause a sale (or create interest in purchasing goods or services).

DiscountLoans.com defines the term “advertising” to include any appeal or solicitation that DiscountLoans.com makes to existing or potential customers, whether consumers, real estate firms, brokers, builders, or developers, via:

• Television
• Radio
• Internet
• Magazines
• Brochures
• Pamphlets
• Mailers
• Telemarketing
• Websites
• Letters
• In person presentations
• Messages printed on monthly statements
• Leaflets and handouts distributed at meetings, training sessions, and conventions
• Social Media

“Advertising” does not include:

• Commitment letters
• Decline or downturn letters
• Counteroffers
• Notices of incomplete applications
• Informational material (e.g. loan pricing sheets) distributed to only business entities
• Notices required by federal or state law
• Educational materials that do not solicit business
• Responses to inquiries or complaints
• Pens, cups, hats, key chains, and similar promotional items that merely contain the company name or logo and to which application of advertising regulations is impractical

1.3. Compliance Precautions

Misrepresentations are especially common within the industry in the areas listed below. It is our policy to review the following areas, if mentioned in an advertisement, in an effort to avoid misrepresentations. DiscountLoans.com provides limited examples below, realizing that it is not an exhaustive list of areas in which misrepresentations may occur. Any employee wishing to place an advertisement should have the advertisement approved by management.

• Fees

Example: A statement cannot be made that there will be no fees charged, when in fact the fees and costs will be incorporated into the loan amount of total amount due from the consumer.

• Interest Rates

Example: Ads promoting low rates may not mislead consumers about the terms of the product actually offered.

• Costs

Example: Some ads for reverse mortgage products claim that a consumer will have no payments in connection with the product, even though consumers with a reverse mortgage are commonly required to continue to make monthly or other periodic tax or insurance payments, and may risk default if the payments aren’t made.

• Obligations

• Loan Conditions

• Product Availability

• The amount of cash the consumer will receive

• The amount of out-of-pocket money required at closing

• The existence, number, or timing of any minimum or required payments

• If the loan is a reverse mortgage, the amount that must be paid to retain the home when the borrower moves or dies

• Debt consolidation, including:

o The effectiveness of the loan in helping the consumer resolve difficulties in paying debts

o Statements that the loan can reduce, eliminate, or restructure debt

o Statements concerning debts or costs that are built into the loan

• False associations, including:

o A relationship between our company and the current lender (whether express or implied)

Example: “Important information regarding your loan with ________Bank.”

o An association with the government or a government agency; or

o Any statement that could be interpreted as suggesting that the loan is endorsed by or sponsored with any government program.

It is the policy of DiscountLoans.com to not make any material misstatements, specifically looking for those mentioned above.

1.4. Prohibitions

1.4.1. Tendency or Capacity to Deceive

Unfair, deceptive, or abusive acts and practices (UDAAP) are prohibited by law. DiscountLoans.com advertising must therefore have no tendency or capacity to deceive. All DiscountLoans.com advertising must be carefully reviewed, in the totality of the advertisement, and verified for accuracy and to ensure that statements are truthful and do not deceive.

Each advertising statement must be carefully reviewed from the consumer’s perspective; if advertising is directed toward a particular consumer group, DiscountLoans.com must evaluate the reasonableness of the advertisement based on the sophistication and understanding of consumers in that group.

Example: A mailer is sent out advertising reverse mortgages. The mailer clearly targets the elderly. Therefore, any interpretation of the advertisement will be done with the perspective of elderly consumers in mind.

Be aware that even if everything in the advertising is true, the advertising might be considered deceptive if true statements are combined in a way that is deceptive. Advertising must therefore avoid any statement that could be interpreted in more than one way.

1.4.2. Material Misrepresentations

Advertising must not contain any material misrepresentation, express or implied, regarding any term of any mortgage credit product. “Material misrepresentation” means the deliberate hiding, failure to disclose, or falsification of a material fact. A material fact is one that, if known to the other party, could have aborted, or significantly altered the basis of a contract, deal, or transaction.
Advertising must not contain any materially misleading statement.
Finally, any endorsements in advertising must reflect the honest opinions, findings, beliefs, or experience of the endorser.

1.5. Prohibitions

If an advertisement mentions specific credit terms, the mortgage lender or broker must actually offer those terms.

1.6. Mandatory Disclosures

1.6.1. APRS

If an advertisement states a rate of finance charge, it must state the rate as an “annual percentage rate” (APR), using that term.

If an advertisement gives an APR and the APR may increase during the loan term, the advertisement must state that the APR may increase.

An advertisement may not state any other rate other than the APR, with one exception: a simple annual rate applied to an unpaid balance may be stated in conjunction with, but not more conspicuously than, the APR.

1.6.2. TILA Triggers

If an advertisement mentions a simple annual rate but more than one simple annual rate will apply over the term of the loan, the advertisement must clearly and conspicuously state:

• Each simple annual interest rate that will apply
• The period of time during which each rate will apply
• The APR for the loan.

Advertising that mentions the amount of any payment must clearly and conspicuously state:

• The amount of each payment that will apply over the loan term
• The period of time during which each payment will apply
• The fact that the payments do not include amounts for taxes and insurance premiums, if applicable, and that the consumer’s actual payment obligation will be greater (this applies only to advertisements for first lien home mortgages)

Advertising that mentions any of the following triggers, must include all of the terms listed below:

Triggers:

• The amount or percentage of any down payment,
• The number of payments or period of repayment,
• The amount of any payment, or
• The amount of any finance charge.

Terms

• The amount or percentage of the down payment
• The terms of repayment (payment schedule), AND
• The APR and, if the interest rate may increase, that fact.

A radio or television advertisement may satisfy the above standards by clearly and conspicuously stating each of the triggered terms. They may, in the alternative, state clearly and conspicuously state the APR and that the rate may increase after consummation, if applicable.

1.6.3. Other Disclosures

Advertising must display the equal housing lender logo and legend or other permissible disclosure of its nondiscrimination policy.

Advertising must clearly and conspicuously state all applicable state lending license and National Mortgage License System number(s), if applicable to advertisement.

1.7. Mandatory Disclosures

Online communication must comply with the clear and conspicuous standard of Regulation Z (Truth In Lending) by including all appropriate disclosures or, if it contains a triggering term and uses multiple-page disclosures, clearly referring to any other page or location where the appropriate table or schedule of terms begins.

Example: A term in a multiple-page advertisement triggering additional disclosures may be accompanied by a link that takes the consumer directly to the additional information.

If an advertisement using electronic communication states an annual percentage rate (APR) and a simple annual rate or periodic rate, the consumer must be able to view both rates simultaneously. Using a link to view the APR at another location is not acceptable.

DiscountLoans.com recognizes that online systems for accepting credit applications may be considered “places of business” under the Department of Housing and Urban Development’s (HUD’s) rules prescribing lobby notices. Thus, DiscountLoans.com may include the “lobby notice” in its interactive systems for accepting online applications.

1.8. Use of Disclaimers

Disclaimers may be used to avoid allegations or misrepresentations. However, DiscountLoans.com understands that any disclaimer that is used should be:

• Clear and conspicuous,
• In close proximity to applicable statement, and
• Stated in at least the same size font as the body of the advertisement.

NOTE: Fine print at the bottom of a page is NOT a valid disclaimer

NOTE: Accurate information in the text of an advertisement does NOT overcome a misleading headline.

It is the policy of DiscountLoans.com to properly use disclaimers. We will make them clear and conspicuous while placing them in close proximity to the applicable statement.