1. Internet Advertising
Compliance

2.  Plan
 Know Your Exposure
 Determine Your Personal Level of Comfort
 Chart Your Course of Action

3. Compliance Risk
 Compliance risk is the risk to earnings or capital arising from violations
of, or non-conformance with, law, rules, regulations, prescribed practices,
or ethical standards.
 Compliance risk arises in situations where the laws or rules
governing certain activities or clients may be ambiguous
or untested. Compliance risk exposes you to fines, civil money
penalties, payment of damages. * Civil and Criminal *
 Compliance risk can lead to a diminished reputation, limited business
opportunities, lessened expansion potential, and lack of contract
enforceability.
 Compliance risk is often overlooked; a portion of this risk is sometimes
referred to as legal risk. This is not limited solely to risk from failure to
comply with consumer protection laws; it encompasses all laws as well as
prudent ethical standards.

4. Reputation Risk
 Reputation risk is the risk to earnings or capital arising from
negative public opinion.
 This affects your ability to establish new relationships or
services, or continue servicing existing relationships. This
risk can expose you to litigation, financial loss, or damage to
your reputation.
 Reputation risk exposure is present throughout the
organization and is why you have the responsibility to
exercise an abundance of caution in dealing with your
customers and community.
 The assessment of reputation risk recognizes the potential
impact of the public’s opinion on your company’s value.
This risk is inherent in all activities.

5. Why are we here?

6. Important But We’re Not Going to Cover
 Antitrust Violations
 Copyright Violations
 Trademark Violations
 FACT Act
 Security of Sensitive Personal Information
 Gramm-Leach-Bliley
 The Financial Privacy Rule
 Safeguards Rule
 Pretexting Provisions
 Privacy
 Spam
 Communications Decency Act 230(c) Immunity
 Predatory Lending

7. Topics We Should Cover
 Unlicensed Activity
 Mortgagee Letter 2011-17 - Use of
HUD/FHA Logo, Name and Acronym in
Advertising
 Federal Trade Commission Advertising
Guidance
 Fair Housing

8. Unlicensed Activity
 Arizona Rules and Regulations
 A person shall not act as a mortgage broker,
mortgage banker or loan originator if the person
is not licensed pursuant to ARS 6-901, 6-941, or
6-991.
 Mortgage Loan Originator Prohibited Acts
A loan originator acting on the loan originator's own
behalf shall not advertise any solicitation of mortgage
business. (A.R.S. 6-991.02.3)

9. Unlicensed Activity
A loan originator shall not advertise for
mortgage business in any manner without all of
the following: (A.R.S. 6-991.02.14)
(a) The name and license number of the employing mortgage
broker, mortgage banker or consumer lender.
(b) Approval of the employing mortgage broker, mortgage
banker or consumer lender.
(c) The Unique Identifier that the loan originator maintains
with the nationwide mortgage licensing system.

10. Unlicensed Activity
Arizona Administrative Code:
Directly or indirectly makes, negotiates, or offers to make or negotiate" and "Directly or indirectly
making, negotiating, or offering to make or negotiate," as those phrases are used in A.R.S. 6-
901, 6-941, or 6-971, mean:
Providing consulting or advisory services in connection with a mortgage loan transaction,
mortgage banking loan transaction, or commercial mortgage loan transaction;
To an investor, concerning the location or identity of potential borrowers, regardless of whether
the person providing consulting or advisory services directly contacts any potential borrowers; or
To a borrower, concerning the location or identity of potential investors or lenders.

11. Unlicensed Activity
NOTE: This rule is the basis of the Arizona Department of Financial Institutions determination that it is illegal to buy or
sell mortgage leads from an unlicensed company. See
http://www.dorothydumnichconsulting.com/DIDYOUKNOW1.asp
Arizona Administrative Code:
Directly or indirectly makes, negotiates, or offers to make or negotiate" and "Directly or indirectly
making, negotiating, or offering to make or negotiate," as those phrases are used in A.R.S. 6-
901, 6-941, or 6-971, mean:
Providing consulting or advisory services in connection with a mortgage loan transaction,
mortgage banking loan transaction, or commercial mortgage loan transaction;
To an investor, concerning the location or identity of potential borrowers, regardless of whether
the person providing consulting or advisory services directly contacts any potential borrowers; or
To a borrower, concerning the location or identity of potential investors or lenders.

12. Use of HUD/FHA Logo, Name and
Acronym in Advertising
 Mortgagee Letter 2011-17
 April 15, 2011
This Mortgagee Letter communicates requirements to mortgagees regarding
the use of the official logos, names and acronyms of the U.S. Department
ofHousing and Urban Development (HUD or the Department) and the Federal
Housing Administration (FHA) within devices used to advertise or promote
the business products or operations of FHA-approved mortgagees.
… a “Device” constitutes a channel or instrument for soliciting, promoting or
advertising FHA products or programs.

13. Use of HUD/FHA Logo, Name and
Acronym in Advertising
Under 202 and 536 of the National Housing Act (NHA), HUD
may impose sanctions, including civil money penalties, for
misuse of the terms
 “Federal Housing Administration,”
 “Department of Housing and Urban Development,”
 “Government National Mortgage Association,”
 “Ginnie Mae,”
 the acronyms “HUD,” “FHA,” or “GNMA,”
 or any official seal or logo of the Department of Housing and
Urban Development.

14. Use of FHA Logos
FHA-approved mortgagees may display the official FHA Approved Lending
Institution logos on a Device for the purpose of describing … the types of loan
products offered by the mortgagee.
… must be displayed in a discreet manner.
… must, in each instance, be accompanied by a conspicuous disclaimer that clearly
informs the public that the mortgagee authoring the Device is not acting on behalf of or
at the direction of HUD/FHA or the Federal government.
The disclaimer should be prominently displayed in a location proximate to where the
FHA Approved Lending Institution logo(s) is displayed.

15. Official FHA Approved Lending
Institution Logos

16. Use of FHA Logos
FHA-approved mortgagees may display the official FHA Approved Lending
Institution logos on a Device for the purpose of describing … the types of loan
products offered by the mortgagee.
… must be displayed in a discreet manner.
… must, in each instance, be accompanied by a conspicuous disclaimer that clearly
informs the public that the mortgagee authoring the Device is not acting on behalf of
or at the direction of HUD/FHA or the Federal government.
The disclaimer should be prominently displayed in a location proximate to where the
FHA Approved Lending Institution logo(s) is displayed.

17. Use of FHA Logos
The Device, when taken as a whole, shall emphasize the HUD-registered business
name, alias or d/b/a of the mortgagee and not the Federal government.
… the Device shall be written, formatted and structured in a manner which clearly
identifies the mortgagee as the sole author and originator of the Device.
Specifically, the Device should reflect
the mortgagee’s name,
location
and appropriate contact information.

18. Use of FHA Logos
… strictly prohibited from displaying the official FHA Approved
Lending Institution logo(s) in a location or manner within a
Device that creates the false impression that the Device is an
official government form, notice or document or that
otherwise conveys the false impression that the
Device is authored, approved, or endorsed by the
Department or FHA.
Furthermore, alteration or modification of the FHA Approved
Lending Institution logo(s) is strictly prohibited.
** If you’re not FHA approved, you can’t use any of the logos **

19. Use of FHA Logos
Moreover, use of the FHA logo is strictly prohibited. No person,
party, company, or firm, including FHA-approved mortgagees,
may use the FHA logo.
= BAD!

20. Use of HUD Seal
FHA-approved mortgagees, non FHA-approved mortgagees and
Third Party Originators are not permitted to display the official
HUD seal or any other insignia that imitates an official Federal
seal on any Device.
= BAD!

21. Use of HUD/FHA Names and Acronyms
FHA-approved mortgagees may not purport or imply that as a result of their
approval to participate in FHA programs that their business products or
services are coming directly from HUD or FHA.
The use of the words “federal,” “government,” “national,” “U.S.
Department of Housing and Urban Development,” “Federal Housing
Administration,” and/or the letters “HUD” or “FHA”
… in a manner that falsely represents that the mortgagee’s business services or
products originate from HUD, FHA, the Government of the United States, or
any Federal, State or local government agency is strictly prohibited.

22. Use of HUD/FHA Logo, Name and
Acronym in Advertising
Must retain copies of any Device related to FHA programs for a two years.
Failure to follow HUD/FHA requirements as outlined in this Mortgagee Letter
may result in sanctions, including civil money penalties or administrative
action against any person, party, company, firm, partnership or business,
including non FHA-approved institutions and individuals.

23. Federal Trade Commission
Advertising Guidance … FRAUD
 Misrepresentation:
 Misrepresent material facts
 Make false promises
 Puffing: usually not considered
misrepresentation … an opinion that is not
necessarily intended as a representation of
fact “best customer service in town”

24. Questions to Consider
• Does your advertising make your customers
satisfied that they do business with you?
• Are you avoiding impossible promises and
guarantees?
• Are your advertised merchandise or programs
readily available?
• Do you mean to sell what you advertise?

25. Questions to Consider
• Do your ads avoid misleading inferences?
• Do your advertised terms agree with the facts?
• Is your advertising easy to understand without
asterisks and fine print?
• Do you believe your own comparatives?
• Would you be attracted by what your ad says?

26. Clear and Consipicous
 FTC Dot Com Disclosures
http://business.ftc.gov/documents/bus41-dot-
com-disclosures-information-about-online-
advertising

27. Reg Z: Misleading Statements and
Misrepresentation
Prohibits:
 Making any statement that the product offered
is a “government loan program”, government-
sponsored loan”, or is otherwise endorsed by
the government.
 Using the term “counselor” in an
advertisement to refer to a for-profit …

28. Triggering Terms Requiring Disclosure
 The amount of the down payment
 The amount of any payment
 The number of payments
 The period of repayment
 The amount of any finance charge

29. Terms That Do NOT Trigger Required
Disclosures
 “No down payment.”
 “12% Annual Percentage Rate loan available
here.”
 “Easy monthly payments.”
 “FHA financing available.” or “100% VA
financing available.”
 “Terms to fit your budget.”

30. Required Advertising Disclosures
 If any triggering terms are used in an ad, all of
these disclosures must be made:
 Amount or percentage of down payment
 Terms of repayment
 APR (spelled out in full); if the note rate may
increase (e.g., ARMs), that fact must also be
disclosed
 If an ad discloses on the APR, the additional
disclosures are not required

31. Federal Fair Housing Act or Title VIII of
the Civil Rights Act of 1968
A. Prohibits discrimination based on:
1. Race
2. Color
3. Religion
4. Sex
5. National origin
6. Disability
7. Familial status
B. Covers all housing transactions and services including advertising,
rentals, sales, lending, and insurance, as well as harassment.
C. Prohibits using discriminatory advertising or any other notice that
indicates a limitation or preference or intent to make any limitation,
preference, or discrimination.

32. IMPLY vs. INFER
IMPLY = to put the suggestion into the message (sender implies)
INFER = to take the suggestion out of the message (receiver infers)
IMPLICATION = what the sender has implied
INFERENCE = what the receiver has inferred
http://youtu.be/OV-CI4sG_eo

33. Fair Housing in Advertising
 Prohibits using discriminatory
advertising that indicates a limitation or
preference.
 Advertising can not convey a message
• preference for or against any protected
group, whether through words, pictures or
other images.

34. Fair Housing in Advertising
 Use of Words, Phrases or Symbols
 The use of words, phrases, and symbols to convey
overt or implicit discriminatory preferences or
limitations is prohibited.

35. Fair Housing in Advertising
catchwords - words and phrases used in a discriminatory context
should be avoided. (e.g. restricted, exclusive, private,
integrated)
Catchwords convey preferences for one group over another or
send signals about a community's makeup.
symbols and logotypes which imply a protected class

36. Fair Housing in Advertising
colloquialisms - words or phrases used regionally or locally that
seeks to imitate informal speech which imply or suggest a
protected class
Colloquialisms or colloquial language is considered to be
characteristic of or only appropriate for casual, ordinary,
familiar, or informal conversation rather than formal speech
or writing.
Be careful with Slang or Dialect

37. Human Model Advertising
 Real estate and Lending advertising including photos or
drawings may not be used to indicate exclusiveness.
 Should be clearly definable as reasonably representing
majority and minority groups in the metropolitan area, both
sexes, and when appropriate, families with children.
 Should portray persons in equal social settings and indicate to
the general public that the housing is open to all without
regard to race, color, religion, sex, handicap (disability)
familial status or national origin, and is not for the exclusive
use of one such group.

38. Equal Housing Opportunity Symbols
 All advertising for the sale, rental, or financing of housing
should contain an equal housing opportunity logo, statement
or slogan.
 Logo or statement should be a part of each advertisement and
should be placed in visible location and be a comparable size
of other symbols or text used in the advertisement.
 Applicable to advertisement for sale, rental and financing of
housing.

39. Ragin v. The New York Times
Ragin v. The New York Times Co., 923 F.2d 995 (2d Cir.), cert. denied, 502
U.S. 821 (1991):
The New York Times, a publisher, was found in violation of the Fair
Housing Act for the longstanding practice of allowing the publication of
advertisements using "human models" that did not reasonably represent
the percentage of blacks and other minorities in the New York City
metropolitan area.
The ruling showed that a plaintiff alleging discrimination need not
establish that the defendant intended to express a racial preference in the
ad.

40. A.R.S. 32-2163 D.
Note: the offering of real estate
brokerage services for
compensation in Arizona through
a website requires licensing by
ADRE (A.R.S. 32-2163 D.)

41. Things to Consider
 Email correspondence
 Websites
 Blog correspondence (posts and comments)
 Links to 3rd Party Sites
 Real Estate Advice Online Services
 Zillow Advice, Trulia Advice. Yahoo!
Answers, LinkedIn Answers
 Interaction in online communities and social
media platforms
 Facebook
 Twitter