Will Our State’s Regulations Kill Mortgage Blogs?

The Dodo - Didus ineptus Raphus cucullatusI recently had a local mortgage originator contact me because his company is requiring that he takes his mortgage blogs off-line.  His employer told the MLO that it was due to recent Washington State regulations.   In my opinion, his employer probably wants one less thing to worry about in this day and age of trying to operate a mortgage company so telling mortgage originators they cannot blog is much easier than making sure their blogs and outside websites are compliant.

Washington State mortgage originators, are you aware of these rules?  WAC 208-660-446 went into effect November 5, 2010.

When I advertise using the internet or any electronic form (including, but not limited to, text messages), is there specific content advertisements must contain?

Yes.  You must provide the following language, in addition to any another, on your web page or any medium where you hold yourself out as being able to provide the services…

(3) Loan originator web page.  If a loan originator maintains a separate home or main page, the URL address to the site must be a DBA of the licensee and the licensee’s name must appear on the web page.  The page must also contain the loan originators NMLS number and a link to the NMLS consumer access web page for the company….

(5) Oversight.  The company is responsible for the web site content displayed on all web pages used to solicit Washington consumers, including main, branch, and loan originator web pages.

I’m fortunate that my employer does allow me to blog.  Back in the Spring of 2010, during a scheduled audit with DFI declared my blog to be an unregistered trade name.   We did register my mortgage blog with the NMLS, which included paying additional licensing fees.

There is so much for consumers to be aware of and I find that blogging actually helps me to be a better mortgage originator.   When you write about various mortgage scenarios as a mortgage blogger, it causes you to research your underwriting guidelines and to stay current.  I’m constantly looking for “the latest” information for new content to share with my readers.  I seriously cannot imagine not being able to blog about mortgages.

I don’t blame this mortgage originators employer for not wanting to manage the content of their employee’s blogs.   However it’s a sad day when a good mortgage blog is removed from the internet.   I can’t tell you how many consumers thank me for writing and sharing reliable information about mortgages.  A quality mortgage blog provide current guidelines and trends to consumers and real estate professionals. 

If mortgage blogs in our state cease to exist, I suppose people will need to rely on what banks want them to think about mortgages, which I’ve found to be misleading on several occasions.

This entry was posted in Industry Talk, Law, Mortgage/Lending, Washington State Law by Rhonda Porter. Bookmark the permalink.

About Rhonda Porter

Rhonda Porter is an NMLS Licensed Mortgage Originator MLO121324 for homes located in Washington state. Her blog, The Mortgage Porter, is nationally recognized for sharing relevant information to consumers about mortgages. She has been originating mortgages since 2000 at Mortgage Master Service Corporation #40445 Consumer NMLS Website: http://www.nmlsconsumeraccess.org/TuringTestPage.aspx?ReturnUrl=/EntityDetails.aspx/COMPANY/40445 NMLS ID 40445. Equal Housing Opportunity. You can follow Rhonda on @mortgageporter, Facebook and/or Google+

18 thoughts on “Will Our State’s Regulations Kill Mortgage Blogs?

  1. The rules are not designed to kill good mortgage blogs. If the blog is providing accurate, truthful information that comports with licensing laws and state/fed mortgage lending laws, the employer can choose to allow that blog to continue to serve the community.

    Consumers need to know who is running the blog and employers need to know what their LOs are up to. The rule supports broker/owner/managers in doing their job.

    There aren’t a whole lot of good mortgage blogs because not everyone is a writer. So instead I see the new rule as a way to get rid of more bad mortgage blogs, leaving the field wide open for blogs like yours.

  2. Jillayne, I know the rules are not designed to kill mortgage blogs, however it is the unintended consequence that will since companies are responsible for what the employee/mortgage originator writes.

    And it’s not just mortgage blogs that this impacts…my interpretation is that these guidelines also apply to LO’s Facebook profiles, LinkedIn…etc… anywhere on the internet where they present themselves as being a mortgage originator.

  3. Rhonda, that is pretty sad. Jillayne doesn’t seem to get the intent versus reality hence our constant battles regarding LO compensation. But I digress…

    Smaller companies don’t seem to spend as much time worrying about if their LOs blog or not. However, larger companies definitely don’t want the liability. The reality is the company or LO could be hung out to dry even if something wasn’t intentional. Regulators have a way of making a mountain out of a mole hill to justify their jobs.

    All of this is just driving up the cost for consumers and only the tip of the iceberg.

  4. Russ, I think we’re going to see a ton of movement in our industry as we near April 1 if LO’s are unhappy with the compensation and possibly, if they are allowed to blog or not.

    Being allowed to blog is probably just as important to me as my compensation structure… a majority of my clients are those who seek me because of the content and information that I have freely provided to them. It is too bad that some employers are going to squelch their LO’s words.

    Many LO’s are going to be dumbed down to just being “ap takers” instead of knowing how to process, underwrite and CLOSE a loan due to regulations like this and the compensation changes. If the economy was better, you’d probably see a mass exodus of mortgage originators into other fields… and I’m not knocking (most) of the LO’s… this job isn’t what it used to be.

    Jillayne is correct that as more leave or are silenced because of not being allowed to blog, that will be better for those of us remaining.

  5. You LO’s have a tough enough job as it is. The banking industry is slowly, steadily legislating the independent brokers out of business. If an employer decides they don’t wish for an individual to speak on behalf of the business, that’s reasonable. If the state is adding pressure then that’s not okay. It begs the question, ‘why?’ and ‘who?’. Who benefits from this kind of regulation?

    Does the consumer benefit from restricting speech? It seems there are more than ample laws on every state’s books to punish originators if they step out of line. Do the large banks benefit from this restriction of speech? They have plenty of marketing they can afford to pay for to reach consumers so they don’t have to worry about whether or not they blog.

  6. Dave, last night I watched Food Inc and it struck me how the small independent farmers are being driven out of business by a few very large corporations… very similar to how a few giant banks are silencing the smaller independent mortgage brokers/lenders.

    If you follow the dollar, a lot of this boils down to powerful lobbiest at work… really pathetic.

    I highly recommend folks watch Food Inc so they can see our government at work and how giant corporations control them…and therefore us.

    We have the power to vote with our feet and our wallets… I’m just returning from the West Seattle Farmers Market 🙂 I much rather prefer to support small business than large corps.

  7. BTW Banks do NOT want consumers knowing how mortgage originators are truly paid… with the new compensation laws coming up, although it will appear as the bank LO’s are not making that much on that transaction, in truth, many will be paid on volume unattached to a specific transaction, yet the more “deals” a LO closes, the more they’ll compensated. This will not be disclosed anywhere that I am aware of to the consumer.

    How does closing as many “deals” as possible benefit a consumer? It doesn’t. It turns the consumer into a cog. I see no benefit in this.

  8. Amen Rhonda! I feel the same way; I’ll always go out of my way to support independent and local businesses whenever I can. They have to provide a good product at a fair price still BUT given those two requirements are met, I am going to be a repeat customer.

    What galls me about this constant pressure the giant banks are putting on independent LO’s (through lobbyists and govt) is that WE the tax-payers of the U.S. had to pay dearly to bail out most of these mega-banks. When will sanity return?

  9. It has bothered me for a long time that people who are in my business of Real Estate don’t understand the business.

    Tim Kane put on another rant against Ray Pepper for him saying people will walk away from mortgages in droves, which they will.

    Mike Carpenter put up a Real Estate group on Face book today, added his network of friends then got shouted down as a spammer from Real Estate professionals.

    Then there is this post about how big banks are taking over the Loan Origination business and in the process stifling free speech. You must know that the internet is used for lead generation, so yes, it’s a good idea to have Loan Origination blogging policed to ensure high quality, and accurate information is being put out there.

    It was a fine article that normally wouldn’t bother me until you referred to Food Inc.

    Over on Seattle Bubble there was some discussion about food shortages, speculation, commodity prices and ultimately my point about food riots that happened in 2008, and will happen again.

    Real Estate is a business. There are 30 year, and 15 year mortgages with an interest rate to be locked in. That is loan origination.

    The business of building a Real Estate is coming out money ahead. Equity means to sell for more than is owed on a property. There are financial considerations of what the cost of the money is in relation to the return on the invest. If a person pays 30 years on a mortgage, which doubles the purchase price there is no return.

    Real Estate is a business on both sides. The bank wants to make money, but the property owner also needs to make money. Buying a property is a small business. It is all numbers. It is all return on investment.

    You have a mortgage to hold, and control a property. The only leverage you have is from an equity position. There are a lot of terms thrown around that have nothing to do with owning a property or building equity.

    Ultimately the mortgage has to do with the security of the asset against money invested by the lender. The lender’s recourse is to foreclose. In the future there will be less emphasis put on the ability to pay, and more concern about the resale of the property.

    In other words, the friendly face getting people to sign a mortgage for more than a property is worth are quickly coming to a close.

  10. David, I think you’re missing my point…again. Did you read the post or just scan the comments? For me, any business that I receive from my writing efforts on the internet is truly a side benefit. If my business ceased to exist and I could no longer originate mortgages (and I hope that never happens) then I would still write and post on my blog.

    There are terrible and misleading advertisements all over the internet—including here at Rain City Guide with the “sponsors” that Dustin has added. That’s tougher to regulate and should be.

    It’s a lot easier to go after an individual and it’s even easier for a company to just tell their employees that they can no longer blog because either (1) they don’t want to deal with the extra compliance and/or risk levied by our government and/or (2) they don’t want to have their employees having an independent voice.

    And that, David, is the issue I’m addressing in this post.

  11. David Losh –

    It also bothers me when I sense that some people in real estate also don’t understand the business.

    I didn’t “rant” at all. My comment was that I find it troubling when I see people in our industry talk about real estate with the rhetoric of it being a “game” and “working the system.” If you read further, I also mentioned that it was not a personal comment regarding Ray himself. Rather, it was geared toward the “culture” in our industry that needs a serious overhaul.

    Real estate is all about money money money money. You never have a seminar or clock hour course about RISK.

  12. How about the person who contacted me… he’s someone who I consider to be one of the “good guys” in the mortgage industry. I believe he truly cares about his clients and, like me, used blogging to help get important, accurate inforamtion to consumers about mortgags and the mortgage industry… now his blog is gone.

    I know of other solid LO’s who’ve had the same thing happen. Neither were shut down by the gov. both were by their employer. Ther person I wrote about was directly due to WA state’s laws and his employers reaction to them. The other LO worked for a bank and once the bank discoverd it, told him to shut it down.

    I do think it’s tragic to have blogs that are resourceful for consumers wiped off the web and/or no longer active. How does it help the consumer?

    How about the loss for those LO’s? I’ve had my mortgage blog since 2006 and on Mortgage Porter alone, I have well over 1200 articles I’ve written and posted. What if my employer or the government told me to shut it down?

  13. “How about the loss for those LO’s?
    I’ve had my mortgage blog since 2006
    and on Mortgage Porter alone, I have
    well over 1200 articles I’ve written
    and posted. What if my employer or the
    government told me to shut it down?”

    I believe the most descriptive term is death by a thousand tiny cuts, Rhonda. Taking away the tools of your trade might not close your operation immediately but it definitely makes it more difficult to generate new business. It seems like restricting commerce is the underlying aim of this rule – all in the name of ‘protecting‘ the consumer. This is achieved by a threat of governmental sanctions on businesses. They don’t have to say ‘You cannot have a blog!’. All Government has to say is ‘WE WILL PUNISH YOU AND FINE YOU IF…’ to a business and it achieves the same end. Businesses decide they cannot afford the risk of the Government finding them at fault so it makes more sense to restrict their LO’s. Pretty neat, huh?

    Competition in the marketplace is always a better thing for consumers. Restricting the ability of any independent businessperson to interact with the public is not in the best interest of anyone and necessarily dictates higher prices and fewer choices to the consumer.

  14. Yes you are missing my point. Yes big banks are taking over the loan origination business. That’s a done deal.

    Dave, you have a little diatribe going on yourself.

    It’s possible that I’m paranoid, but it did occur to me several years ago that it was possible that commenters on a blog could direct a discussion. It also occurred to me that some blogs are a complete sham from article to comments to end result.

    So Rhonda, I do believe, now, after seeing you, and talking with Ardell, and meeting Jillayne, and yes you Tim, that you are good people.

    Other people who have web sites, and who blog for business I have found to be less than honorable. They have wormed their way into Real Estate from corners of the used car lot.

    It bothers me.

  15. David, there are some bad blogs… a local title company has been creating blogs with totally canned content and they even do updates for the agents/LOs on Twitter and Facebook…this is a slap in the face to “social” media in my opinion… however the content is harmless. There’s nothing controversial or thought provoking…all articles are “safe”. Seeing this happen bothers me however I’m afraid it’s a trend that will be around because some people would rather have an “easy button” instead of doing work themselves.

    As far as blogs with bad information, this is an issue — it’s no different than misadvertising that takes place on TV or radio ads or the internet (as I mentioned previously, I’m not happy with some of the ads that are now on RCG)…yet these ads continue. Jillayne commented on my FB profile that Paramont Equity is back on the radio w/his creepy smooth voice oozing low rates without including APR. I’m seeing some local lenders quoting rates that I know are not available (I’m assuming the site is not updated daily yet the date changes so it looks like “todays” rates when they’re not)…and they use the terms “lowest rates” which is illegal in WA state.

    These things are issues… but to have mortgage blogs cease to exist is potentially dangerous for consumers…leaving them in the dark to rely on a greedy bank for a flashlight to find some truth or real details.

    I’d much rather tolerate the bad with the good than have it all, including the good, eliminated.

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