Whether you’re a loan officer, agent or compliance manager, you’re involved with residential mortgage marketing. It’s likely you’ve encountered this frustrating scenario:
A loan officer and real estate agent get together and decide to put together co-branded marketing material, like a mailer.
They write out their message and compile a list of recipients.The mailer is designed by the agent’s marketing department. The loan officer agrees to pay half the cost.
Now all they need is a quick compliance approval on the loan officer's side, and they’re off, right?
Unless of course, the races don’t begin for two to six weeks. The frustration begins here, but sometimes it doesn't end until much later (or until the project is abandoned).
Compliance Approvals For Loan Officers
A couple weeks pass, and the mailer still hasn’t gone out. The loan officer is frustrated, because the partnership he or she has with the agent isn't moving forward. Sadly, it's stuck where the mailer is.
The process seemed to have been more of a hassle than anything else, which could hurt the chances of co-marketing again in the future. Talk about missed opportunity.
Marketing Managers Get Frustrated Too
Meanwhile, back at corporate, the marketing manager is pulling his or her hair out in frustration because the mailer that was submitted couldn’t possibly be approved in its current state.
Branding is all wrong. The logo is distorted and the verbiage just isn't in line with the company standards. Not to mention, this could be a compliance nightmare.
She doesn’t have access to the art, so she’ll have to hunt down the designer and go back and forth trying to get the mailer in good enough shape for submission to compliance.
She’s already understaffed and can’t understand why the loan officer didn’t talk to her about the project before creating art and making commitments to a member of their most important client base.
Compliance Managers Want To Approve That Mailer
Once the painful back and forth of getting the mailer corrected is complete, it’s time for the compliance officer's approval.
The marketing manager asks for a rush, but in reviewing the mailer, the compliance officer notices that the messaging could be viewed as deceptive by a regulator unless additional disclosures are added.
She sends the required changes back to marketing, who then must request additional changes from the agent's designer and resubmit for compliance approval.
The compliance officer doesn’t understand why marketing keeps asking her to drop everything to review these one-off pieces that seem to always require additional changes.
She wishes marketing could just get it right the first time or use material that’s already approved.
If Approvals Stagnate, The Agent Moves On
Let’s not forget about the real estate agent.
The agent wants to be compliant and do things the right way, but this is ridiculous. The mailer was a “Just Listed” postcard, and the house has already been sold.
The agent wonders why it has to be so hard to co-market with lenders and can’t understand why they don’t try harder to work with her.
She could market her services with any number of lenders, and begins to wonder whether this one truly understands her challenges and values her business.
Finding a Better Way to Obtain Fast Approvals
Not one person wins in the scenario described above. So, what can be done to fix the situation and speed up the mortgage marketing and compliance approval process?
What are the basic mortgage marketing compliance elements that need to be included in your co-marketing pieces as their being designed?
Every lender and every marketing piece will be a little different, but these five tips help ensure you’ve covered the basics and should eliminate much of the time-consuming back and forth that tends to take place during a lender’s marketing and compliance review process.
1 - Make sure you consider RESPA Section 8 compliance before you agree on how to split marketing costs.
Keep this simple rule in mind: Any costs associated with the co-marketing need to be split proportionally, not necessarily equally.
This means that if the lender has 25 percent of available space allocated to its branding and messaging, then the lender only pays 25 percent of the cost.
There’s a common misconception that all co-marketing can be split 50-50 across the board, but that’s simply not the case.
Each co-marketing party needs to pay its proportional share of costs, so designing your co-marketing piece accordingly eliminates the need for changes later.
2 - Be sure to include the lender’s basic disclosures on your co-marketing piece.
This will almost always include the loan officer's NMLS ID and the Equal Housing Lender or Equal Housing Opportunity logo.
Check to see which one the lender uses.
Always include the lender's standard legal disclosure. In some cases, a lender may be required to include state-specific disclosures as well.
If you’re not sure what these are, ask for them, or at a minimum, leave space for them in the design.
Also, make sure the EHO/EHL logo is large enough so that the words are legible, and make sure the disclosures aren’t so small that they can’t be read.
3 - Consider the content and don’t make outrageous claims
Follow this rule of thumb: If any reasonable person could possibly be deceived by the mortgage marketing message, don’t include it.
In addition, make sure it’s clear who is providing which service. For example, if the agent is offering a free home inspection, make sure it’s clear that the offer is coming from the agent, not the lender.
If the lender is offering a free service, make sure it’s really free and approved by the lender, not something the client would pay for in the form of a higher interest rate.
And try to avoid including rates or payments if at all possible.
All of these things are going to trigger additional disclosures or modifications by the lender's compliance team and slow down the approval process.
If you’re unsure about your content, ask first. It save's you a ton of hassle down the road.
Oh, and one last thing… if you include a website address for a site that features the lender as a co-marketer, make sure the site has been reviewed and approved by the lender or do not include it on your marketing piece.
This can open a big can of worms and really slow things down because the lender may want to make sure the website is compliant prior to approval.
4 - Use high-resolution logos and images, and attach the original artwork file with your request for lender approval whenever possible.
Like the agent, the lender's marketing team needs to protect their company’s brand, so including a low-resolution, stretched image of the logo or other lender-related elements is likely to result in a request for changes.
If you send the original artwork file – one that can be edited – the lender can simply switch out any low-resolution “placeholder” images with the correct images.
Your final product will look much better this way, and it can save you a ton of time.
5 - Be sure to provide all relevant information when you submit the approval request to the lender.
Lenders must keep records of all advertising and will eventually need the information below, so providing it up front speeds up your approval turnaround time even more.
Be advised that the lender needs to keep a record of the final artwork and may request it, along with proof of payments made by each party, after the initial approval is given.
When you submit the approval request, be sure to include the following information:
- How the cost will be split (50-50, 75-25, etc.)
- Where the piece will be distributed geographically (city, state is usually okay)
- When the piece will be distributed (month/s and year)
- How it will be distributed (online, direct mail, publication name, etc.)
- The contact information for the person who designed the advertisement, in case there are questions or required changes.
Although the above practices will require a little more work up front, the time you save going back and forth with changes will be worth it in the long run and helps ensure your co-marketing material reach your target market on time.
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