Mortgage regulators want to know what lenders are offering borrowers on their websites. They’re not just being nosy: they’re working to prevent false and deceptive advertising and unfair trade practices. Promotions and solicitations rank high among the records examined for these kinds of violations. With so much advertising having migrated to lenders’ websites, it’s not surprising that examiners are looking carefully at the claims made on the web. Indeed, many of the advertising rules in mortgage banking specifically mention web-based ads and lenders’ websites.
This regulatory focus on web advertising leads to consequences both simple and complex: Lenders need to be able to document what they put on the web, and when, including records of changes and when they’re made. But how can they do this?
Let’s look at a typical rule to explain why web archiving matters. A mortgage company can’t legally advertise loan terms that are not available to a reasonable number of consumers on the date they’re advertised. So if a drop in interest rates creates an appealing window for refinancing but rates bounce back after two weeks, the lender will want to proactively capture and preserve evidence that a special refinancing offer was removed in a timely manner from the web to be in a position to answer potential bait-and-switch complaints. (Hopefully, the preserved web promotion also disclosed that the offer was temporary.)
Sticking with this example, if the refinance promotion excluded jumbo loans and over 70% LTV loans, in responding to a compliance exam, the lender may be asked to prove these limiting conditions appeared on its website.
Theoretically, there are several ways to keep web history for compliance examinations, but these can be cumbersome, labor-intensive, or both. Screen grabs, printed or maintained in electronic files or emails, can quickly overwhelm record-keepers and examiners. Stylistic changes like font and page layout can seem as significant as substantive loan term changes, even though they’re not, when buried in a file of hard copy printouts. Subtle changes in the legal “fine print,” that are required on websites, including NMLS identifiers and office addresses, can also be overlooked when kept in a mountain of webpage views, making it hard to quickly document compliance with these technical (but important) disclosure obligations.
Newer website features are also a challenge to comprehensive recordkeeping of web activity. Marketing firms are busily promoting the benefits of video on lender websites, to explain loan terms and processes to borrowers. QuickenLoans offers “copy and paste” video snippets for use on mortgage company websites. Screen-grabbed copies of web pages don’t capture embedded video content, but for regulatory purposes, this content may be just as important as the words on a website. They don’t capture all the output of a malfunctioning payment calculator on the website. They probably can’t meaningfully capture all messages initiated at the “contact us” link of the website. Video, interactive calculators, and web-based chat are simple examples of hard-to-capture web records — others will follow. Social media companies and app developers are hard at work creating brand-based emoji for marketing campaigns and other marketing enhancements designed to appeal to consumers. If used, all of these should be part of a lender’s retained records.
Web links present other potentially risky compliance aspects for mortgage lenders, and these should be preserved with other website records (and website change records). Links may imply affiliation between the linked parties; consumers shopping for loans may view them as endorsements or recommended referrals. In the home loan industry, compensated referrals are subject to special scrutiny for reasons including RESPA’s anti-kickback prohibition, limits on loan steering, and the bar on paying unlicensed individuals for loan origination. Examination of lenders’ web-pages for advertising violations could easily lead to examination of linkages in pursuit of other impermissible conduct.
So where does this leave mortgage lenders? Simply put, it leaves them obliged to keep thorough, accurate, time-stamped, immutable records of their web activity. These records will almost inevitably lead to compliance questions that go beyond advertising. The mortgage lending industry faces “more regulation, more often.” In response, solutions for automating the capture of webpages that enable organized supervision/review and retain all archived content in a search-ready, indexed state for easy retrieval can be a powerful tool in a lender’s compliance and discovery readiness toolbox.
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