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FTC Warns On Deceptive Mortgage Ads

December 7, 2012

The Federal Trade Commission (FTC) has issued warning letters to 20 companies, including real estate agents, home builders and lead generators, about possible violations of the Mortgage Acts and Practices Advertising (MAP) Rule.  The letters do not trigger actual enforcement action but rather warn the recipients to insure that their advertising is in compliance with the law and the Rule.

The Rule, which took effect in August of 2011, bans material misrepresentations in advertising or any other commercial communications about consumer mortgages.  The FTC has also created mock ads in order to illustrate improper claims.  Practices that are outlawed include: offering low “fixed” rate mortgages without full mortgage loan terms, implying a government affiliation, or “guaranteeing” approval with low monthly payments without fully disclosing significant strings.  Complete information about the Rule and FTC’s latest effort to encourage compliance, including copies of the mock ads, can be found here.

NAR's 2011 Advisory on the Rule