January 20, 2016
The FHA and HUD have specific rules about how the FHA logo may be used by lenders and advertisers. To the typical loan applicant, this may seem to be completely irrelevant. The initial reaction to this information is likely to be, “So what?”.
But if you receive third-party advertising, or see ads with the FHA logo used improperly, it may be an indication that there’s a potential scam in progress.
Not all improper use of the FHA logo is evidence of fraudulent activity–sometimes ignorance of the FHA regulations that cover use of the government’s logos is a factor. But other times there may be a deliberate attempt to mislead a potential customer into thinking that the advertisement or offer is government-approved, government-sponsored, or government initiated.
What do FHA loan rules say about the use of the FHA logo?
According to HUD 4000.1, “The FHA-Approved Lending Institution logo must be displayed in a discreet manner. The Advertising Device, when taken as a whole, must emphasize the institution or DBA (Doing Business As) name of the Mortgagee, and not the federal government.”
When it comes to advertising that features the FHA logo, HUD 4000.1 says, “the Mortgagee must include a conspicuous disclaimer that clearly informs the public that the Mortgagee displaying the Advertising Device is not acting on behalf of or at the direction of HUD, FHA, or the federal government.”
Such a disclaimer must be “prominently displayed in a location proximate to where the FHA-Approved Lending Institution logo is displayed on each Advertising Device. The Mortgagee may not alter or modify the FHA-Approved Lending Institution logo in any way.”
Furthermore, FHA loan rules cover ad behavior by “sponsored third party organizations” or “TPOs”. HUD 4000.1 states, that third-party advertisers, “…are prohibited from engaging in any activity or authoring or distributing any Advertising Device that falsely advertises, represents, or otherwise conveys the impression that the sponsored TPOs business operations,products, or services either originate from or are expressly endorsed by HUD, FHA, the government of the United States, or any federal, state or local government agency.”
These are important rules to keep in mind when you get advertising that claims that a government agency has “approved” you for certain loan programs, foreclosure avoidance, mortgage loans, refinancing, or reverse mortgage loans.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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