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Web Sites and Loan Rates

Question: 
Some of the mortgage loan rate sheets that I see advertised, particularly on Web sites do not seem to contain all the required disclosures. Once a triggering term is included, is there some way around providing the terms of repayment (payment schedule) in a rate sheet context when it is made available to the public? It seems that some rate sheets provide sample calculations, which is what I read the regulation to require - yet other rate sheets do not include any reference to the payment amounts. Any guidance or recommendations about how to get out of providing this level of information in a generic rate sheet style ad is appreciated.
Answer: 

Answer by Richard Insley:
There is an epidemic of illegal mortgage rate advertising online. Reg Z clearly requires an advertiser to include a representative example of the terms of repayment when a trigger term is mentioned. The Commentary to Section 226.24 is crystal clear on this point. Just because it is common industry practice to ignore this rule does not excuse violations. As regulators finally get around to testing bank websites for compliance, they usually cite these problems as Reg Z violations.

Answer: 

Answer by Andy Zavoina:
I agree with Richard. Paying attention to detail is becoming a lost art in many Web site disclosures. When one does it others think it must be OK. In fact, it just hasn't been caught yet.

To avoid all the required disclosures you have to stay away from the triggering terms. You should either do it right, or just advertise a number to call for rates and disclosures. The good there is that you don't hurt yourself if your rates are higher than other lenders the person is shopping. The bad is that you have to get them interested enough to call.

First published on BankersOnline.com 4/1/02

First published on 04/01/2002

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