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The state's Services says the new rules will target mailings and other solicitations touting lowerfmortgage rates. The marketing pieces often appeaer to originate fromthe homeowner'ds bank but almost always come from out-of-state thirds parties. Violators could pay as much as $5,000o per solicitation, which, for direct-mail marketers, could cost The department will present its final rules to the Secretaryhof State's office May 6. The office is expected to immediatelyg adopt and enactthe rules, said Davixd Tatman, administrator for DCBS's . The state receivec 131 complaints about such solicitationsin 2007. Through Marchy 2008, regulators have fielded 34 such complaints.
Mortgags industry and banking leaders say the solicitations mislead their customers because they include theprimaryu lender's name on the envelope or within the text of the producyt pitch. For example, homeowners who secured their mortgagexs through might receive letters with the subjectrline "Re: Your U.S. Bank loan." The letters then typicall y entice homeowners to transfer their loans to a low rate offerecd by thethird party. "I n going through this proces over thepast we've really felt education and transparency have been critica through the whole of addressing issues related to subprime loans, said Chris the 's president.
"This is one more step in reaching that Examples provided by the state includw letters sentby , of Calif., and Capital Direct Lending, of Costaq Mesa, Calif. "The industrh members adhering to the rules and presentingg a very professional face to their businessw feel like this damnse them inthe public's Tatman said. Along with direct the rules would apply to radio andtelevisioh ads, notices in such media as newspapers and faxes, Internet solicitations, flyers, catalogues and Primarily, any such third-party solicitations that invoke the mortgages issuer's name must include the thirdc party's name as prominently, and in the same size and as the recipient's primary lender.
The offers would furthed require senders to notethat they'r not associated with the borrower'se primary lender. Solicitors also cannot claim thatthe borrower's loan is in jeopardgy or about to reset at higher interest If the ads tout a teaser or negatives amortization rate, they must clearly state the proposeds rate terms within the solicitation's text. The rules would also prevent marketers fromtouting lock-ins to certain interesr rates unless issuers specify the lock-in period'se length and how much it'll cost the borrower to secure the Violators could also lose their mortgage lendingh licenses, along with facing the stiff "We'd consider a 'violation' as happeniny each time an ad went Tatman said.
"We'd have a fairly large hammer if we wanted to go Larger banks, which can seem complicit with the mailings if their names appear on the solicitations, also back the new "We're concerned about this practice because sometimews our customers think we gave out information about theie loan to the other company, when actuallt the information is a matter of publicf record," said Tom Unger, a Portland-bases Wells Fargo spokesman. "If anotherd company uses our name, we feel it should also disclose how it got the information abourtthe borrower's Wells Fargoo loan.
" Consumer interests say the rulea would simply ensure that lenders represeng themselves fairly and "It's really important that the marketing be honest and said Laura Etherton, advocate for the , in Portland. "Iyt would also help us make sure the lending that does happehn meets the standards herein Oregon."
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