The National Reverse Mortgage Lenders Association issued two new Ethics Advisories which outline the expected standards and practices in selling other financial and insurance products as well as standards for mortgage lead generation activities.
The first Advisory 2009-01 “Ethical Offers of Other Financial and Insurance Products and Services” discusses ethical practices in which members may refer, recommend, originate or sell any other financial or insurance products.
This guidance includes a frame for implementing HUD Mortgagee Letter 2008-24 “Requirements For Mortgage Originators” which outlines the relevant provisions of the Housing and Economic Recovery Act of 2008 (HERA) requirements for firewalls and safeguards in offering any other financial and insurance products. Important points here include the need to act in the client’s best interest and the need to provide a bona fide advantage to the client.
The second Advisory 2009-02 “Lead Generation State Licensing Requirements and Ethical Advertising” outlines ethical practices and expectations in lead generation activities including consideration of state licensing and state laws.
This guidance also communicates NRMLA Ethics Committee’s intention to take action which may include reporting to appropriate government authorities and the public naming of any entities terminated for ethical violations in accordance with NRMLA’s Policy and Procedures.