For the past decade, the social media scene for originators has been compared to the Wild Wild West. A frontier filled with bandits and cowboys, running the town without a sheriff in sight until the Federal Financial Institutions Examination Council arrived. Due to vague regulatory guidance that may or may not be applied to social media, the Wild West has been rampant with noncompliant activity. Compliance folks, here are some numbers to digest: there are over 50 million Facebook pages, over 500 million active Twitter users and over 23.6 million active Trulia users. Loan originators are saying, “How could they possibly find me out here?” This is a common lament from rogue originators. Well, there’s a new sheriff in town; regardless, if we decide to acknowledge it.
On Jan. 22, the FFIEC released a proposal “
To preface, mortgage companies that decide to take the safe route by exiting the Wild Wild West and completely turn off social media are forewarned. The FFIEC has cautioned “a financial institution that has chosen not to use social media should still be prepared to address the potential for negative comments or complaints that arise within the many social media platforms.” In this, lies the good. Social media provides the customer the opportunity to address customer complaints and sentiment.
The Good: Set social media objectives by establishing a policy and process that outlines the company’s overall objective, while maintaining compliance. Many companies focus on gaining an online presence and skip the critical question “What are my employees posting?” An employee posting inappropriate status updates is a direct reflection not only of themselves, but of the company. Lastly, train and enforce your social media policy. Employees will use social media regardless if it is allowed. Conduct ongoing training sessions.
The Bad: Mortgage companies that are adding the bare minimum of compliance (an NMLS license number doesn’t cut it), creating social media policies (but not adhering to them) and “flying under the radar” are in for a rude awakening. State regulators and the CFPB can easily search Google for the keywords “best,” “rate” and “mortgage company” to enforce easy violations. They will most likely, if not already, purchase sophisticated monitoring software to govern the Wild West, a k a the World Wide Web. These programs have the ability to send alerts to the CFPB within a few seconds of noncompliant activity.
The Ugly: When (and it will happen) a borrower has become so distraught that he/she writes a destructive comment on your Facebook page or a rogue originator leaves the company only to leave a mark by writing a damaging review on LinkedIn, be the first to know about it. Set barriers in place to prevent negative messages, posts and comments to be public unless confirmed. Determine the gatekeeper for your company’s social media accounts and invest into a social media monitoring program that allows you to manage your online reputation.
David Zugheri is the co-founder of Houston-based Envoy Mortgage and a member of Mortgage Technology's Editorial Advisory board.
