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Study finds real estate agent-lender partnerships yield lackluster profits

National Mortgage Professional
Jan 26, 2006

Faxing is back, but be careful!: Changes to "junk fax" law restore your right to send legitimate faxesR. Terry MayneJunk Fax Prevention Act Before Congress recessed for the summer, it handed both large and small businesses the equivalent of Christmas in July: the recently passed Junk Fax Prevention Act of 2005. In a bit of delicious political irony, the new law actually restores your right to use faxing as a legitimate business marketing tool, albeit with certain reasonable conditions, including a provision that provides recipients with the option to say "no thank you" to future product or service offers. It was just two years ago that the mortgage industry teamed with a large coalition of other financial services institutions to petition the Federal Communications Commission (FCC) to reconsider its rule under the federal Telephone Consumer Protection Act (TCPA) of 1991 that required businesses to obtain prior written permission before faxing. Even having an established business relationship (EBR) did not constitute "express permission" under the FCC's rules. However, the new Junk Fax Prevention Act provides a needed exemption from the EBR burden, once again opening up a marketing avenue that has been a mainstay of the mortgage brokerage industry. In 2003, for example, the National Association of Mortgage Brokers estimated that mortgage brokers and correspondent lenders originate approximately 60 percent of loans with funding from the wholesale lenders. Lenders provide brokers with up-to-date information, and brokers routinely fax information to real estate brokers and homebuilders who, in turn, provide this information to consumers. In fact, following in the footsteps of the financial services coalition's efforts in 2003, the National Association of Realtors lobbied heavily for changes in the TCPA, arguing that requiring signed, written permission before sending faxes would have forced real estate agents to create and store millions of permission forms to sustain the over six million home sales transactions that occur every year. The junk fax, redefined So, under the new law, what exactly is a junk fax? It depends on whom you ask. The anti-fax lobbying group, JunkFax.org, defines them as "any material transmitted via facsimile that advertises the commercial availability or quality of any property, goods or services, which is transmitted to any person, without that person's prior express invitation or permission." Thankfully, the new law is a little more fax-friendly. Under the guidelines, a fax is not considered a junk fax if: †You have ever had an EBR with the recipient; †You obtained the recipient's fax number directly from the recipient or a public source where the recipient provided the fax number, such as a Web site, an advertisement or a directory; and †Your fax contains a toll-free opt-out number on the first page, so that the recipient can opt out of future advertisements. Established business relationships First, let's examine the legalese. An EBR is defined as "a prior or existing relationship, formed by a voluntary, two-way communication between a person or entity and a business or residential subscriber, with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the business or residential subscriber, regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party." Whew! What does that mean? Simply put, if you've ever done business (or even had a business conversation) with someone and he hasn't told you not to contact him, you can send him a fax, without his consent, any time, day or night. The FCC had pushed for an 18-month time limit on the business relationship, but the new law removed any restrictions. Legally obtained fax numbers The fax number you use must have been provided directly from the person you're sending to, or you must have obtained it from a public source, such as a Web site, an ad that the consumer responded to, a directory the consumer subscribed to, and so forth. But, you're not out of the woods yet. Read on. Opt-out opportunity on page one Even if you're sending a fax to someone with whom you have an EBR and you obtained the fax number legally, you still are required to give the recipient an opportunity to say "no thanks" to any future faxes. The first page of the fax must contain a toll-free number the recipient can call to opt out. Unfortunately, there is no time limit at this point; once a consumer opts out, the action is indefinite. A faxing free-for-all? While this new law is great news for the mortgage industry, wise brokers will use faxes for what they are best designed for--communications that convey a sense of urgency or immediacy--rather than as an opportunity to jump on the junk wagon. One thing is certain, however. The legislative pendulum tends to swing widely and wildly. As Congress reconvenes for the fall 2005 session, they could change their minds, particularly if their constituents back home are bemoaning a resurgence of spam faxes. It's all about self-determination Some of you may still be concerned that the new law is overly cumbersome. Think about this ... Would you rather have the federal government making the decision about who should receive faxes, or would you rather have the decision put where it belongs--in the hands of the recipient? If you're not sure if you're in compliance, check with your legal counsel. Use faxes judiciously, send them legally, give consumers a chance to say no, and everybody wins. R. Terry Mayne is general manager for Equisys Inc., a U.K.-based software manufacturer with a U.S. office in Alpharetta, Ga. He may be reached at (770) 772-7201 or e-mail tmayne@usa.equisys.com.
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