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The Risks & Rewards of Social Media in Mortgage

Published September 16, 2020

As social media becomes more pervasive, it presents an enormous opportunity to engage on these platforms with potential homebuyers. While it’s thought to be dominated by the younger generation, research shows that individuals of all ages are engaged online, creating a rich pool of opportunity for those interested in entering the waters.

In today’s dynamic landscape, these platforms serve as an extremely powerful business development tool for lenders looking to gain market share. The implementation of a robust social media strategy, both at the corporate and loan officer level, is a huge competitive differentiator, and like any other advertising channel in the mortgage space, is subject to strict compliance regulations.

So we ask, is the risk worth the reward?

As the online space continues to evolve, the FFIEC’s goal was not to create new requirements, but to help financial institutions understand the associated risks and to clarify the applicability of the various advertising laws and regulations that are already in place today. Familiarity with industry-wide regulations and those that are program or geographically specific, will result in better compliance practices and support quick remediation efforts to prevent potential blemishes on your company’s reputation.

Whether you choose to engage online or not, your current customers are there, and so are your future ones. To ensure that you are capitalizing on the upside of social media, it’s recommended that you enact real-time monitoring of trigger terms and/or relevant keywords to avoid any pitfalls and maintain a healthy public perception. Taking a proactive approach to quickly identify issues will support resolution and help to avoid risk exposure that can lead to the following infractions:

Social media violations are a major hot button and the CFPB, FDIC, and other consumer protection agencies. They are actively looking for violations on the platforms that loan officers regularly use. Persistent, improper activity certainly creates negative exposure for an organization.

Costly Fines
Certain social media compliance violations lead to fines in the thousands of dollars, significantly impacting the corporate wallet. With fine thresholds mounting, some may even result in enforcement action and/or cost a company millions of dollars over time.

Reputational Damage
A company’s reputation is at stake when social media activity is non-compliant, or simply fails to address borrower consumer rights. You need to be in charge of your public image with monitoring and enforcement of policy. Don’t leave your reputation in the hands of staff and/or customers.

Whether it’s to inform consumers of the products you offer, demonstrate your impact on the communities you serve, or an attempt to get more homebuyers through your door, social media channels are a highly effective tool. While there are strict regulations governing its use, don’t let that be a deterrent for the immeasurable opportunity that it also bears.

If you are not currently monitoring your online presence and would like to get started, download Optimal Blue’s Social Media Regulations & Monitoring Guidance for a snapshot of key mortgage regulations and examples of mortgage related terms.


Having a difficult time achieving social media oversight? Optimal Blue's Social Media Compliance & Publishing platform can help! It’s flexible, affordable and can be scaled for any size financial institution that falls under the aforementioned governing regulations.