By Catherine Brock Published: November 08, 2007

Instability and reduced liquidity has mortgage lenders and financial firms reaching out to consumers with advertising messages that emphasize strength and stability.

When the waters are calm, an open raft can keep anyone happily floating along. But when a storm rolls in and seas get choppy, that same raft quickly becomes flimsy and inadequate, and drowning is a real danger. In the mortgage industry, as the skies blacken and the swells rise, financial firms are reassuring consumers that they're sturdy enough to weather the storm.

Good times and bad times

As with any industry, the mortgage sector has had its ups and downs. Remember what happened to the Internet sector in the late-1990s? Investors became overly excited about dotcoms, and stock prices went up and up, seemingly without limit. But that pace of growth proved to be unsustainable, just as it did in the mortgage industry. Now, amid a landscape of bankrupt lenders and scared investors, all industry players are struggling to right the ship.

A new message of strength and stability

The volatility in the industry has received its fair share of news coverage. Since the spring of 2007, the media has reported on the small lenders that have gone belly up, and the large lenders that have trimmed their loan offerings. A liquidity crunch has lenders turning away from home equity loans and HELOCs, programs that were once considered slam-dunks for anyone with equity.

Financial firms fear that homeowners and home seekers have received the message loud and clear, that the industry is in turmoil. Some of these firms are responding by changing the messages they use to shape consumer perceptions. LendingTree is promoting its Smart Borrower Center with a spot featuring chief executive C.D. Davies, who speaks frankly about industry turbulence. A print ad for New York Life prominently emphasizes the company's stability: "Financial strength. Integrity. Humanity. And the highest rating from all four major rating agencies." Chase Bank makes a similar assertion of reliability with: "Dependable for over 200 years. How can we help you today?"

Whether these advertising messages calm the consumer or just fuel the uncertainty remains to be seen. The more subtle approach used by Chase Bank and New York Life, addresses consumers' fears without actually naming those fears. LendingTree's efforts have gone well beyond that subtlety. The company has a series of spots posted on YouTube, organized around straightforward questions, including, "What's Going on in the Mortgage Industry Right Now?" and "Are Loans Being Made? Who's Getting Them?" One ad even contains the gloomy suggestion that now just may not be the right time to borrow.

Yes, the waters are choppy out there, and the weaker lenders are not fairing well. If the stronger industry players with secure lifeboats want to tell you how dependable they are, there's certainly no harm in listening.