Last week, Wells Fargo and Prospect Mortgage announced their intentions to end marketing service agreements with builders and brokers. In response to Wells Fargo’s announcement, the CFPB issued the following statement:
“Wells Fargo’s decision to exit all marketing services agreements is an important step for the mortgage industry towards ensuring compliance with the RESPA statute and freeing up more choices for consumers. We are concerned that such agreements can carry significant legal risk for companies and undermine transparency for consumers. Companies should take note of today’s action and consider carefully whether their own business practices comply with the consumer protections provided under the law, which bars kickbacks for customer referrals.”
The CFPB has not stated unequivocally that RESPA prohibits MSAs, but this is yet another warning to proceed with utmost caution.
If you use MSAs or engage in other marketing with referral sources, it is more important than ever to heed the CFPB’s warning and give these arrangements a check-up. Please let us know how we may help.
Kind regards,
Loretta Salzano
lsalzano@franzen-salzano.com
770-248-2881