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CFPB Concerns: 2 Major Companies Ending ALL MSAs
The Consumer Financial Protection Bureau has never been very receptive to the idea of marketing service agreements, or MSAs.  They view them as a cover for a pay for referral practice which is a RESPA violation.  Unfortunately, in many cases they are correct in believing so and recent action taken by the CFPB has made even those parties in legitimate MSAs rethink their position on these types of agreements. Recently, Wells Fargo and Prospect mortgage announced decisions to discontinue all MSA activity.
These types of agreements have been around for decades and they haven't actually been hidden. RESPA section 8(c)(2) allows for payment of bona fide compensation for goods and services actually provided being exempt from RESPA referral fee prohibitions.  "The CFPB has take a very different view from HUD of the permissibility of these arrangements.  This is not a case of something that's been unenforced for decades.  Everyone knows about these. HUD for years did RESPA enforcement.  But now that view has changed under the auspices of the bureau via the enforcement action taken against Lighthouse and PHH matter," said Pete Mills, SVP for Residential Policy at the Mortgage Bankers Association.
He's referring to the fact that in June the CFPB fined ... more

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