Marketing Service Agreements (MSAs) and YOU!!

Are you affiliated with a lender partner via some type of MSA?

 Over at Origination News, a writer is calling for the end of MSAs. What are they and what does this mean to YOU? 

MSAs are Marketing Agreements where lenders compensate Realtors/Builders in exchange for marketing their services. So it goes something like this:
Loan Officer pays a Real Estate office a monthly fee to put their links on a website and pass out the lender's cards/brochures. All legal, right?
But, while legal, what is really going on here?  It doesn't take a rocket scientist to know that this is simply a work-around to the illegal practice of Loan Officers paying Realtors for referrals. I mean, think about it: Why does the lender give a monthly fee to a real estate office? Because the real estate office is an awesome marketing company? Or is the lender really buying referrals? 

At 2:24 of the National Real Estate Post's daily Vlog you can see their interpretation and break down of the issue.

Over at the Origination News website you can see the article titled No Doubt About it, MSAs Must Go.

What does the CFPB say about this? 

http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-mortgage-kickback-agreements/

http://www.mpamag.com/news/cfpb-tells-lenders-to-back-off-msas-23467.aspx

http://www.housingwire.com/articles/34641-cfpb-to-mortgage-industry-get-out-of-msas

Well, the CFPB doesn't exactly call them Marketing Service Agreements. They call them Mortgage Kickback Agreements. Because that is exactly what they are. 

So why the fuss?  

Well, think about it. What is the benefit to the buyer/borrower of these MSAs?  
Answer: None.
Actually, lenders are paying Realtors/Builders for business and it isn't cheap. Who bears that cost? The lender eat it? Or is it passed on to the consumer via hiked rates or inflated fees?

Bottom Line: 

MSAs are legal. Some might be ethical. But with no benefit to the consumer and the obvious nature of the agreement structure.... It is indeed a referral kickback scheme in disguise. And the CFPB has it's sights on MSAs.

But they are legal, you say?
But the CFPB doesn't like them, I say!

Make no mistake. Legal or not, the CFPB has deeper pockets than you. Do YOU want to risk your license or huge fines for an unnecessary practice? Yes, these agreements are unnecessary to the consumer. 

I will let you decide. I take no stand for or against MSAs except to say that I will not participate in them. And I will not partner with someone who wants me to enter into one of these agreements.
It just isn't worth it!!

 Remember: CFPB stands for Consumer Financial Protection Bureau. Notice the first word in their name. It is ALL ABOUT the Consumer!!! As it should be. 

Tom Burris 

Mortgage Banker 
http://www.dallasloanguy.com/
(214) 763-4629 cell/text/nights/weekends(Really!!) 
tomburris@dallasloanguy.com 
Lending all across the entire Great State of Texas!! (And now Louisiana too)
NMLS# 335055 
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10yr Veteran navigating Mortgages for wonderful clients.