Penalties for Violating RESPA Provisions with Regards to (MSA's)

Real Estate Broker/Owner with Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate

This is part 6 of a SeriesThis past week, (October 5, 2015), the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin with the subject line:  RESPA Compliance and Marketing Services Agreements. 

This is to date, the most comprehensive profile of the Bureau interpretation of RESPA compliance for real estate service providers.  Because, it is a lengthy document and contains a lot of important information, I have broken up this blog post into several 'bite sized' pieces.


PENALTIES FOR RESPA Marketing Service Agreement (MSA) Violations

I came across this blog post which documented quite thoroughly, the results of an appeal to a the judgment by the Director of the CFPB earlier this year.  (In the Matter of PHH Corp.,et al) Although the post is lengthy, it is worth reading or at least perusing in my opinion.  What was clear to me in reading the post was that the appeal to the judgement against a ruling by the Bureau was essentially an appeal to the Director of the Bureau who in this case affirmed the initial judgment.  


In closing there are 3 other items pertaining to the case covered in the blog post which I think are worthy of highlighting:

1.  It is notable that the CFPB was not bound by RESPA's statue of limitations

2.  The Bureau will not be bound by previous interpretations held by HUD

3.  "The concept of disgorgement under the Dodd-Frank Wall Street Reform and the Consumer Protection Act reached gross revenues not delimited by costs or losses incurred through the challenged practises."T


That last statement is a direct quote as I am not a lawyer and don't play one on TV.  But, what I would infer from that statement is that penalties will not necessarily be limited to the actual costs or losses incurred through the challenged practices.  


For REALTORS, perhaps the most challenging aspects of this ruling are the changes in enforcement guidelines.  The regulations have not necessarily changed that much, but how they are being interpreted and enforced are significantly different.  Because enforcement actions are also retroactive, this will be an ongoing challenge for the real estate community.

1.  What is a Marketing Service Agreement?

2.  Why Might a Marketing Service Agreement (MSA) be against the law?

3.  An Example of a RESPA MSA (Marketing Service Agreement) Violation

4.  Whistle Blowers, Caveats:  MSA's and RESPA

5.  Potential Negative Impact of MSA's (Marketing Service Agreements) and RESPA Compliance

6.  Risk and Liability Assessment for real estate service providers:  MSA's and RESPA

7.  Steering as a Violation of RESPA with Regards to MSA's and RESPA

8.  Penalties for Violating RESPA Provisions with Regards to Marketing Service Agreements (MSA's)





Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I have avoided joint advertising and promotions because I read RESPA years ago and thought I wanted to stay far far away from that line.

Oct 13, 2015 12:45 PM
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!

Hi Tammy,  Thanks for your comment.  You are wise. :)

Oct 14, 2015 01:11 AM