Staying aying Inf Informed ormed on on Mark Ma rketing eting - - PowerPoint PPT Presentation

Sh Shaun White Vice ice President, Public Relations RE/MAX, LLC shaunwhite@remax.com

Staying aying Inf Informed

• rmed on
• n

Ma Mark rketing eting Ser ervice vice Ag Agreements eements

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

Dodd-Frank Wall Street Reform and Consumer Protection Act

• Dodd-Frank Became effective July 21, 2010
• Created the Consumer Financial Protection Bureau (CFPB)
• Moved regulation of RESPA to CFPB from HUD

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

CFPB: The New Sheriff in Town

• Can create regulations
• Enforces regulations
• Punishments for violations
• No Congressional oversight. Director recess appointment

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

RESPA: Basis for MSA Enforcement

• RESPA remains in force
• Section 8(a) – No kickbacks, nothing of value for referrals
• Section 8(b) – Closing fees must be for services provided
• Section 8(c)(2) – No prohibition on cooperative arrangements

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

HUD Interpretive Rule – June 2010

• No direct Consumer solicitation
• No direct handling of consumer information
• No “exclusive” or “preferred” arrangements
• Must have written agreement and consumer disclosure

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

CFPB Makes Its Opinions Known

• Lighthouse Title: Fees tied to referrals. Contract thing of Value
• PHH Mortgage: 8(c)(2) no safe harbor from 8(a) restrictions
• July 2015 Press Release: Response to lenders exiting MSAs
• October 2015 Bulletin: A warning to take careful consideration

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

CFPB Outlook on MSAs

• Not illegal per se
• Risky and difficult to comply with
• “Grave concerns about the use of MSAs”
• Often used to hide illegal kickbacks
• Will continue to scrutinize MSAs

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

MSA Best Practices

• Have a written agreement, reviewed by RESPA attorney
• Agreements can’t include “exclusive” or “preferred” status
• No steering the consumer, always provide written disclosure
• No direct solicitation to individual consumers

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

MSA Best Practices - Fees

• Fees must be for marketing services, not for referrals
• Be able to prove the market value of all services
• Independent third party validation of fees
• Audit services and fees regularly

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts

“MSA Do’s and Don’ts” from NAR