Make Sure Your MSA is in Order

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The CFPB is looking at MSA’s.  If there is any money exchanged or a reduction in costs for referrals you’re on thin ice.



  • Wow, Novel Idea. How about the mortgage broker gets paid for doing the loan. The realtor gets paid for selling the house. The title company gets paid for the title work. The builder gets paid for building and selling the house . Oh, and everyone keeps their hands out of each others pockets. Ya know, that just might work.

    Bob Hagan October 22, 2015 5:39 am Reply
    • Haha! That would be the ticket Bob! Agreed!

      Frank Garay October 22, 2015 7:22 am Reply
  • Why don’t you guys do a piece about Quicken and how they are soliciting realtors with their purchase leads in exchange for a 40% cut of the realtor commission if the deal closes with them–payable to their shell real estate brokerage In House Realty:

    Money in moving so fast from the realtor to the lender in exchange for buyer leads it will make your head spin….Who’s talking about that???

    Scott Lawson October 22, 2015 7:43 am Reply
  • I’ll add this from their website to save you the research:

    Family of Companies — In-House Realty is part of the Quicken Loans Family of Companies, which allows us to share the same perks and incentives, yet retain our small office community. Quicken Loans has appeared on FORTUNE Magazine’s ‘Best Companies to Work For’ in America for 12 straight years!

    Scott Lawson October 22, 2015 7:50 am Reply
    • Countrywide received numerous awards for Customer Service, place to work, etc and look where they are now!!!

      John October 22, 2015 8:53 am Reply
  • It irritates me that I pay lenders (who create a different referring company ) a 35% referral fee when they send me a client. However, I am unable to charge them a 35% referral for for every client I bring to them. It just isn’t right. If it’s illegal, it should be illegal for all.

    Allison smith October 22, 2015 9:08 am Reply
  • The CFPB does not keep a dime of any penalty or settlement money. There is no “gravy train”. It all goes to the Treasury. The CFPB gets 100% of their funding and operational budget from the Federal Reserve based on a formula. Seriously, Frank and Brian, you should know better than to pass on nonsense like this. It makes us all look bad when trying, legitimately, to argue against CFPB’s policies. Do your research.

    RE MSAs. Even if you have the deep pockets to fight the CFPB, an MSA isn’t worth it. The big banks have made this quite clear by bailing out of all MSAs. Does anyone really think they know better?

    Marcus October 22, 2015 11:50 am Reply
    • Marcus, I think we’d be foolish to think the that government isn’t looking at how much money the CFPB brings in compared to how much it cost to run it. Regardless of where the fine money goes or where the operation budget comes from, it’s money in and money out. With respect to policies we feel some are out of line with what makes good sense for the mortgage and real estate industry and we will most definitely argue against them, to absolutely no avail of course since they have zero regulation themselves. With that said, we also believe the CFPB does a lot of good for the consumer. Believe me Marcus, we do our research. Thanks for comment though! Keep ’em coming. This is all good dialog. ~ Frank

      admin October 22, 2015 1:28 pm Reply
  • I hate acronyms. What is MSA? Here in Indy it means Market Square Arena.

    Tim Lord October 22, 2015 1:14 pm Reply
    • Marketing Service Agreement. Where settlement providers have agreements with each other to cross promote each other. There are many different ways this is accomplished. The issue is if one provider is literally “paying” another provider for business. This is a RESPA violation. “Paying” can be actual pay for a referral or reducing fees for referrals. Or paying rent to be in an office that’s grossly under market or increasing rents based on business referred. These are typical “not legal” arrangements.

      admin October 22, 2015 1:19 pm Reply
  • We have an attorney who understands RESPA laws/policies review our MSA agreements to make sure they’re in compliance. Determining the “value” of co-marketing is pretty tough, so best have an expert draw the terms up for you to make you’re in compliance. MSAs should always be based on a flat rate no matter how much business is done between the agent and vendor.

    JV October 22, 2015 1:46 pm Reply
    • Just because you have an attorney does not mean necessarily that you are not in violation of the law. The attorney will not be fined/go to jail, YOU will, if your MSAs are deemed illegal by the CFPB. I have known people who assumed and trusted that the attorney knew it all and they ended up in jail! Seriously, as with anything, some attorneys are better than others…

      Leslie October 23, 2015 12:28 pm Reply

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