Mayer Brown Partner Phil Schulman has seen a definite uptick in marketing and advertising activities as a result of last year’s ruling in the Consumer Financial Protection Bureau’s (CFPB) case against PHH Corp. in the industry’s favor.
“Once the Circuit Court in the PHH decision made clear that Section 8(c)(2) was an exemption from the anti-kickback provisions and bona fide compensation meant reasonable market value and not payments related to merit, settlement service providers again began to consider advertising agreements,” Schulman said. “The fact that CFPB Director (Kathy) Kraninger also made clear that the CFPB was not going to regulate through enforcement heightened settlement service providers’ interest in advertising agreements.”
Over the past eight months or so, Marx Sterbcow, managing partner at Sterbcow Law, estimates that his advertising agreement business has increased from about three a month to around a dozen a month across the United States.
However, Sterbcow isn’t sure how long that will continue.
Chuck Cain, EVP Agency of WFG National Title Insurance Co., said his company is starting to see an increase in advertising agreements.
“We saw a drop off after Lighthouse, especially in the title area,” Cain said. “In the last year or so, we are seeing MSAs coming back in certain marketplaces. In the Midwest and in the Mid-Atlantic, traditional title agents are entering into MSAs with real estate companies. Now, many of the lenders have sort of exited MSAs. We’ve seen some lenders pull out of those MSA agreements, but we’re starting to see a little bounce back on the title side.
“The West Coast, Nevada in particular, has specific laws about MSAs which essentially make them virtually impossible to do. Texas and New York are states where it’s very difficult on a regulatory basis because of state law to do an MSA. But nothing has changed from the bureau’s mood of MSAs, which is, they don’t like them. They are suspicious of them.”
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