Marketing services agreements, or MSAs, have been around a long time and have become very common. Typically, it’s an agreement between a real estate brokerage and a title agency where the broker performs marketing services in exchange for a fee, or it could be an agreement between a lender and a real estate brokerage where the lender will perform marketing services for a fee. The agreements are allowed under RESPA as long as certain requirements are met.
The problem with MSAs is that keeping them RESPA compliant can be trickier than it may first appear. Specifically, those who have marketing agreements must be careful to keep the agreement to marketing and not let sales muddy the issue. Valuation of services is also crucial. Incorrect valuations can lead to some serious penalties.
It’s likely the Consumer Financial Protection Bureau (CFPB), which regulates RESPA, is currently considering an enforcement action surrounding MSAs.
“There’s a significant amount of regulatory scrutiny among these things and the CFPB is actively going after mortgage companies right now for improper marketing service agreements,” said Marx Sterbcow, managing partner of Sterbcow Law Group LLC, during the Louisiana Land Title Association’s (LLTA) 2013 Annual Convention. Sterbcow said he believes there could be an enforcement action coming down the pipe that could change the way MSA are done.
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