Each communication I've received on this topic has highlighted the caution that must now be taken between referral partners when it comes to marketing arrangements or anything that might be perceived as "payment" between parties for referrals provided. Payment meaning actual payment of monies obviously. But payments received in other forms too.
This certainly isn't a new topic or focus of attention. RESPA rules and regulations have been of concern for a long time. But the intensity of the investigations now surrounding them and the severity of the punishments that will be meted out for new infractions has definitely skyrocketed.
As I said, this isn't a new issue. And while over-reach can come into play with any rules and regulations (and we've certainly seen it happen in our industry), I for one aren't at all unhappy that harder looks and stricter enforcements will be the norm regarding this particular issue.
Why do I feel that way?
I have personally found many positives to being a Lender working for a smaller Mortgage Bank. Positives that I believe prove extremely beneficial to my clients.
But negatives exist when working for a smaller company too. Although guidance and minor assistance is provided for me regarding marketing concepts and outreach, the majority of the responsibility and accompanying costs remain mine personally. And I'm sure I don't have to tell you what the "costs" for that in both money and time can be.
As a result, there have been those times in the past where I know for a fact that I've lost business to competitors. Competitors with more dollars at their disposal and a great willingness to spend them.
Lost business from referral partners because their business was awarded solely on marketing dollars and "benefits" received not quality of mortgage service, mortgage knowledge, mortgage experience, or mortgage advice.
Now before someone says "sour grapes" or something akin to it, let me assure you that even when/if the dollars were available at those times, I refused to take part. That's just not how I do or want to receive and grow my business.
But if the harder stance now being taken by the CFPB levels the playing field between Lenders/LOs and forces competition and the awarding of business to go to LO's that truly offer better programs and services to their clients (and their accompanying professionals) ... I say good.
It's about time. Those are the standards that should be in play and should be the deciding factors.
Of course, time will tell if these new enforcements have the desired effect and positive outcome hoped for. I'm keeping my fingers crossed ...
Until then, I recommend that you educate and inform yourself to the new standards being enforced regarding MSAs, referrals, marketing, and more. Things ARE changing and being fully-informed regarding those changes will help protect you from unknowingly violating the new rules and regulations enacted.
Gene Mundt, Chicago-area Mortgage Lender - 708.921.6331 - 37 yrs experience
Mortgage and Lending / New Lenox, IL
NMLS #216987, IL Lic. 0006220, WI Licensed. APMC NMLS #175656
Mobile (708) 921-6331
Office (815) 524-2280