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Pete Mills issued guidance from the MBA on lender’s using MSA agreements as a way to get business and you can see this guidance below. 

The CFPB has made it very clear that they do not like MSAs when they use words like “grave concern”. In my opinion, the writing is on the wall folks. So if you value your business you may want to consider stopping the practice now. It is my belief that the bureau is issuing the warning, waiting for lenders who want to avoid RESPA violations to stop and then putting those that refuse to stop under heavy scrutiny. Even if you believe you are somehow functioning legally, are you willing to dip into the company coffers to pay for the litigation? 

Are your originators unable to sell your services and products if you do not have these agreements? I would argue that you can probably get just as much business without the risk of the MSA. Just the opinion of an old originator who got business the old-fashioned way; which was earning it by merit. 

One final thought for Loan Originators and Real Estate Agents/Brokers. Remember that if you are part of the MSA, the CFPB can fine and litigate against ALL of you for RESPA violations! So if you choose to continue the practice then consider possible litigation costs, fines and losing your license. It is not just the company who is liable! 

To Read the Guidance, Click Here

Tammy Butler, Master CMB

Author Tammy Butler, Master CMB

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