On Sept. 30, 2014, the Consumer Financial Protection Bureau (CFPB) ordered Lighthouse Title, a Michigan title insurance agency, to pay $200,000 for illegal referrals under the guise of marketing agreements under the Real Estate Settlement Procedures Act (RESPA). Similarly and on the same day, HUD's Office of Inspector General targeted Cornerstone Home Lending for similar issues. The cases follow on the heels of enforcement actions targeting disclosures and practices under the anti-kickback provisions of RESPA. Tying the value of marketing arrangements to the amount of referrals is a clear problem under RESPA. Likewise, requiring arrangements to be exclusive also raises red flags with regulators. Finally, arrangements where marketing is not commensurate with the amount of compensation will raise further concerns. NAR will continue to work to educate members about their obligations under RESPA and also work with the CFPB to ensure appropriate compliance guidance is issued.
CFPB/HUD Target Marketing
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