Washington Report

Advocacy Updates from Washington D.C.

Wells Fargo and Prospect Mortgage Drop MSA’s

On July 30, Wells Fargo and Prospect Mortgage joined a growing number of lending institutions in discontinuing participation in Marketing Services Agreements (MSAs) with real estate agents and brokers.  Citing “increasing uncertainty surrounding regulatory oversight of these types of arrangements . . . ,” Wells said the action is effective August 1 and existing agreements with builders, real estate professionals and other referral sources will be winding down over the next 90 days.  Prospect Mortgage, a top 30 ranked lender also announced on July 30 an end to its MSA’s by the end of the 3rd quarter.

Some industry officials have indicated the Consumer Financial Protection Bureau(CFPB) may be gearing up for a major crackdown due to an increase in whistleblower complaints on how MSAs are carried out between lenders and settlement service providers with a focus on several areas including mortgage insurance and ventures with real estate agents.   NAR will continue to defend properly drawn and implemented MSA’s.  NAR will continue to press CFPB for specific guidance on what forms of advertising are allowable and under what conditions.

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