Are marketing service agreements worth the risk?
MSAs are a big topic of conversation right now. We have recently seen many large banks back off from using marketing service agreements. As a result, many lenders have shied away from the contractual relationships with realtors that allow each to share clients with one another. However, there have been a few examples of companies who have done MSAs successfully, surviving intense auditing from the CFPB.
Recently, it was reported that Movement Mortgage had been audited for two years for its practices with MSAs and, after all that time, no ruling had been made by the CFPB. It would appear, then, that Movement Mortgage was able to use MSAs in an ethical and legitimate manner. The question is, does this set a precedent for the rest of us? Should we take Movement Mortgage as an example and purse MSAs under the logic, "If Movement Mortgage did it, so can we?"
Here's what I will say about that: if you are going to get involved with MSAs, you better be prepared to invest heavily in legal counsel. If you think that all you've invested in technology and compliance for TRID preparations was too much, you may not want to pursue MSAs. If you adopt marketing service agreements, you are practically begging for intense scrutiny from the CFPB. You are going to have to have full legal counsel on board as your MSAs are created, implemented, and audited. You'll have to cross every "t" and dot every "i." The smallest mistake can be catastrophic. So, yes, I think MSAs can still be done. But, you just need to ask yourself, is it worth the investment for your organization?
Recently, it was reported that Movement Mortgage had been audited for two years for its practices with MSAs and, after all that time, no ruling had been made by the CFPB. It would appear, then, that Movement Mortgage was able to use MSAs in an ethical and legitimate manner. The question is, does this set a precedent for the rest of us? Should we take Movement Mortgage as an example and purse MSAs under the logic, "If Movement Mortgage did it, so can we?"
Here's what I will say about that: if you are going to get involved with MSAs, you better be prepared to invest heavily in legal counsel. If you think that all you've invested in technology and compliance for TRID preparations was too much, you may not want to pursue MSAs. If you adopt marketing service agreements, you are practically begging for intense scrutiny from the CFPB. You are going to have to have full legal counsel on board as your MSAs are created, implemented, and audited. You'll have to cross every "t" and dot every "i." The smallest mistake can be catastrophic. So, yes, I think MSAs can still be done. But, you just need to ask yourself, is it worth the investment for your organization?
