A Colorado Division of Insurance (CDOI) proposed rule that passed on August 16 effectively bans MSAs between title insurance providers and their real estate and other settlement service partners in Colorado.
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The Real Estate Settlement Procedures Act has been around since 1974 — but the changes over the past few years, combined with the creation and implementation of the Consumer Financial Protection Bureau (CFPB), have caused some confusion in the industry. What is the act? What does it mean for agents and for consumers? Here’s what you need to know about RESPA — explained.
After the housing bubble burst and led to the Great Recession, the pressure was on Congress to ensure that this crisis could never happen again — and to create a system under which the financial services industry could be held accountable. So when Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 and authorized the creation of the Consumer Financial Protection Bureau (CFPB), its primary objective was to put a “a cop on the beat to patrol the consumer financial services markets” in the wake of the financial crisis of 2007.
On July 30, two of the nation’s largest mortgage lenders, Wells Fargo and Prospect Mortgage, announced to the world that they are “discontinuing” their participation in MSAs (marketing service agreements) with real estate agents and brokers. And in September 2014, Lighthouse Title in Michigan was slapped with a $200,000 fine for its MSAs with agents and brokers. There’s been confusion in the industry about what’s permissible with MSAs and what’s forbidden. And until last week, the Consumer Financial Protection Bureau (CFPB) had been largely silent on the issue.