MortgageRegulations

Can brokers relax about MSAs in the wake of the PHH decision?

Although decision upholds RESPA’s exemptions for certain affiliated business practices, industry leaders caution that it’s ‘not a green light for MSAs’
  • PHH was victorious in the latest ruling about its captive reinsurance program, but captive reinsurance is not a marketing services agreement.
  • Although real estate professionals can view the court's decision as a win for the industry, they should still approach MSAs with caution, say experts.

A federal court’s recent decision in Consumer Financial Protection Bureau (CFPB) v. PHH Corp. has some in the real estate, mortgage and settlement services industries breathing a little easier about Real Estate Settlement Procedures Act (RESPA) compliance concerns. But don’t get too comfortable with resuming or starting new affiliated business activities just yet. The Oct. 11 decision in the two-year court battle may have renounced the CFPB’s interpretation of RESPA -- widely criticized as “overly broad” and contrary to federal regulator guidance and case law -- in this case, but the bureau has vowed to appeal the U.S. Court of Appeals for the District of Columbia’s decision while affirming its firm RESPA stance. 'Not final at this point' Richard Cordray “The case is not final at this point,” CFPB Director Richard Cordray told the Mortgage Bankers Association (MBA) on Oct. 25 at the trade group’s Annual Convention & Expo in Boston. “The bureau ha...