Marketing Services Agreements

marketing services agreementsMarketing Services Agreements

Marketing Services Agreements are dying a slow death. I have already discussed this issue in two of my previous posts. The first one concerned Lighthouse Title and the next one was concerning Wells Fargo and Chase. In each case the CFPB made itself very clear how it intends to interpret and enforce RESPA Section 8(a) and 8(b). You can read those regulations at 24 CFR 3500.14 and 12 U.S. Code § 2607 . For many years settlement services providers like Title Companies, Real Estate Companies, Mortgage Companies, Builders etc have engaged in practices to create or increase the likelihood of a referral of a customer / client under the color of Marketing. When we talk to these parties, it is always the same line “They don’t have to refer someone to us.” Then why do it?

CFPB has been very clear in a quote from one of the consent orders, that the CFPB entered into, “Entering a contract is a “thing of value” within the meaning of Section 8, even if the fees paid under that contract are fair market value for the goods or services provided.” Further, “Entering a contract with the agreement or understanding that in exchange the counterparty will refer settlement services related to federally related mortgage loans violates Section 8(a).” Bottom line, the mere act of entering into one of these agreement may be construed as as a violation. Marketing Services Agreements must purely be for the value of the marketing / advertising itself.

Then the question is going to be, how are you managing these Marketing Services Agreements? Is it by counting closings? Or is it the same way you would manage and oversee any advertiser? There was a key checklist in the Lighthouse consent order. One of those key tasks was to document how you manage Marketing Services Agreements. Not by referrals, but by how many impressions, flyers, ads etc that you appeared in. The next step was to value that service by outside bids. Your goal was to determine the fair market value of the advertising for the sake of advertising, not the value of the revenue derived from the closings.

You may many more questions. I am an Arizona Department of Real Estate Approved instructor. One of the classes I teach is 3 hours of Real Estate Legal Issues on this very topic of marketing services agreements and illegal kickbacks. We go in depth to RESPA, Illegal Kickback Enforcement, CFPB, Violations and review of current Consent Orders. This class is only $10 per person to attend this class. If you would like to bring this class to your group, agency etc, please call Kevin W. Hardin at 602-571-9644 and we can schedule that class today.

About Kevin Hardin

Kevin W. Hardin is a 22 year veteran of the Mortgage and Real Estate industries. He holds a Juris Doctor (JD) degree from Concord Law School and a CMB (Certified Mortgage Banker) from the Mortgage Bankers Association. He is a Senior Loan Officer at HomeStreet Bank. He works with Borrowers, Attorneys, Title Companies, Real Estate Agents and Mortgage Companies on mortgage law issues.


  1. I am in the reverse mogtgare business and I agree with many of the items mentioned in this article. There are some things associated with the reverse mogtgare that could be done better as with any type of loan. The one request I take issue with is regarding reverse mogtgare counseling. Many of my customers like doing their counseling session over the phone, in fact some of my clients do not drive or are not able to leave their home often so doing the session over the phone is the only way for them to do it. Also the part about the counselor denying the counseling certificate if they feel like the reverse mogtgare is not for them is wrong. Who gives the counselor the authority to make that decision. The counseling is just done to make sure the potential borrower has been informed of all that comes with having a reverse mogtgare. Refinancing to a reverse mogtgare can be a great benefit to many seniors and if you shop around you can find a great rate and no origination fee, so the costs associated with it are lower than ever.


  1. […] had created their own Marketing Services Entities. See article about Marketing Services Agreements here. These branch managers executed marketing services agreements with the mortgage company. Branch […]

  2. […] wrong and illegal, if not, why did they create separate companies to funnel the money. Calling them Marketing Services Companies does not avoid liability. The Title Company, Genuine Title, LLC, is no longer in business. The […]

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