WASHINGTON (Reuters) – U.S. mortgage companies are returning to joint marketing and advertising deals and reviving a controversial practice that was effectively banned after the 2007-2008 subprime crisis. Where there is a tacit or unwritten agreement with one service provider to return closures to the other due to joint marketing, this is inappropriate. Any agreement or understanding, even if unin writing, is illegal. However, it is not enough to simply determine what constitutes a reasonable marketing fee under each proposed agreement. Remember that it is always advisable to establish, in an appropriate written agreement, these fees and the specific services to be provided by the marketing party in exchange for the payment of these fees, as well as all other responsibilities and obligations of the parties. While these factors are important considerations that concern most ESAs and similar agreements, these are just some of the relevant issues to consider. Compliance considerations don`t stop at RESPA. Other relevant requirements that MSA participants must meet include, among others, the protection and protection requirements of the Gramm-Leach Bliley Act, publicity and other laws that may apply to DSOs, as well as third-party oversight, to name a few.
It goes without saying that any marketing agreement is unique and should be evaluated on a case-by-case basis. Most joint ventures or related enterprises are incorporated as partnerships or limited liability companies that are taxed as partnerships. The partner or member of LLC, which is the real estate intermediary, returns the real estate contracts to the joint venture to be entered into or to the related business. LLC`s other partner or member, the title company, provides the expertise to complete the real estate transactions. While co-marketing agreements under RESPA are not illegal, Cordray has discovered that many of them have been used to camouflage illegal referral fees as compensation for marketing or advertising services. HUD warned that when a party pays less of its reasonable share for a brochure or advertisement, there is a violation of Section 8 of the RESPA, which contains anti-kickback provisions. .