Prospect to End Use of Marketing Services Agreements
Prospect Mortgage in Sherman Oaks, Calif., will end any activities being undertaken as part of marketing services agreements because of regulatory risk.
A recent Consumer Financial Protection Bureau interpretation of the anti-kickback provisions of the Real Estate Settlement Procedures Act has made providing services through these agreements untenable the company said in a press release. Prospect expects that its exit will be completed by the end of September.
The uncertainty involved has forced Prospect to make the move, despite the fact that the mortgage lender had put precautions in place to comply, said Doug Long, Prospect's president of national lending.
Many lenders have scaled back or made changes to their marketing services agreements, or eliminated them altogether after CFPB fined PHH Mortgage $109 million in June.