Mortgage lenders now have to get referrals from their real estate agents the old-fashioned way: earn them.

Lenders have long relied on formal contracts with agents, known as marketing services agreements, to get referral business. These agreements call for the parties to advertise together or provide other services to consumers.

But in 2015 the Consumer Financial Protection Bureau, while not outlawing the practice, put the industry on notice that it considers certain forms of MSAs to violate of the Real Estate Settlement Procedures Act ban on payments for a referral.

In response, several major lenders, including Wells Fargo, PHH Mortgage and Prospect Mortgage, said they were terminating their MSAs. With these arrangements on their way out, traditional word-of-mouth referrals are now the best and most cost-effective way of driving new business.

Some are suggesting that an end to MSAs will help level the playing field between lenders and ensure that the best loan officers and mortgage companies get real estate agents' referral business. In other words, rather than relying on an MSA to get business, loan officers have to prove that they can provide realty agents and consumers the best mortgage experience.

"Referrals are earned by doing actions beyond the sale," said Hunt Gersin, CEO and president of Your Neighborhood Sales Consultants, a consulting firm focused on the mortgage business. "Give, don't expect to get anything. Follow the philosophy of 'give to give,' not 'give to get.'"

It's a tough time for such a shift, since mortgage originators are also adapting to other regulatory changes such as the CFPB's new disclosure form.

"You may have been driving for 30 years but all of sudden every car switched and now the gas pedal is the brake and the brake is now the gas pedal," said Jeffrey Jaye, a mortgage broker in San Ramon, Calif. "It's like your whole life has changed in the way you've done something."

Jaye said his first two closings using the new CFPB disclosure format went so badly that he doesn't expect the clients (both first-time homebuyers) or the real estate brokers to refer him other business.

The complications stemmed from the new process, but the brokers had an easy scapegoat and blamed him for the closing delays. "Finally, I sent an email to the agent – 'I get it, it's my fault, alright. Now can we just move on and try to get the clients their house.'"

"Now, we'll get better at it, like everything," Jaye said. But "I'm in survival, retention mode," and he is not going out getting new relationships but working to save the ones he has.

Mortgage sales trainer Karen Deis, a former mortgage company owner and originator, compared earning a referral to dining at a restaurant and then sharing the details with friends.

"You either rave about the restaurant, it's OK or it stinks. I look at it as, you, as the loan officer, are the restaurant. That if you provide good service, good information and continue to market on a regular basis" you will earn a good review and earn business, she said.

Deis created the Mortgage Girlfriends networking group for loan officers in 2007. Some of its members arrange regular, invitation-only Realtor Roundtables. The loan officer rarely speaks at these events, but brings in speakers who might be from real estate-related businesses or even people like chiropractors (agents spend a lot of time in their cars, Deis noted) or self-defense experts.

Mortgages are seldom discussed. "After almost every session, these gals swear they get between three to five referrals from the real estate agents afterwards," Deis said. "They're sitting around talking. They've now made friends with them. They're now teaching them."

Mortgage Girlfriends members also coach real estate agents on writing a business plan and do annual property valuation reviews for consumers that are cobranded with the realty agents.

Even when a real estate agent goes out of business  (which happens to about a third of them every year, according to the National Association of Realtors), those annual reviews can open doors for lenders, Deis said.

"This gives you the opportunity to do the comparative market analysis every year and then introduce a new agent by saying 'the agent you did business with is no longer in business. I would like to introduce you to Bob Smith, who will now be doing your comparative market analysis. If you know of anybody who is buying or selling a home, please call Bob Smith and here's his information,'" she said.

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