At the end of September, Lighthouse Title, a Michigan title insurance company, agreed to a consent order with the CFPB (Consumer Financial Protection Bureau), as well as a $200,000 fine, after the Bureau deemed the company to be in violation of the Real Estate Settlement Procedures Act. The CFPB mainly cited Lighthouse’s use of marketing services agreements with various companies in exchange for referrals–an action that went against RESPA by breaching the prohibition of referrals in exchange for highly valued services.

In response to the settlement, Lighthouse has revealed that it held RESPA compliance in high regard, doing everything within reach to operate under the 2010 MSA standards provided by the U.S. Department of Housing. Though their actions were seen to violate RESPA, they revealed that they had sought a current definition of an MSA for a number of years and had not received feedback from the CFPB until the complaint was lodged. This occasion puts Lighthouse at an interesting advantage going forward as they are now at the forefront of correspondence with the CFPB and will have access to other upcoming regulatory changes.

To assist those who have had trouble with defining and adhering to the most recent definition of MSAs, ALTA offers a comprehensive webinar that addresses RESPA requirements as well as best practices in the field. Among the suggestions listed were using flat-fee agreements and implementing an audit function to ensure all promised services are performed. Listen to the webinar here: https://www.youtube.com/watch?v=2RDsxd4U-VE&list=UUeI1cRqI63C0vvXkeVAIAIQ

The Central Florida closing agents at RECS, FL, are dedicated to staying at the forefront of real estate news and remaining compliant with all legal standards. To learn more about the latest in Central Florida’s real estate market, feel free to browse our blog, or follow us on Facebook.