The ink is barely dry on the first loan application taken under the new TRID rules and mortgage lenders have something new (or old) to worry about.
CFPB, in its continuing efforts to protect consumers against those unscrupulous lenders out there, has issued its “guidance” on Mortgage Services Agreements (MSAs). The guidance they issued basically says they don’t like these types of arrangements and if you’re smart, you’ll stay away from them.
MBA has added its detailed analysis of CFPB’s guidance (MBA) and have come to the same conclusion. These agreements have come under fire and close scrutiny by CFPB. A lender would be wise to steer clear.
If you have one, they advise you to immediately evaluate the program if you wish to avoid supervisory and/or enforcement actions. In other words, if you got one, get rid of it quickly.
Many lenders have already heeded this warning. They’ve decided the rewards are just not worth the risks. In the long run, this may not be a bad thing for lenders. Why should a lender have to pay a fee to a gate keeper (you know who they are) to gain access to potential customers? Who really benefits besides the gate keeper? Is it any real tangible benefit to the consumer?
Let’s get back to good old competition. Let the best lenders win based on price, products, and service, not from participation in closed shop environments disguised as MSAs.
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Are these MSAs worth fighting for? Is this a hill lenders are prepared to die on? Based on MBA’s guidance it doesn’t seem so.