As this article reports, one of the nation’s largest residential mortgage lenders, Wells Fargo, has terminated all MSAs or Marketing Services Agreements with Realtors, home builders and others. Other lenders are quickly following suit.
This is in addition to Wells Fargo recently terminating its joint ventures with similar entities in which the lender and Realtor team up in a new loan company, and split the profits from that enterprise.
This new policy was spurred by increasing regulation, enforcement and other pressure from the Consumer Protection Finance Bureau requiring accountability and transparency in dealings with consumers.
It marks a significant departure from industry practices in place until very recently, and thus a change to the competitive landscape for lenders and title companies. We anticipate more changes are to come.