The CFPB recently issued an Advisory Opinion that focuses on how RESPA’s Section 8 prohibitions apply to “digital technology platforms”. This includes websites or online applications which allow people to compare different mortgage loan options. The website may then “match” the individual with potential lenders or other settlement service providers. This could be done by directing someone to lenders’ websites, selling information to lenders, or both.
The Advisory focuses on how an operator of this type of platform violates RESPA by steering users to a lender, or other service provider, based, in whole or in part, on the compensation received. A Section 8 violation occurs when anyone gives or receives anything of value in connection with the referral of a settlement service on a consumer-purpose loan or line of credit secured by real property where there is or will be a dwelling. So, a lender that pays a fee to a platform operator that is engaged in Section 8 violations likely puts the lender in violation as well.
Published
2023/03/10
