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#2192314 - 09/12/18 03:36 PM Joint Advertising with Realtor on FB
TMatt87 Online
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We have a loan officer that has a good relationship with a local realtor, and they would like to start marketing jointly on the realtor's Facebook page. Aside from all the marketing compliance concerns that I have, from a RESPA section 8 perspective, joint marketing is obviously a thing of value, but a FB post doesn't cost anything. Typically we split the cost of any joint advertising, but that doesn't really work on FB. Will this be an issue if we don't compensate the realtor in any way for posting our LOs contact info on his page?
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#2192324 - 09/12/18 04:19 PM Re: Joint Advertising with Realtor on FB TMatt87
Adam Witmer Offline
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From the July 2016 FAQs:
18. Can a mortgage banker and a real estate broker advertise their services together, for example, on the same brochure or newspaper advertisement?
A. Nothing in RESPA prevents joint advertising. However, if one party is paying less than a pro-rata share for the brochure or advertisement, there could be a RESPA violation.


The bottom line is that you need to make sure you each pay a pro-rata share for the advertisement. This could include costs for things like labor and design. You always consider having an attorney work up a marketing agreement in attempts to mitigate any risks.
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#2192329 - 09/12/18 05:12 PM Re: Joint Advertising with Realtor on FB TMatt87
TMatt87 Online
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That's where my issue lies. It would basically be half the ad being the realtors design and half our loan officer's. We would design our own ad, and basically copy and paste it next to the realtors, so there isn't really any shared labor or design costs. I just don't want to tell an examiner that we didn't pay anything for joint advertising.
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#2192340 - 09/12/18 06:56 PM Re: Joint Advertising with Realtor on FB TMatt87
Christy Goza Offline
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There may be a "facebook boost" post where there is money paid to distribute to a defined group. That would need to be split as well.
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#2192359 - 09/12/18 08:15 PM Re: Joint Advertising with Realtor on FB TMatt87
Adam Witmer Offline
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Matt, I figured that is where you were coming from. Just make sure you can justify and document it. That is why a formal marketing agreement may be beneficial.
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#2194227 - 09/28/18 09:20 PM Re: Joint Advertising with Realtor on FB TMatt87
Antilles Offline
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Would it violate RESPA Section 8 if the lender just wanted to share a realtor's home for sale listing? No verbiage regarding our products.
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#2221108 - 09/06/19 06:24 PM Re: Joint Advertising with Realtor on FB TMatt87
Mel in WA Offline
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I have recently been asked Antilles question above.....is sharing a "thing of value"? Thoughts??

Would it violate RESPA Section 8 if the lender just wanted to share a realtor's home for sale listing? No verbiage regarding our products.

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#2221111 - 09/06/19 06:32 PM Re: Joint Advertising with Realtor on FB TMatt87
rlcarey Offline
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Just one question.

Why would a LO do this if the intent was not that the realtor would possibly refer someone to the bank for a loan?

There is no other logical reason for the LO to be involved with the realtor.
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#2221138 - 09/06/19 09:51 PM Re: Joint Advertising with Realtor on FB rlcarey
ComplyGuy Offline
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Originally Posted by rlcarey
Just one question.

Why would a LO do this if the intent was not that the realtor would possibly refer someone to the bank for a loan?

There is no other logical reason for the LO to be involved with the realtor.

Couldn't it just be that the realtor's page has good traffic? It gets the LOs name in front of a different audience, a specific audience that is in the market for a home.

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#2221142 - 09/06/19 09:56 PM Re: Joint Advertising with Realtor on FB TMatt87
rlcarey Offline
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Well, I don't do social media, but I don't understand how sharing the realtor's page gets the LO's name in front of anyone that they are sharing it with, as that would which means they already have contact with whom they are sharing.
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#2221143 - 09/06/19 09:59 PM Re: Joint Advertising with Realtor on FB rlcarey
ComplyGuy Offline
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Originally Posted by rlcarey
Well, I don't do social media

Probably could have just stopped after this smile

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#2221864 - 09/18/19 09:18 PM Re: Joint Advertising with Realtor on FB Mel in WA
run4fun Offline
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Originally Posted by Mel in WA
I have recently been asked Antilles question above.....is sharing a "thing of value"? Thoughts??

Would it violate RESPA Section 8 if the lender just wanted to share a realtor's home for sale listing? No verbiage regarding our products.


I'm interested in this same question. This has just come up here. It makes me uncomfortable, but I can't find any real reason to say no.

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#2221875 - 09/19/19 12:08 PM Re: Joint Advertising with Realtor on FB TMatt87
Adam Witmer Offline
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Well, this is a tough one as sharing a Facebook post seems harmless enough and could even be justified to be a benefit to "friends" of the LO who are trying to find a home (in my market, it is extremely difficult to find a home as the good ones sell within a day, so seeing available listings could be argued as a benefit).

That said, let's discuss the prohibition in Section 8 for a second. 1024.14 of Regulation X (which implements the RESPA Section 8 prohibition) states this:
"No person shall give and no person shall accept any fee, kickback or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person."

In other words, no "thing of value" can be given in exchange for an understanding of referral. (Without going into detail, keep in mind that the definition of "thing of value" covers a lot of ground.)

So the question we have to consider is this: Would sharing a Facebook post of a home listing by a Realtor be a "thing of value" where there is an "understanding" of a referral?

To me, the "thing of value" under consideration is exposure to the lender's audience. In other words, the lender is giving the Realtor exposure to his/her Facebook audience. I don't think it is far fetched to assume that a lender might appreciate referrals from a Realtor and when this Realtor starts sending referrals their way, the waters get pretty muddy.

So, is it a clearcut violation of RESPA Section 8 for a lender to share a Realtors listing on Facebook? At worst, yes. At best, the answer to me is not no, but only possibly - and you wouldn't really know until the courts made a ruling after a regulator cited you for a violation and you decided to fight it rather than settle. So at best, I see it as elevated risk of a Section 8 violation. How your bank proceeds is up to the risk adversity of your management team, and ultimately, the Board of Directors.

Now, I understand that I am not an attorney, so I do always take the conservative approach to things like this - especially since Section 8 penalties have potential personal liability (including nicely sized fines and even jail time). Therefore, you might be interested in what an attorney says about social media. If so, here is something Dan shared earlier this year that might provide some food for thought: https://media2.mofo.com/documents/170302-respa-cfpb.pdf
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#2222021 - 09/20/19 06:51 PM Re: Joint Advertising with Realtor on FB Adam Witmer
run4fun Offline
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Thanks, Adam!!

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#2225234 - 11/07/19 01:40 PM Re: Joint Advertising with Realtor on FB TMatt87
Adam Witmer Offline
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To add to this, the FDIC just released a CMP relating to RESPA Section 8 which generally talked about concerns of co-marketing through "online platforms." Unfortunately, this CMP doesn't give us any specifics on how any arrangements were set up, but certainly reiterates possible risks with co-marketing through online platforms. https://www.fdic.gov/news/news/press/2019/pr19103.html
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#2225259 - 11/07/19 04:59 PM Re: Joint Advertising with Realtor on FB TMatt87
Monster Offline
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I've been trying to find out more details on this settlement without any luck - does anyone have more details or an understanding of what exactly was the issue?

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#2225261 - 11/07/19 05:04 PM Re: Joint Advertising with Realtor on FB TMatt87
P*Q Offline

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Adam posted the link to the FDIC press release above your post

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#2225262 - 11/07/19 05:10 PM Re: Joint Advertising with Realtor on FB TMatt87
Monster Offline
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Yes PQ, I read that yesterday when it first came out, along with other news websites to see if any had more information. I am looking for more details in an attempt to understand what actually took place.

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#2225280 - 11/07/19 06:52 PM Re: Joint Advertising with Realtor on FB Monster
RR Sarah Offline
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The press release lays out why they received the CMP. Improper co-marketing and desk rental. .
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#2225283 - 11/07/19 07:13 PM Re: Joint Advertising with Realtor on FB TMatt87
Monster Offline
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Even Adam's post says "Unfortunately, this CMP doesn't give us any specifics on how any arrangements were set up."

So, while "improper co-marketing and desk rental" might be enough information for some, I was hoping to learn more.

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#2225284 - 11/07/19 07:15 PM Re: Joint Advertising with Realtor on FB TMatt87
Monster Offline
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In a HW article - “The marketing activities associated with the alleged violations, which are in common use in the industry today, were conducted by the bank’s former stand- alone home loan center-based mortgage origination business,” Mason said.

This is partially why I am hoping to learn more about what the practices were.

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#2225285 - 11/07/19 07:22 PM Re: Joint Advertising with Realtor on FB TMatt87
Adam Witmer Offline
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Monster, that is exactly why I posted it that way. It would be nice to know how the "online platforms" related to the Section 8 violation. The CFPB has had several enforcement actions over the last few years relating to co-marketing agreements (including lease space issues) and they all spell out the Section 8 issues much better than the FDIC did in this one as it was quite generic. I was sort of expecting a C&D to go with the CMP, but the FDIC hasn't issued one as of this morning (when I looked up their enforcement actions).

I too did a search for news articles and the only thing I saw was a quote from the CEO saying that their marketing activities "are in common use in the industry." I'm wondering if they are talking about affiliate marketing (pay per referral) or just simple social media as there is a big difference between the two.
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#2225286 - 11/07/19 07:24 PM Re: Joint Advertising with Realtor on FB TMatt87
Monster Offline
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The CFPB enforcement actions always seem to include better detail, much more than we see from the other prudential regulators.

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#2225412 - 11/11/19 05:03 PM Re: Joint Advertising with Realtor on FB TMatt87
Inspector Offline
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FDIC orders typically come out at the same time each month so any corresponding order will probably come out later and might have more information.
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#2225473 - 11/12/19 08:57 PM Re: Joint Advertising with Realtor on FB TMatt87
John Burnett Offline
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The order has already been issued. It will be included in the batch of enforcement actions the FDIC releases in early December (and we will cover that announcement in our Top Stories and Compliance Briefing), but the order itself isn't going to change.
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