We are looking at a referral agreement where the bank will send customers looking for secondary market products (fixed rate loans, VA, FHA, etc.) to a mortgage broker, and in return, the bank will get a referral fee of 1% of the loan origination amount. The bank collects certain information from the customer up front, but the underwriting and servicing takes place with the mortgage broker.

What compliance issues does the bank need to take into consideration on this type of arrangement?

Might want to read this first: https://archives.hud.gov/news/1999/rspntce.html

Thanks rlcarey - I should have used the term mortgage lender instead of broker.

Doesn't really matter - that would make you the broker then. All Section 8 rules will apply for the fee you are paid for your services. The use of the term "referral fee" should not really be in your vocabulary when discussing such a relationship.

ok - thanks!