title agents sharing loan expenses

Can Loan Originators and Title Companies Share Marketing Expenses?

The question in the title was asked during  the ATS Secured webinar, “RESPA Section 8: Understanding Marketing and Advertising Regulations,” presented by Marx Sterbcow of the RESPA Resource Law Center.

Marx Sterbcow’s Answer:

“Generally yes, but subject to the following restrictions under RESPA: any marketing, advertising or promotional products done between a loan originator and a title company must split the cost between the parties.

“The shared expenses must be a proportional split to the amount of space each party has on the ad or marketing piece and it be the fair market value.

“Example: If the loan officer and title company both share a marketing flyer where they both occupy 50% of the space on the flyer, they each would be required to pay their respective 50% of the total cost of the flyer. If the loan officer only occupies one quarter of a page then the split allocation of expenses the loan officer would be responsible for is 25% and the title company must pay the remaining 75%.”

Loan marketing regulations are a big part of TRID, with RESPA Section 8 being a highly scrutinized part of the rule. The CFPB issued a bulletin in October 2015 following TRID’s implementation, reminding the industry about the importance of avoiding kickbacks and other illegal marketing activities.

Interested in learning more from this webinar? Download the full webinar, complete with Q&As, today!