RESPA Section 8 triggers on Mortgage Comparison Platforms    
March 2, 2023
QUESTION
Last week, you wrote about Digital Mortgage Comparison Platforms. Your article was eye-opening. Thank you! 

The article triggered a lot of feedback and concerns from our management. We advertise on one of these platforms. As the Compliance Officer, I put together a task team to determine which laws and regulations these platforms impact, especially with respect to the CFPB's advisory opinion.
 
I was hoping you would elaborate on how the comparison platforms can affect compliance with mortgage advertising, RESPA, and UDAAP. Maybe you can offer some scenarios. 

How can comparison platforms cause mortgage advertising, RESPA, and UDAAP violations? 

Also, what scenario involving a "warm handoff" can impact RESPA section 8?
ANSWER
Last week's article, Digital Mortgage Comparison Platforms, provided an overview of the CFPB's position regarding online comparison platforms involved in lead generation. Let's do a little recapitulation to get started. 

The Bureau issued an advisory opinion to address certain circumstances in which operators of digital mortgage comparison-shopping platforms may violate the Real Estate Settlement Procedures Act (RESPA). 

The advisory opinion describes how a digital mortgage comparison-shopping platform operator violates RESPA section 8 if its platform provides enhanced placement or otherwise steers consumers to platform participants based on compensation that the platform operator receives from those participants rather than based on neutral criteria.
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Did You Know?

Online mortgage comparison platforms receive an illegal referral payment
in violation of Section 8 RESPA
when which three factors
are all present?
(1) The platform non-neutrally uses or presents information about one or more settlement service providers participating on the platform;

(2) Non-neutral use or presentation of information has the effect of steering the consumer to use, or otherwise affirmatively influences the selection of, those settlement service providers, thus constituting referral activity; and

(3) The platform receives a payment or other thing of value that is, at least in part, for that referral activity.
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