The National Association of Realtors'(NAR’s) first program of their newly launched bi-monthly series, The Voice for Real Estate, addresses several of the top real estate issues, and this one is a doozy. NAR Director of Broadcasting, Stephen Gasque, discusses the Consumer Financial Protection Bureau (CFPB) decision to levy a half-million-dollar fine against a real estate company for failing to get their disclosure proceedings right, according to federal law, also known as the Real Estate Settlement Procedures Act, or RESPA.
Specifically, according to the NAR, “under the Real Estate Settlement Procedures Act (RESPA) affiliate entities must disclose relationships to consumers at or prior to the time of referral and make clear that consumers are not required to use the affiliate. In the case in question the disclosure form deviated from a sample disclosure published in the regulations by the Department of Housing and Urban Development (who again, oversaw RESPA prior to the CFPB). The CFPB consent order requires the forms to be completely synchronized with published sample including placing the same emphasis on key words. NAR will continue to work to educate members about their obligations under RESPA and also work with the CFPB to ensure appropriate compliance guidance is issued.”
Watch the video to make certain you are in compliance.
The NAR warns that more enforcement may be on the way. What can you do? Know your obligations regarding RESPA compliance because the message the CFPB is sending is clear: get your disclosures in order, or face the steep penalties.