REALTOR®-Mortgage Broker Joint Marketing

Legitimate business arrangement or Illegal kickback?


The costs of real estate signs, advertising, desk fees or rent, lead generation, and other tools of real estate professionals can add up quickly.  That’s why it can be tempting for some REALTORS® to accept financial incentives from mortgage brokers and lenders.

Has a mortgage broker or lender ever approached you with an offer like any of these?

“I’ll pay you for every mortgage lead you send me.”

“Work with me exclusively, and I’ll subsidize your advertising costs.”

“Send your buyers to me for a prequal, and I’ll pay for the costs of your lead aggregator.”

“Refer leads to me, and I’ll give you free tickets to a Patriots game.”

Before you answer, consider this.  In 2017, the Consumer Finance Protection Bureau (CPFB) ordered a real estate company pay a fine of $50,000 for accepting illegal kickbacks for referring customers to a mortgage company.   The CFPB also required the company to pay into a government fund $145,000 in illegal fees that it received from a mortgage company.

The Real Estate Settlement Procedures Act (RESPA) prohibits mortgage brokers, lenders, real estate licensees, appraisers, insurers, or other settlement service providers from offering or accepting money or incentives for referrals of business for any federally related mortgage loan.  This includes loans, such as FHA or VA mortgages and mortgages backed by Fannie Mae or Freddie Mac.

While it is possible to have a legal marketing or cost sharing arrangement with a mortgage broker or lender, the CPFB is skeptical of arrangements that could result in a consumer paying inflated fees or receiving a referral that doesn’t meet his or her needs.  It is critical to review any arrangements with an attorney who is familiar with RESPA.

The CPFB uses factors like these to determine whether a marketing arrangement between a REALTOR® and a mortgage broker or lender is legal or illegal.

  1. Are the fees based on the number of referrals? Don’t do it.  This is a clear violation of RESPA.
  1. Are the fees lopsided? If a lender is using 10% of an ad, and a real estate company uses 90%.  Each side should split the costs proportionately.
  1. Are the fees arbitrary?  If a mortgage broker or loan originator is renting desk space, the rent should be based on fair market value.

The National Association of REALTORS® has created a helpful list of these and other co-marketing do’s and don’ts.

The NAR Legal Department has also created Frequently Asked Questions, compliance guides and other materials for you and your office to review.

Questions?  Contact the Rhode Island Association of REALTORS® Legal Department at 401-432-6945 or email