Building an Affiliated Mortgage Business the Right Way
The ABR Brokerage Partnership Program is designed around an important principle: an affiliated mortgage business should be a legitimate operating business—not simply a mechanism for receiving compensation for mortgage referrals.
A Compliance-Focused Foundation
Affiliated mortgage relationships can create business opportunities, but they must be structured and operated within applicable federal and state requirements.
Disclosure of the Relationship
When applicable, consumers must receive the required written affiliated-business disclosure describing the relationship, including applicable ownership and financial interests and estimated charges or ranges of charges.
Consumer Choice
Consumers generally cannot be required to use an affiliated settlement-service provider merely because an affiliation exists, subject to applicable regulatory exceptions.
No Payment for Referrals
RESPA Section 8 and Regulation X prohibit fees, kickbacks, or other things of value pursuant to an agreement or understanding for referrals of covered settlement-service business.
Bona Fide Ownership Returns
Regulation X permits qualifying bona fide dividends and capital or equity distributions related to ownership, but ownership returns cannot be structured around actual, estimated, or anticipated referrals.
What About Compensation for Services?
RESPA does not prohibit bona fide compensation for goods, facilities, or services actually provided when applicable requirements are satisfied. Regulation X identifies certain permissible payments for services actually performed in loan origination, processing, or funding.
Compensation cannot be used as a substitute for a referral fee. When a person in a position to refer settlement-service business receives compensation for additional settlement services, applicable requirements may require those services to be actual, necessary, and distinct from the person's primary services.
Compensation Should Follow Real Work—not Referrals.
The structure, documentation, market value, licensing, and actual performance of services matter. Each arrangement should be reviewed for its specific facts, jurisdictions, and regulatory requirements.
More Than a Referral Arrangement
A bona fide mortgage business involves real ownership, business purpose, responsibilities, operations, expenses, and risk—not merely a mechanism for routing customers and receiving value.
Building an Actual Mortgage Operation
Depending on the structure, an affiliated mortgage business may involve ownership, capitalization, licensing, management responsibilities, mortgage operations, technology, compliance, lender relationships, staffing, and ongoing business expenses.
The objective of the ABR Brokerage Partnership Program is to help qualified brokerages evaluate and develop a legitimate mortgage operation capable of conducting mortgage business within the applicable regulatory framework.
Your Clients Remain Free to Choose.
An affiliated relationship should not eliminate the consumer's ability to shop for or select settlement-service providers. The mortgage operation should earn the customer's business through service, convenience, product availability, and execution—not through prohibited required use.
Regulation X § 1024.14
Kickbacks, unearned fees, referral fees, and compensation for actual services.
View CFPB Regulation →Regulation X § 1024.15
Affiliated business arrangements, disclosure, required use, and ownership returns.
View CFPB Regulation →Interested in Building an Affiliated Mortgage Business?
ABR Lending helps qualified real estate brokerage owners evaluate the business, operational, licensing, and compliance considerations involved in establishing an affiliated mortgage operation.
Request a Joint Venture Analysis →Important Information: This page provides general educational and business-planning information only and is not legal, regulatory, tax, accounting, or investment advice. RESPA and Regulation X requirements depend on the facts and circumstances of a particular arrangement, and additional federal and state laws may apply. Any affiliated mortgage business, ownership arrangement, compensation structure, disclosure process, or service agreement should be reviewed by qualified legal and compliance professionals before implementation. ABR Lending does not represent that any particular structure will qualify for a regulatory exemption or safe harbor.