Lenders should exercise caution when purchasing leads to ensure that they are not actually paying for referrals as prohibited by the Real Estate Settlement Procedures Act. The purchase of leads is an acceptable practice so long as the leads do not constitute referrals. The Department of Housing and Urban Development permitted lenders to purchase lists of prospects. Likewise, to date, the Consumer Financial Protection Bureau has not prohibited this practice. Nevertheless, RESPA, as enforced by HUD and the CFPB,
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Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide.
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