On Friday the Consumer Financial Protection Bureau released guidance pertaining to the increasing use of the mini-correspondent relationship. Specifically, the CFPB indicated that it would treat mini-correspondents as brokers for purposes of all laws and regulations where in substance the purchaser of the loan functions as the lender. In other words, for purposes of compensation and its impact on qualified mortgage status, the CFPB is in effect notifying mini-correspondents and their investors that the agency reserves the right to retroactively designate mini-correspondents as brokers. This could also affect the treatment of such entities under the Real Estate Settlement Procedures Act.
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