Yes, we believe you can charge a reasonable fee for services you perform as a mortgage broker, including ordering appraisals and title work, pulling credit reports, and submitting loan applications to the correspondent bank. We are not aware of any requirement to include information related to acting as a mortgage broker in your lending policy — but we recommend incorporating into your policies the major legal requirements and prohibitions for mortgage brokers, including the limitations on referral compensation discussed below.

Section 8 of the Real Estate Settlement Procedures Act (RESPA) generally prohibits banks from paying “any fee, kickback or other thing of value” for referrals involving a federally related mortgage loan. Regulation X expressly prohibits payment referrals of a “settlement service,” which includes mortgage broker services.

However, RESPA includes a safe harbor for a “payment by a lender to its duly appointed agent or contractor for services actually performed in the origination, processing, or funding of a loan” and “a payment to any person of . . . compensation or other payment . . . for services actually performed.” Consequently, RESPA does not prohibit you from receiving payments for services your bank actually performed — unless a payment “bears no reasonable relationship to the market value of the . . . services provided.” The Seventh Circuit Court of Appeals has employed a two-part test — originally articulated by HUD before the CFPB took over administration of RESPA — applying the safe harbor where: (1) “goods or facilities were actually furnished or services were actually performed for the compensation paid,” and (2) “the payments are reasonably related to the value of the goods, facilities, or services.” Consequently, we believe you may receive payments reasonably related to value of services that you actually performed for the lender.

We are not aware of a requirement for banks to include information related to acting as a mortgage broker in their lending policies. The Federal Reserve requires banks to adopt written policies with respect to their real estate lending but do not require that your policies mention acting as a mortgage broker.

That said, we believe it would be a best practice to update your lending policies and procedures to ensure you are complying with requirements that may be applicable to mortgage brokers, such as Regulation X’s prohibition on referral compensation, Regulation Z and Regulation X’s disclosure requirements for mortgage loans, and Regulation Z’s prohibition on mortgage brokers referring to themselves as “counselors” in advertisements.

For resources related to our guidance, please see:

• Regulation X, 12 CFR 1024.2(b) (“Settlement service means any service provided in connection with a prospective or actual settlement, including, but not limited to, any one or more of the following: . . . (2) Rendering of services by a mortgage broker (including counseling, taking of applications, obtaining verifications and appraisals, and other loan processing and origination services, and communicating with the borrower and lender); . . .”)

• Regulation X, 12 CFR 1024.14(g)(1)  (“Section 8 of RESPA permits: . . . (iii)  A payment by a lender to its duly appointed agent or contractor for services actually performed in the origination, processing, or funding of a loan; (iv) A payment to any person of a bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed; . . .”)

• Regulation X, 12 CFR 1024.14(g)(2) (“The Bureau may investigate high prices to see if they are the result of a referral fee or a split of a fee. If the payment of a thing of value bears no reasonable relationship to the market value of the goods or services provided, then the excess is not for services or goods actually performed or provided. These facts may be used as evidence of a violation of section 8 and may serve as a basis for a RESPA investigation. High prices standing alone are not proof of a RESPA violation. The value of a referral (i.e., the value of any additional business obtained thereby) is not to be taken into account in determining whether the payment exceeds the reasonable value of such goods, facilities or services. The fact that the transfer of the thing of value does not result in an increase in any charge made by the person giving the thing of value is irrelevant in determining whether the act is prohibited.”)

• Howland v. First Am. Title Ins. Co., 672 F.3d 525, 531 (7th Cir. 2012) (“Based on its reading of RESPA Section 8 and its own regulations, HUD announced a two-part test to determine whether a fee from a lender to a mortgage broker violates RESPA’s kickback provisions: (1) ‘whether goods or facilities were actually furnished or services were actually performed for the compensation paid,’ and (2) ‘whether the payments are reasonably related to the value’ of the goods, facilities, or services.”)

• Real Estate Lending Standards, 12 CFR 208.51 (“Each state bank that is a member of the Federal Reserve System shall adopt and maintain written policies that establish appropriate limits and standards for extensions of credit that are secured by liens on or interests in real estate, or that are made for the purpose of financing permanent improvements to real estate.”)

• 12 CFR Part 208, Appendix C, Interagency Guidelines for Real Estate Lending Policies (“The agencies’ regulations require that each insured depository institution adopt and maintain a written policy that establishes appropriate limits and standards for all extensions of credit that are secured by liens on or interests in real estate or made for the purpose of financing the construction of a building or other improvements.”)

• Regulation Z, Certain mortgage and variable-rate transactions, 12 CFR 1026.19(e)(1)(ii) (“Mortgage broker.

(A) If a mortgage broker receives a consumer’s application, either the creditor or the mortgage broker shall provide a consumer with the disclosures required under paragraph (e)(1)(i) of this section in accordance with paragraph (e)(1)(iii) of this section. If the mortgage broker provides the required disclosures, the mortgage broker shall comply with all relevant requirements of this paragraph (e). The creditor shall ensure that such disclosures are provided in accordance with all requirements of this paragraph (e). Disclosures provided by a mortgage broker in accordance with the requirements of this paragraph (e) satisfy the creditor’s obligation under this paragraph (e).

(B) If a mortgage broker provides any disclosure under § 1026.19(e), the mortgage broker shall also comply with the requirements of § 1026.25(c).”)

• Regulation Z, Certain mortgage and variable-rate transactions, 12 CFR 1026.19(g)(1) (“Except as provided in paragraphs (g)(1)(ii) and (iii) of this section, the creditor shall provide a copy of the special information booklet (required pursuant to section 5 of the Real Estate Settlement Procedures Act (12 U.S.C. 2604) to help consumers applying for federally related mortgage loans understand the nature and cost of real estate settlement services) to a consumer who applies for a consumer credit transaction secured by real property or a cooperative unit.”)

(i) The creditor shall deliver or place in the mail the special information booklet not later than three business days after the consumer’s application is received. However, if the creditor denies the consumer’s application before the end of the three-business-day period, the creditor need not provide the booklet. If a consumer uses a mortgage broker, the mortgage broker shall provide the special information booklet and the creditor need not do so.

(ii) In the case of a home equity line of credit subject to § 1026.40, a creditor or mortgage broker that provides the consumer with a copy of the brochure entitled ‘When Your Home is On the Line: What You Should Know About Home Equity Lines of Credit,’ or any successor brochure issued by the Bureau, is deemed to be in compliance with this section.

(iii) The creditor or mortgage broker need not provide the booklet to the consumer for a transaction, the purpose of which is not the purchase of a one-to-four family residential property, including, but not limited to, the following: (A) Refinancing transactions; (B) Closed-end loans secured by a subordinate lien; and (C) Reverse mortgages.”)

• Regulation X, Special information booklet at time of loan application, 12 CFR 1024.6(a) (“Subject to the exceptions set forth in this paragraph, the lender shall provide a copy of the special information booklet to a person from whom the lender receives, or for whom the lender prepares, a written application for a federally related mortgage loan. When two or more persons apply together for a loan, the lender is in compliance if the lender provides a copy of the booklet to one of the persons applying.

(1) The lender shall provide the special information booklet by delivering it or placing it in the mail to the applicant not later than three business days (as that term is defined in § 1024.2) after the application is received or prepared. However, if the lender denies the borrower’s application for credit before the end of the three-business-day period, then the lender need not provide the booklet to the borrower. If a borrower uses a mortgage broker, the mortgage broker shall distribute the special information booklet and the lender need not do so. The intent of this provision is that the applicant receive the special information booklet at the earliest possible date.

(2) In the case of a federally related mortgage loan involving an open-ended credit plan, as defined in Regulation Z, 12 CFR 1026.2(a)(20), a lender or mortgage broker that provides the borrower with a copy of the brochure entitled “When Your Home is On the Line: What You Should Know About Home Equity Lines of Credit”, or any successor brochure issued by the Bureau, is deemed to be in compliance with this section.

(3) In the categories of transactions set forth at the end of this paragraph, the lender or mortgage broker does not have to provide the booklet to the borrower. Under the authority of section 19(a) of RESPA (12 U.S.C. 2617(a)), the Bureau may issue a revised or separate special information booklet that deals with these transactions, or the Bureau may choose to endorse the forms or booklets of other Federal agencies. In such an event, the requirements for delivery by lenders and the availability of the booklet or alternate materials for these transactions will be set forth in a Notice in the Federal Register. This paragraph shall apply to the following transactions: (i) Refinancing transactions; (ii) Closed-end loans, as defined in 12 CFR 1026.2(a)(10) of Regulation Z, when the lender takes a subordinate lien; (iii) Reverse mortgages; and (iv) Any other federally related mortgage loan whose purpose is not the purchase of a 1- to 4-family residential property.”)

• Regulation Z, Requirements for home equity plans, 12 CFR 1026.40 (“The requirements of this section apply to open-end credit plans secured by the consumer’s dwelling.

*    *     *     *     *

(c) Duties of third parties. Persons other than the creditor who provide applications to consumers for home equity plans must provide the brochure required under paragraph (e) of this section at the time an application is provided. If such persons have the disclosures required under paragraph (d) of this section for a creditor’s home equity plan, they also shall provide the disclosures at such time. The disclosures and the brochure may be delivered or placed in the mail not later than three business days following receipt of a consumer’s application in the case of applications contained in magazines or other publications, or when the application is received by telephone or through an intermediary agent or broker.

*     *     *     *     *

(e) Brochure. The home equity brochure entitled “What You Should Know About Home Equity Lines of Credit” or a suitable substitute shall be provided.”)

• Regulation Z, Advertising, 12 CFR 1026.24(i)(6) (“The following acts or practices are prohibited in advertisements for credit secured by a dwelling:

*     *     *     *     *

(6) Misleading use of the term ‘counselor’. Using the term ‘counselor’ in an advertisement to refer to a for-profit mortgage broker or mortgage creditor, its employees, or persons working for the broker or creditor that are involved in offering, originating or selling mortgages.”)