The Marketing Agreement, the Title Affiliate, and the Word 'Steer'

A written, flat monthly fee is not automatically lawful. Section 8(a) prohibits giving or accepting anything of value pursuant to an agreement to refer settlement service business. The Section 8(c)(2) safe harbor covers payments for goods, facilities, or services actually furnished or performed and for which the payment is reasonably related to the value of what was provided.

Apply that test here:

• The fee must reflect fair market value for a desk and documented lead-generation work - a rent comp and a scope of work should exist.
• The payment must not be tied, explicitly or implicitly, to referral volume or exclusivity. Dana's statement that the deal only works if 'her buyers stay with ABC' converts the arrangement into a payment for referrals, which no writing can cure.
• The fact that the fee is flat rather than per-loan helps but is not dispositive; a flat fee that exceeds fair market value is still a thing of value for referrals.

Required fix: document fair market value, itemize the services, strip every referral or exclusivity condition, and be prepared to show the math. Unaddressed, this is a Section 8 violation with treble-damages exposure, a DOBI examination finding, and potential referral to the Attorney General.

Three separate problems, and 'required use' is the fatal one.

1. It is an affiliated business arrangement. ABC's parent owns 22% of Lighthouse - well above the 10% ownership threshold - so the AfBA safe harbor in Section 8(c)(4) applies only if: a written disclosure of the ownership is given to the consumer at or before the time of referral, the consumer is not required to use the affiliate, and ABC receives only a return on its ownership interest (not a referral fee).
2. Requiring Lighthouse destroys the safe harbor. Conditioning the transaction, the $600 credit, or smooth processing on using an affiliate is a forbidden required use and is itself a Section 8(a) violation. The buyer must be free to shop and must be told so in writing.
3. Disclosure and consistency. The AfBA disclosure must name the affiliate, state the ownership relationship, and explain that a competitor may be selected. Marcus should also confirm the title charge itself is bona fide and not inflated to fund a dividend back to ABC.

Correct response to Bright Homes: 'We will disclose our ownership and give the buyer a written choice; we cannot require Lighthouse, and we cannot make the credit contingent on it.'

The credit itself is permissible - lender credits toward closing costs are a normal pricing tool - but its treatment and its conditions matter.

• Disclosure: it must appear on the Loan Estimate and Closing Disclosure as a lender credit, in the correct tolerance category, so the borrower can compare real numbers across the three quotes.
• No strings to affiliates: it cannot be conditioned on using Lighthouse Title or Bright Homes' preferred vendors. A credit conditioned on an affiliate is both a Section 8 required-use problem and a disclosure problem.
• Fair treatment across shoppers: Marcus should apply the same pricing and credit logic to borrowers in similar circumstances. Quietly offering a better credit to borrowers who use Dana's team is steering and creates fair-lending exposure under ECOA and the Fair Housing Act.
• Honest comparison: the buyer should get written quotes showing rate, APR, points, lender credits, and total closing costs so the comparison is apples to apples.

The judgment point: the credit is not the issue; the referral conditions attached to it are. Marcus should keep the credit, remove the conditions, and document the pricing rationale in the file.