Marketing services agreements (MSAs) have come under considerable fire in the last year, with the Consumer Financial Protection Bureau warning lenders about the risk they face with any sort of referral that generates a fee.

“We are deeply concerned about how marketing services agreements are undermining important consumer protections against kickbacks,” CFPB Director Richard Cordray said in October. “Companies do not seem to be recognizing the extent of the risks posed by implementing and monitoring these agreements within the bounds of the law.”

The Mortgage Bankers Association, wanting to make sure its members got the message, sent out its own warning.

“Coming as it does after enforcement and other actions by the CFPB on marketing services agreements, MBA believes that the (CPFB’s) bulletin is short on actual guidance, and can only be interpreted as a series of warnings to lenders against MSAs,” the MBA said in its note.

In light of this increased scrutiny, many banks and other lenders, including Wells Fargo and Prospect Mortgage, have decided to quit using MSAs as part of their marketing efforts.

But San-Francisco based startup Sindeo, a company that seeks to change the way people plan, shop and secure a mortgage, has taken a different approach. While understanding the warnings about MSAs very well, the company thinks there are still ways to work together with real estate agents and others involved in getting consumers into a home.

“I think the construction of the MSAs in the past had little to do with marketing,” Sindeo founder and CEO Nick Stamos said. “There are opportunities to work on a co-marketing program to find new customers together.”

For instance, Stamos cited the example of working with a real estate partner to identify and then reach out to 100 renters in a given area who are the most likely to want to buy a house or condo in the next year. Together, they would be able to help those clients find the right home and understand what they could afford.

“We’re taking a very proactive and co-marketing approach that is designed from the ground up to include the real estate community,” Stamos said.

Co-marketing is the key here, since both parties — Sindeo and the real estate partner — pay proportionally for the cost of marketing, per RESPA.  

Sindeo’s model is a departure from traditional siloed lenders, but one that Stamos said was intentional from the company’s beginning.

“Before we launched Sindeo we made a commitment to working hand-in-hand with the real estate community in implementing our model in a completely compliant way, and one that contributes to a better consumer experience. In this very competitive real estate market this kind of relationship really resonates,” Stamos said. “We started working here in California with four real estate companies, and we are excited to bring that model to key expansion states.”

Sindeo has exploded on the mortgage scene since its start in 2013. The company is expanding into metros in Texas and Florida in the short term, but has goals to cover metros throughout the country in the next few years.

“Our goal next year is $1 billion in mortgage originations. We think that by the end of 2016 we will be able to help customers in every state in the U.S. in buying their home or refinancing their mortgage,” Stamos said.

The company was born out of the personal experience Stamos had with the mortgage process, which prompted him to build a company that would offer a better customer experience.

“The mortgage process is not consumer focused and contains unwelcome surprises and frustrations for a lot of people. We want to make the process more like opening a present on Christmas morning,” Stamos said.

“The big proof so far is in our customers’ level of satisfaction, and the number of folks who would recommend us to their family and friends.”

Rapid growth doesn’t always equal an equally robust compliance approach, but Stamos is confident that the company is in good hands compliance-wise. One of Sindeo’s first hires was Jobe Danganan as its general counsel and chief compliance officer. Danganan was most recently the enforcement attorney-advisor at the CFPB, and before that served as senior investigative counsel at the U.S. Financial Crisis Inquiry Commission.

“Before we closed our first loan we brought Jobe on as our chief legal officer. In thinking about building a new mortgage experience and company I wanted to start from the very beginning based on a compliant framework,” Stamos said.

“We already have a team of 80 people focused on helping consumers with Jobe and two others members of his team specifically focused on regulatory and compliance issues related to platform protocol and process to ensure we’re not only operating a compliant business but also that we are forward-thinking and always looking to improve in those areas.

“This is a huge advantage for us, because our lender partners and the real estate community know from the very beginning we are doing things the right way,” Stamos said.

Danganan was just one of several key hires Sindeo made over the last 18 months. The company also brought on Ginger Wilcox, who led Trulia’s industry marketing organization, as chief industry officer. It also hired Brad Lensing as chief marketing officer, who served as chief marketing officer at marketplace lender Prosper Marketplace. Sindeo’s chief lending officer Tony Sachs joined on after 16 years at First Republic Bank.   Rounding out its executive hires, Sindeo named Andy Carra its chief technology officer. Carra was previously co-founder at SoFi and chief technology officer at LearnVest.

3d rendering of a row of luxury townhouses along a street

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