Affiliated Business Arrangements

Affiliated Business Arrangements (“AFBAs”) are a business methodology authorized under Section 8 of RESPA. This statute sets forth the parameters whereby one settlement service provider, usually a real estate brokerage company, has ownership interests in related settlement service providers such as mortgage, title and escrow companies. Mr. Gordon has unique experience with AFBAs in having represented the Coldwell Banker Residential Group before Congress when RESPA was amended to create the AFBA rules, which was then known as Controlled Business Arrangements.

Consultation beyond legal compliance can be valuable to such companies in order to assure that after initial formation they continue to operate in compliance with the AFBA requirements. Mr. Gordon can be of value to a company or a law firm to deal with these issues as a consultant or an expert witness. This is of particular importance today not only in light of the increased regulatory environment but also the emergence of class action litigation in this area. Litigation has proliferated involving real estate organizations which have affiliated companies that would appear to be in compliance with the AFBA requirements of RESPA.