Realtors getting referral fees from Mortage Agents

[denns25]

I've searched hard through the forum, and I can't find a thread on this issue. If I missed it please accept my apology.

The common ediquette here in Louisiana is that if a realtor refers a client to the mortgage agent then the mortgage agent is supposed to refer clients back to the realtor. I've tried several mortgage agents around here and found that they are always the ones that end up with the candy cane, and I end up with a good 'ol boy slap on the back. I'm sorry, but an "At-a-boy" doesn't put groceries on the table.

Today I had yet another referral for a mortgage agent. I called him up and told him I wanted 25% of the loan origination fee or $250, whichever is greater. The mortgage agent was really defensive about it, but after a lengthly confrontation agreed to fax me a written agreement detailing as such.

How do you guys feel about it? Is there anyone else that is tired of putting groceries on the mortgage agents table and only getting a slap on the back in return?

[Philadelphia Realtor]

Referral fees paid by a lender to a real estate agent are a direct violation of RESPA and illegal. Lenders should be referred based on what's best for your client, not you.

[Homesurfer]

This HAS to be a bullshit thread...
________________________________________

Your loan officer should have tactfully and charmingly told you to go to hell, that what you were asking was illegal, a RESPA violation. If he actually paid you, he's wrong, too. Not only that, but you documented it on paper AND you made sure that at least one copy existed. That's called "evidence."

Mortgage loan officers that work mostly with buyers don't generally HAVE clients to refer to you. You refer clients to them because you trust them to take care of your client, plus you can count on them to close the deal so you earn your commission. A resale purchase loan officer does have other clients, but they are normally referred by other agents.

Of course, you could switch lenders and find someone that didn't work mostly with buyers, or who chased leads from the internet, radio, and so on.... but ususally they aren't very good lenders yet OR they are so busy they don't have time for you -- and you don't have any clout with them..

Don't be greedy. Care about your client.
__________________________________________________ ________

I can't imagine Matt made that post. It must have been an assistant or someone not yet trained properly. That's why real names should be mandatory.

[webmaster]

Anyone know if there is a publically accessible copy of the RESPA policies?

[Homesurfer]

Sure there is.

http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm

I've never read the entire thing, though. When I was working as a lender (whether for a small company, my own company, or a large company), we always had a RESPA attorney on retainer who would provide monthly updates with changes and things we should know -- someone I could call if I had a question.

If you're going to attempt to read the actual regulations....

...Good luck.

[Tim7332]

I worked for a direct lender not too long ago and somehow loan officers in my office were able to set up some sort of affiliate relationship to get around respa. Even as a realtor now that does my own loans, if i had to use a loan officer for a unique product I'd never ask for anything in return. I remember how insulted I was when realtors used to ask me for a referral fee and anybody who would was automatically a realtor I didn't want to work with anyways.

[Eric Blackwell]

OK...

Time to weigh in on this...

Dealing with RESPA is kind of like SEO. There are white hats (if you will), grey hats, and black hats....
From my reading of RESPA, Terry the professsional contratrian (grin) is correct that ANYONE in the lending business would view this as a violation...

Enter the "gray zone"--as time has gone by, and the internet has moved in as the marketing channel of choice--the 'marketing companies' have employed REALTORS & LOAN BROKERS, giving them the opportunity to receive referral fees from both or either one...RINOs and aLBINOs (Realtor in name only and Loan Broker in name only)

Much like SEO --one has choices to make. To SPAM or not to SPAM. That is the question.

Much like SEO --You can evaluate it on whether you are into making a quick buck and leaving the game or if you are a long term stable player. Bend the rules or be principle based. Choice is yours and so are the consequences...

Either way, IMHO bragging that you got someone to pay you $250 for a loan referral on a public forum is VERY much like a SPAMMER asking Cutts to evaluate his/her site....at PUBCON say for example....

All the best!

Cheers;

Eric

"And the lawyers dwell on small details. 'Cause Daddy had to lie..."
Don Henley "The End of the Innocence"

PS-No offense or judgement meant in ANY of my remarks, just one guy's opinion From Louisville Kentucky...

[Homesurfer]

That was a good and truthful answer above. White hats, black hats, and that gray area in the middle. That defines lending.

[LoanOfficer101]

Here are two excellent sites to go to for RESPA news:
http://RespaNews.com
http://RespaNewsUpdate.com

The second site has free webcasts that you can watch. Very informative. You will quickly learn that leaving a paper trail is not the smartest thing to do when you are committing a RESPA violation!

Ever think of becoming a Loan Officer legally and wearing both hats? In most states, you can do that an legally earn a commission on your mortgages. You can not do that on FHA or other government insured mortgages though. I have a lot more on this in my Loan Officer 101 program.

[GoGetRealEstate]

We have the text version* of RESPA News Updates on our site if you don't want to sit through the videos. Dr. Gary Lacefield knows his stuff. He's the one reviewing the cases and speaking in the videos. He used to work for HUD and trained their inspectors. If you watch or read his discussion of these cases, it will begin to sink in: Nothing of value can be exchanged between real estate agent and vendor in return for business. It's hard to enforce but HUD has increased the number of investigators in the field and they're starting to target brokers and agents. The vendors had such deep pockets that it's hard to hurt them. Real estate brokers who pay a $100,000 fine may start laying down the law, literally, to their agents.

I used to work for a company that somehow interpreted RESPA to mean you could give gifts as long as the value wasn't over $25. Dr. Lacefield says ideas like that are like urban myths. They get started and spread and are absolutely wrong.

*They're planning to add text to their site but haven't done it as of this date. Look for it in the future.