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April 24
BSA/AML Compliance: Writing the SAR Narrative
Ken Golliher

April 29
HSA Basics
Whitney Johnson

April 29
Required Training for Loan Originators
Mary Beth Guard and Jack Holzknecht

May 13
Overdraft Practices in Today's Regulatory Environment
John Burnett

May 14
Reg E Claims - Allocating Liability Correctly
Andy Zavoina

May 15
Managing Electronic Information - From A to Zettabyte
Fred Menge



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#864891 - 12/03/07 12:07 PM RESPA Section 8 Violations?
MyScamper Offline
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Registered: 05/04/06
Posts: 432
Loc: Between here and there
Any opinions on whether or not the following examples would be violations of Section 8 of RESPA?

1) Borrower closes loan with the mortgage division and at closing is given a coupon worth $50 if he/she refers another borrower to the bank and the loan closes ($50 is paid when the referred loan closes).
2) Coupons worth $50 are sent out to deposit customers and are redeemable

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Lending Compliance
#864903 - 12/03/07 12:17 PM Re: RESPA Section 8 Violations? [Re: MyScamper]
GuitarDude Online
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Registered: 11/17/04
Posts: 5619
Loc: So Cal
Yes and yes.
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#864914 - 12/03/07 12:23 PM Re: RESPA Section 8 Violations? [Re: GuitarDude]
MyScamper Offline
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Registered: 05/04/06
Posts: 432
Loc: Between here and there
Can you point me to the part of the reg that would specifically prohibit this? We are thinking that since the coupon is not going to someone who provides a settlement service it is OK.

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#864983 - 12/03/07 01:24 PM Re: RESPA Section 8 Violations? [Re: MyScamper]
GuitarDude Online
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Registered: 11/17/04
Posts: 5619
Loc: So Cal
Reg X section 3500.14 prohibits the payment of a fee for the referral of a settlement service. The definition of a settlement service in 3500.2 includes the origination of a federally-related mortgage loan. "Origination" includes the taking, processing and underwriting of an application.
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#864994 - 12/03/07 01:37 PM Re: RESPA Section 8 Violations? [Re: GuitarDude]
RR Joker Offline
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Registered: 11/15/02
Posts: 15778
Loc: The Swamp
1) yes
2) no...at least not at face value...what is the coupon for for these deposit account holders? Is it a "bonus", "gift" or what? YOu would need to review Reg D/Q and make sure you are not violating anything within that section, however.
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#865013 - 12/03/07 02:03 PM Re: RESPA Section 8 Violations? [Re: RR Joker]
GuitarDude Online
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Registered: 11/17/04
Posts: 5619
Loc: So Cal
I was assuming that the "coupons" in example #2 were for the referral of mortgage applicants. If that is the case, this would be a prohibited referral fee even though the coupon adds an extra step, IMO.

Scamper, what would be the circumstances in which the deposit customer would receive the coupon?
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#865032 - 12/03/07 02:15 PM Re: RESPA Section 8 Violations? [Re: GuitarDude]
MyScamper Offline
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Registered: 05/04/06
Posts: 432
Loc: Between here and there
The coupon for deposit customers would be part of a marketing mailing. Tell a friend about us and if they close a mortgage with us, redeem the coupon for $50.00.

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#865035 - 12/03/07 02:16 PM Re: RESPA Section 8 Violations? [Re: MyScamper]
RR Joker Offline
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Registered: 11/15/02
Posts: 15778
Loc: The Swamp
I'd stay far away from that one!
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#865091 - 12/03/07 02:57 PM Re: RESPA Section 8 Violations? [Re: RR Joker]
Sox in '13 Online
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Registered: 02/07/05
Posts: 6505
Loc: Fenway Pahk
we talked about a similar program scamper, and along with the issues brought up by others already, we had privacy concerns. Say your customer Ms. Jones refers Mr. Smith, and Mr. Smith gets denied. Ms. Jones calls asking for her referral fee...we certainly can't give her the loan status for Mr. Smith...
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#865148 - 12/03/07 03:37 PM Re: RESPA Section 8 Violations? [Re: Sox in '13]
RR Joker Offline
10K Club

Registered: 11/15/02
Posts: 15778
Loc: The Swamp
or technically, even the fact that if you DO make the loan...Ms. Jones will now know Mr. Smith is a customer.
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#865314 - 12/03/07 05:49 PM Re: RESPA Section 8 Violations? [Re: MyScamper]
David Dickinson Offline
10K Club

Registered: 11/28/00
Posts: 13799
Loc: Central City, NE
Originally Posted By: MyScamper
The coupon for deposit customers would be part of a marketing mailing. Tell a friend about us and if they close a mortgage with us, redeem the coupon for $50.00.

This is definitely a Section 8 issue, as Guitar Dude assumed.
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