Thread Options
#1191265 - 05/27/09 09:07 PM Advertising
Overboard Offline
100 Club
Overboard
Joined: Aug 2007
Posts: 192
Minnesota
We have a customer that builds cabins and homes then sells them. He would like to put "Special Financing by ________Bank".
on his banner. Is there any compliance issues that we need to worry about?
Thanks for the input.

Return to Top
Marketing
#1191417 - 05/28/09 12:32 PM Re: Advertising Overboard
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,976
Soaring over Georgia
Are you paying a share of the advertising costs for producing the banner? If not, your inclusion in the advertising could be deemed to be a thing of value. If that thing of value is being given by the builder in exchange for you doing special financing that could be a RESPA Section 8 problem.
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top
#1191437 - 05/28/09 12:51 PM Re: Advertising RVFlyboy
Overboard Offline
100 Club
Overboard
Joined: Aug 2007
Posts: 192
Minnesota
The bank would not be paying anything.

Return to Top
#1191441 - 05/28/09 12:54 PM Re: Advertising Overboard
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,976
Soaring over Georgia
That's sort of my point. You are getting something of value - namely free publicity. In exchange for that free publicity you are providing special financing. That is a violation of RESPA Section 8 provisions which prohibits kickbacks and unearned fees. Section 8 stipulates that it is illegal to give or to receive a thing of value in exchange for the referral of settlement service business (which includes making housing loans).
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top
#1191491 - 05/28/09 01:26 PM Re: Advertising RVFlyboy
Overboard Offline
100 Club
Overboard
Joined: Aug 2007
Posts: 192
Minnesota
So if the bank helps pay for the banner, and the housing and FDIC logo is put on there, would that cover it?
Marketing makes me crazy!

Return to Top
#1191748 - 05/28/09 04:33 PM Re: Advertising Overboard
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,618
Galveston, TX
"In exchange for that free publicity you are providing special financing. That is a violation of RESPA Section 8 provisions which prohibits kickbacks and unearned fees."

Isn't the benefit going to the borrower though????
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1191863 - 05/28/09 05:51 PM Re: Advertising rlcarey
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,976
Soaring over Georgia
I don't know. I don't know what the terms of the "special financing" are. I'm only thinking from the aspect that the builder needs his buyers to have financing. As part of the arrangement to have the bank be a ready source of financing, the builder provides free publicity for the bank. That to me says potential RESPA problem. I just think it needs more work and documentation. Certainly, the bank paying it's share of the marketing costs for its own publicity helps alleviate any potential problems.
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top

Moderator:  Andy_Z, MoneyMaker