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#141796 - 12/19/03 10:45 PM Realtor Christmas gifts
Anonymous
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What about giving a Christmas gift to all the realtors in town? Is this permitted?

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Lending Compliance
#141797 - 12/19/03 11:01 PM Re: Realtor Christmas gifts
Richard Insley Online
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Richard Insley
Joined: Oct 2000
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Toano, VA
Why not everyone in town?
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#141798 - 12/22/03 02:03 PM Re: Realtor Christmas gifts
rlcarey Online
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rlcarey
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Galveston, TX
As long as you gave gifts to "all" the realtors, you should not have any Section 8 issues.
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#141799 - 12/22/03 06:58 PM Re: Realtor Christmas gifts
Richard Insley Online
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Richard Insley
Joined: Oct 2000
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Toano, VA
Randy- I don't see how giving multiple unearned things of value gets you around Section 8. My exagerated point was meant to shine some light on the bank's motivation for gift-giving. Although they may be numerous and nominal in amount, things of value are given in hopes that the realtor(s) will keep the bank in mind when it's time to refer home buyers to a lender.
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#141800 - 12/23/03 04:20 PM Re: Realtor Christmas gifts
E.E.G.B Offline
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the sandy shore
I agree with Richard - even if you try to hit every realtor in town, along with other business people of various ilk, it just creates the appearance of an expectation of future business. I would strongly advise against it.
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#141801 - 01/05/04 02:30 PM Re: Realtor Christmas gifts
rlcarey Online
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rlcarey
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Galveston, TX
OK – Let’s separate appearances from the regulation. The regulation states that no referral fees may be paid and defines that as: “No person shall give and no person shall accept any fee, kickback or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person.”

There are also exceptions found in 3500.14, including: ”3500.14(g)(1)(vi) Normal promotional and educational activities that are not conditioned on the referral of business and do not involve the defraying of expenses that otherwise would be incurred by persons in a position to refer settlement services or business incident thereto”

Now tell me why giving a promotional gift to “all” realtors that is not conditioned on the referral of business nor the volume of any past or future business would be a problem?

I’m not saying that it would be smart or cost effective, but a violation of RESPA – no.
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#141802 - 01/05/04 04:34 PM Re: Realtor Christmas gifts
Rocky P Online
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Joined: Jun 2003
Posts: 7,650
Florida
While in the strict sense there may be no violation with RESPA, HUD has come down with many unique rulings. One Florida thrift a few years ago had unveiled some new products and invited “all” realtors in town and surrounding areas for the presentation. As this was after hours, they had soft drinks, finger sandwiches and chicken wings.

Two months after the event, they received a strong letter from HUD, indicating that if they did not stop this violation and ensure it would never happen again they would be hit with a cease and desist from HUD. The bank refers to it as the “Chicken wing letter” for violation of Section 8. (Thou shalt not bribe realtors with chicken wings.)

No further comments on HUD.
Last edited by Jax; 01/06/04 01:19 PM.
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#141803 - 01/05/04 05:39 PM Re: Realtor Christmas gifts
GreatBlue Offline
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GreatBlue
Joined: Feb 2003
Posts: 2,362
Colorado
Jax, I don't think I'd ever heard of the "chicken wing letter". Do you happen to have a copy of it or a link to it?
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