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#2151956 - 11/01/17 05:49 PM Section 8?
Owlman Offline
Member
Joined: Dec 2015
Posts: 54
One of our new lenders has a loan that we are currently in the middle of writing that is for the purchase of a personal residence. We have started the TRID process and during this process have received the listing of this soon-to-be residence. The lender in question also happens to be the listing agent for the sale of this house.

To me we have a conflict of interest but I need a little more information before stating anything. I immediately looked into RESPA Section 8 but it says (I'm paraphrasing) "No person shall give, accept, percentage of any charge...other than for services actually performed." So if they are the listing agent is it safe to assume that they have performed said services and are due the commissions not only on the realtor side, but also as the lender in closing this loan?

I'm struggling with this one...

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Lending Compliance
#2152004 - 11/01/17 08:50 PM Re: Section 8? Owlman
Compliance Rookie Offline
Junior Member
Joined: Aug 2017
Posts: 31
North Carolina
1026.36(d):


d.Prohibited payments to loan originators



1.Payments based on a term of a transaction.


i. Except as provided in paragraph (d)(1)(iii) or (iv) of this section, in connection with a consumer credit transaction secured by a dwelling, no loan originator shall receive and no person shall pay to a loan originator, directly or indirectly, compensation in an amount that is based on a term of a transaction.
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#2152074 - 11/02/17 03:31 PM Re: Section 8? Owlman
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
To me we have a conflict of interest but I need a little more information before stating anything

What does your code of conduct say about this situation? Ours would not allow it nor would it allow the loan officer to be involved in any family involved transactions.

One of our new lenders

If this is what this "new" loan officer is bringing to the table right off the bat I'd be second guessing the decision to hire them.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2152109 - 11/02/17 04:54 PM Re: Section 8? Owlman
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,253
Galveston, TX
The lender in question also happens to be the listing agent for the sale of this house.

This is also illegal in some States. Even if not, they need to pick a career. How can a full-time loan officer at a bank also be a realtor without constant conflicts of interest that the bank would find difficult to monitor. Hopefully, your board has specifically approved this arrangement.
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