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#2142262 - 08/16/17 04:48 PM RESPA - Spousal Settlement Providers
Compliance NABW Offline
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I wanted to get a feel for what others are doing or what their opinion is on Loan Officer's that have settlement service providers, specifically realtors, as spouses. Do you prohibit an LO doing a loan with a borrower that is using the LO's spouse as their realtor? It would seem to be full of legal conflict of interest and RESPA issues, perhaps I am being overly conservative. Anybody have any experience with a Regulator opining on this topic?

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#2142266 - 08/16/17 05:22 PM Re: RESPA - Spousal Settlement Providers Compliance NABW
rlcarey Online
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rlcarey
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Galveston, TX
Most Bank's code of conduct prohibit an employee to be involved in a transaction in which a themselves or where a closely related party is also involved.
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#2142300 - 08/16/17 07:07 PM Re: RESPA - Spousal Settlement Providers Compliance NABW
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True, from what I understand. Let's say that was not the case though. Do you feel there are RESPA issues involved?

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#2178219 - 05/15/18 06:57 PM Re: RESPA - Spousal Settlement Providers Compliance NABW
Vive Accommodare Offline
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Vive Accommodare
Joined: Apr 2013
Posts: 581
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I wanted to revive this post. It seems we are running into this issue and unfortunately as of now, our Code of Conduct doesn't directly address this issue. I've researched and feel it would be a violation under RESPA, but I've been told a time or two that my interpretations are conservative. Does anyone else have a thought to weigh in?
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#2178233 - 05/15/18 07:57 PM Re: RESPA - Spousal Settlement Providers Compliance NABW
Inspector Offline
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Joined: Apr 2016
Posts: 283
It's hard to say without knowing greater details. The violation, if there is one, is going to be in the details of what is passing between the parties.

A lot of these RESPA Section 8 situations are cloudy and boils down to the risk appetite. Given your concern is it worth the risk of a violation and how much time and effort do you want to extend trying to manage the relationship.

If they are dealing with FHA loans it would likely be prohibited outright.
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Opinions expressed are my own and do not reflect legal advice or the opinions of my employer.

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