It has been a long week. Good evening everyone.

I know RESPA Section 8 regarding fees paid to brokers. My question is, we are looking at working with a company to offer FHA and USDA loans. We do not have the staff or knowledge base to take on such complicated loan products. Our lenders will take an application, obtain supporting documentation, and forward to this company. If a company representative in the underwriting department, needs additional information from the borrower, our loan originators will follow-up.

We will not underwrite or make a loan decision. The loans will not be funded in our name. Adverse actions will be sent out by this company. Payments will be made to this company.

The company will pay us a fee. Because our lenders are involved and working on the loan application, I believe this is permissible.

I have never worked with a broker arraignment before. I would appreciate an information that may help me understand this process as it pertain to RESPA Section 8.

Thank you

There are certain things you will not be able to do if you are acting as the broker, like on FHA loans, you cannot select or compensate the appraiser. I am not as familiar with USDA, but I am sure they have certain rules also. You are going to have to crack the books on each of these loan programs to ensure you do not get crosswise, even if you are not the ultimate creditor.

FHA Civil Money Penalties
The Assistant Secretary for Housing - Federal Housing Commissioner or its designee is authorized to pursue civil money penalties against any principal, officer, or employee of a Mortgagee, or other participants in a Mortgage insured by FHA, including, but not limited to:

o mortgage brokers

If not already, familiarize yourself with HUD's Statement of Policy 1999-1 regarding broker compensation.

Thank you so much. Hitting the books.