Thread Options Tools
#30545 - 08/30/02 04:00 PM Paying Bonus/Incentives
Some Days You Just Can't Win Offline
Gold Star
Some Days You Just Can't Win
Joined: Feb 2002
Posts: 461
Mississippi River Valley
Our Bank is wanting to pay a $100 bonus/incentive to Correspondent Banks for every loan that they bring to us as a streamline refinance loan versus full refinance. Again, note that the bonus/incentive would be paid the Bank, not the Originator/Lender.

Does anyone know if a bonus/incentives can be paid to these Correspondent Banks that we are selling to Fannie or Freddie?

Would this increase the SRP?

Thanks for any advise or assistance given.
_________________________
How long a minute is depends on what side of the bathroom door you're on.

Return to Top
General Discussion
#30546 - 08/30/02 04:58 PM Re: Paying Bonus/Incentives
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,416
Bloomington, IN
Read RESPA 3500.14 thorughly. What service are they providing other than the referral? I would advise against it.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#30547 - 08/30/02 06:28 PM Re: Paying Bonus/Incentives
Some Days You Just Can't Win Offline
Gold Star
Some Days You Just Can't Win
Joined: Feb 2002
Posts: 461
Mississippi River Valley
Thank you for the information dpersfull.

Please keep in mind that a Streamline Refinance can only be completed by the originating bank. Therefore, no other bank can compete for a streamline refinance. The incentive is not based on getting the loan, so it wouldn't be considered a referal fee.

All we're asking is for the Bank to chose to do is a Streamline over a usual refinance which saves underwriting time as well as customer expenditures for appraisals, etc.

We'd like to incent the bank to do just that for a loan that we already have.

Thanks again.
_________________________
How long a minute is depends on what side of the bathroom door you're on.

Return to Top
#30548 - 08/30/02 07:47 PM Re: Paying Bonus/Incentives
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,416
Bloomington, IN
I misinterpreted your question, sorry. If you are paying them for taking and sending the “streamline” application, then you are paying them for worked performed (3500.14(2)(iii)) and I do not think you would have a problem. However, I do think you would have to disclose this as a fee POC by Lender.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#30549 - 08/30/02 08:43 PM Re: Paying Bonus/Incentives
Terry Offline
Gold Star
Terry
Joined: Sep 2001
Posts: 314
Midwest
Eventhough you are paying for services performed you still need to be mindful of 3500.14. Look at HUD's 1999-1 Policy Statement. Not only do you need to show that you are paying for services actually performed, you need to show that the service is bonafide and not duplicative. Then you also need to be able to support that the fee reasonably reflects the market value of that service. While you stated that the originating bank is the only one who could give you the streamlined refinance, it could be argued that they might be steering more loans your way because you pay this additional fee.
_________________________
All statements are my own and not necessarily those of my employer.

Return to Top