Another bank in the area is telling home builders that they can do construction loans at their bank with .50% origination. However, the initial .50% origination will be credited back to the home builder at the closing of the permanent loan to a new buyer if they refer the buyer of the new home to the banks mortgage loan officer and the buyer closes the new mortgage loan with the bank. This sounds like a kickback. Is this legal? The other bank is saying this isn't a RESPA issue since it is a construction loan. The other bank is not putting this in writing but they are telling the home builders verbally of this agreement.
We have a third-party insurance agency housed at a couple of our branches. We would like to refer mortgage loan customers to them for their homeowner's insurance. If the insurance company pays a referral fee to the mortgage lender, will that be a Section 8 violation of RESPA? What if the bank pays the referral fee?
I operate the mortgage department for a bank. For years we have referenced an article on your website entitled <a href="http://www.bankersonline.com/compliance/gurus_cmp0507h.html">"RESPA Fee Checklist"</a> to determine if we can pay a referral fee on mortgages referred to us by other mortgage companies. We were recently advised by an FHA representative that we could not pay a referral fee to any mortgage company if that mortgage company is not licensed to originate FHA loans, regardless of the work that they may have performed. Are there any other updates to this rule that we need to know about to ensure compliance?
I understand per the Interagency Statement on Retail Sales of NDIP that the referral fee may be a one-time nominal fee paid to the bank employee by either the insurance agency or the bank. If we structure a referral fee so that the first three referrals do not warrant a referral fee and starting with the fourth referral the bank employee receives a fixed amount nominal fee per referral retro-active to the first referral made. Would this be acceptable as a one-time fee?
Is it legal to pay a finder's fee for a commercial loan referral?
Would it be a RESPA section 8 violation to receive a prospect list from a title company at no cost?
Our Chairman of the Board owns a real estate company, our bank and the mortgage company. The realtor at the subdivision wants to put out a brochure to customers that provides a discount on construction costs if the customer uses the bank for the construction loan and the mortgage company for the permanent. There will be a stated discount to customers that use other bank/mortgage companies, but the amount will be less. Is there a RESPA violation lurking here somewhere? Also, the realtor (and/or the bank) is going to have to provide the affiliated business arrangement notice when the referral is made, is that correct?
What constitutes goods and services performed for payment of the referral fee under RESPA?
We want to sell mortgage applications (received online) that we deny to a subprime lender. What are the compliance issues that we will encounter?
I recently was assigned the task of reviewing all our bank's loans for documentation and compliance errors. My question is on a 2nd mortgage home equity loan do we need the affiliated business arrangement when we make the referral to our title company that is owned by a board member? We do the ABA on the refi and purchase side but I have not seen the ABA in any home equity files that I have reviewed.