03/27/2022
Are banks allowed to have referral programs for existing customers to refer new loan customers? If so, are the rules of such programs, and if not, what prohibits it?
02/27/2022
My company is a non-depository mortgage company. We would like to partner with banks/credit unions that don't offer mortgages. Once upon a time I had seen an "app taker program" wherein a financial institution could pay another financial institution for work done on an application. For example - the bank that doesn't offer mortgages would help the client complete an online application then provide all income/asset documents. For this my company would pay the bank 0.5% fee, shown on the CD, for their services provided. Can you please direct me to the section of the regs that would discuss this and/or provide information you might be familiar with related to this topic?
08/01/2021
It has just come to our attention that we have a consumer construction loan and on the cost breakdown there is a line item labeled "New Construction Realtor Referral Fee." The Realtor is charging a 1.5% referral fee for referring the contractor to the borrower. The contractor is charging the borrower for the fee. Is this a violation of RESPA Section 8? Contractors are never mentioned in section 8, but Realtors are.
This is apparently happening more than we knew, but the fee is generally wrapped into the builder's fee and not its own line item, so the bank was not aware of the problem.
08/01/2021
It has just come to our attention that we have a consumer construction loan and on the cost breakdown there is a line item labeled "New Construction Realtor Referral Fee." The Realtor is charging a 1.5% referral fee for referring the contractor to the borrower. The contractor is charging the borrower for the fee. Is this a violation of RESPA Section 8? Contractors are never mentioned in section 8, but Realtors are.
This is apparently happening more than we knew, but the fee is generally wrapped into the builder's fee and not its own line item, so the bank was not aware of the problem.
05/28/2012
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.
03/15/2010
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?
04/06/2009
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?
04/06/2009
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?
08/18/2008
Is it legal to pay a finder's fee for a commercial loan referral?
06/30/2008
Would it be a RESPA section 8 violation to receive a prospect list from a title company at no cost?