Vendor Guru Q&A - Lending

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Latest Lending - Referral Topics

Construction Loan w/ .50% Origination-RESPA?

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.

Referring Loan Customers to Insurance Agency

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?

FHA Loans - Referral Fees

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?

NDIP Referral Fees

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?

Commercial Loan Referral - Paying a Finder's Fee

08/18/2008

Is it legal to pay a finder's fee for a commercial loan referral?

RESPA - Prospect List Provided by Title Company

06/30/2008

Would it be a RESPA section 8 violation to receive a prospect list from a title company at no cost?

Lurking RESPA Violations?

06/04/2007

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 are Goods and Services in Lending?

05/14/2007

What constitutes goods and services performed for payment of the referral fee under RESPA?

Selling Mortgage Applications

04/16/2007

We want to sell mortgage applications (received online) that we deny to a subprime lender. What are the compliance issues that we will encounter?

Affiliated Business Arrangement

10/09/2006

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.

Premium Content View All

RESPA: How to Violate Section 8

It doesn't matter how strong you think your compliance program is. Someone in the organization may be busy figuring out a way to violate RESPA's Section 8.

RESPA: It Takes Two to Tango

For a long time, lenders and regulators have debated the meaning of Section 8 of the Real Estate Settlement Procedures Act.

Reg O Preapproval by Majority of Board

06/23/2019

I have a question on Reg O, specifically the preapproval by the majority of the entire board of directors requirement under 215.4. 1. If the board of Directors authorizes a sub-committee to act on behalf of the entire board, would pre-approval by that sub-committee satisfy the regulatory requirement regarding approval by a majority of the entire Board of Directors? 2. What if the majority of that sub-committee was composed of senior management, the remaining minority members were board members and the total number of board members on the committee did not constitute a majority of the entire board?

Converting Fixed Mortgage to ARM-Refi?

06/23/2019

Can a 30 year fixed mortgage be converted to a 5/1 ARM mortgage? What information needs to be provided to the consumer to have this done and can it be a modification or must it be a refinance?

Loan w/ Temporary Financing & LE for Permanent

06/23/2019

The bank provided a construction loan to a borrower to build a dwelling. Along with the temporary financing the bank also provided a loan estimate for a permanent loan. This was done to make sure the borrower had all the pertinent information to make a decision about the new construction as well as due diligence by the bank to be certain the borrower will qualify for the end mortgage. Is it considered a HMDA reportable transaction as a withdrawn application if the bank provided the loan estimate for permanent financing? The construction loan was taken out by a permanent mortgage in the secondary market loan and not the in-house mortgage that the loan estimate referred to.

TRID Rule Apply if Borrower is Occupant/Not Owner?

06/23/2019

Does the TRID rule apply to a loan where the borrower is the occupant of the house but not the owner, or is it exempt because it's not owner-occupied?

Charge Late Fee on a Consumer Single Pay Note?

06/23/2019

Can you charge a late fee on a consumer single pay note?

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