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Is This a Permissible "Quid Pro Quo"?

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Question: 
Can I offer a client a gift certificate of up to $500 good at the business they work at, for refinancing with my company?
Answer: 

RESPA prevents the paying or receiving of a thing of value for a mortgage referral or for work not performed or not valued at the payment amount, on applicable loans. Since you mention referral, we'll assume this is RESPA applicable. RESPA doesn't prevent you from providing a thing of value to the borrower. So if this is the borrower, you may do so. Perhaps this is a gift card for a home improvement business.

If the loan is not subject to RESPA, than there would be no legal prohibition unless it is state law. You'd be a better judge of that. Remember that you may well have a tax reportable gift here.

First published on BankersOnline.com 6/06/05

First published on 06/06/2005

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