Jimmy what I noctied is when a buyer works with an affiliation the paper work is a lot faster for me.

I have a client want for an approvel letter for a week now and when I have a buyer work with an affiliate the paper work can be done that day.

So it works for time issues.

• If a lender has a known affiliation with a Real Estate company, would you as a Realtor recommend using that company to your clients?  No, I wouldn't. 
• Does this affiliation give buyers the impression that they are a package deal when doing business? I think so.  

We have a lender located on our office building so I recomend him, he is very good and does a great job.

I have not, but just yesterday the mortgage folks in our office had a settlement with an agent and client from a competing office and everything went well.

Abiud- waiting a week is ridiculous.  In our market you have about 24 hours tops to get an approval letter.

Kathy- I edited my blog with numbers to make it easier to respond.  Thanks for taking the time.

Bart- Do you think you began using him because of convience  and then found out how great he was or did you hear great things about the guy in the beginning?  I am looking for honest feedback. Not trying to put you on the spot.

Ernie- Is there any reason why you have not used the lender in your office?  And do you know how the mortgage folks were able to find these buyers? 

Hi,

I wouldn't mind using a lender in an office next to mine.  I would never recommend a lender that had an office in another Realtor's office.  Just don't think it would be a wise thing to do.

All the best!

Jimmy: I just happen to know both companies you are referring to. I personally don't think the current situation is a WIN-WIN for both parties involved. I do how ever know they only have a 6 month agreement at this time witch does not offer the lender office space in the real estate company.this is a mid range 6 figure monthly payment. It does how ever allow them to camp put at the real estate office and solicit business. They claim it is not mandatory to use this lender. I do recall the last time they had one of these affiliate relationships how things turned out. It didn't last.

Jimmy, sorry, I should have made myself a little clearer...I do use the folks in the office...I was trying to make the point that other Realtors from other companies use our mortgage people also.

Kevin- Thanks for being honest that is what I am looking for.

Ernie- Sorry, I listed so many questions I lost something in the translation.  Thanks for clarifying.

Roland-  Wow.  It looks like those mortgage originators are going to have to produce.  I would hope a Broker would never make it mandatory to use an in house lender.  That would definately be a RESPA violation.

Jimmy,  I think I would be affraid to use a lender in the same office.  I am not sure I would get the best deal.

I think we would use a lender if our past experience has been stellar.  we currently only recommend two lenders because the experiences with the others have been dismal to say the least.

Brian Bartley

1. If a lender has a known affiliation with a real estate company it might be a controlled business arrangement or a CBA, and as long as your client is clearly informed of the relationship among any service providers, and that you inform them that other providers are available, RESPA permits it. We know that RESPA does not permit fees to be exchanged among affilliated companies for referring business to one another. A buyers range of choices must not be limited.

2. The package deal or one-stop-shopping is permissable if these requirements are met.

3. Unfair advantages surface if kickbacks between cooperating service providers for referrals is part of the formula.

4. Your fourth question is unclear, unless your suggesting that the lender is voluntarily paying more to rent the property because of the perceived business advantages due to the location and proximity to the realtor. It's probably unethical, but doesn't demonstrate a violation of RESPA unless some disclosure requirement was violated. RESPA requirements are targeted at lenders primarily, but the act affects real estate brokers and agents as well. Real estate licensees always fall under RESPA whenever they refer buyers to particular lenders, attorneys, title companies or any other settlement service providers. Legal advice needed here. 

5. It's easy to walk the client next door for the loan if the client has clearly been informed of your firms relationship with the lender and that the client has been informed that other providers are available. The buyer has the right to select their own provider.

6. As long as the proper disclosures were made to my client and they were informed that they have other choices, and informed that the choice was theirs at all times, I would allow the solicitation of referrals.

RESPA prohibits the payment of kickbacks and unearned fees in any real estate settlement service.

I have two questions:

1. Would RESPA requirements become enforceable if your lender worked with loans other than federally funded loans?

2. Would the lender's association with the realtor become liable under RESPA in a commercial transaction or anything other than a first-lien residential mortgage loan?

Nicole- I trained you well.

Brian- I commend you on have two trusted loan officers to refer your clients.  I personally believe when a Realtor and loan officer have a professional working relationship the process of purchasing a home has proceeds more smoothly.

David- Thank you for your feed back.  As to your questions on RESPA I will refer to your advice on answer 4 legal advice should be sought.  I am under the impression RESPA covers any loan involving Real Estate.  So, I would assume both situations would fall under RESPA making each enforceable and liable if a violation occured.

Jimmy: You are getting good responces here. Could become a very interesting Blog !

Jimmy, I heard great things about him, and they are true, my son used him when he bought his home last year.Would i use someone in another real estate company's building? No to be honest i wouldnt.

Regarding using the lender in my office...EVERY customer is informed and signs an "affiliated business disclosure' that clearly states that a corporate 'profit' will be made on the transaction.

Roland, Bart, and Ernie- Thanks for the follow up.

Interesting blog.  We have a very good lender in our office.  I don't use him often however, because my clients come with a lender in tow or I recommend lenders that I have had long standing relationships with and I know will give excellant service. I know that our firms agency disclosure discloses the relationship with this particular lending company.  I have heard wonderful things about him and used him on a loan for myself.

RESPA does not cover every loan, only owner occupied.  Investors do not fit in the RESPA guidelines.  I found this out because of a specific transaction that I had questions about and a conversation with RESPA in Washington DC.  I was surprised.  Most lenders however attempt to use respa guidelines in all their dealings.  I know my lenders were surprised that the guidelines did not always cover investors. 

Jimmy: Looks like you are getting great reviews on this one. Still parked for updates

Jimmy,

Very interesting post.  I have an affiliate company in my office that does loans and their representative is NEVER here.  I'm not sure that I would use them if they were.  I don't like the idea of offering their services to any of my clients who come to me and have not already established a relationship with a lender.   Like most realtors I have loan officers that I have worked with in the past and I trust them with my clients.  If I am asked, I give the names and numbers of 5 local lenders for the client to do their own shopping. 

Janie-  Don't you think 5 lenders is over kill?  I understand not wanting to be preceived as steering a client but, wouldn't you agree when a client asks for a referral they are asking for your advice?  Giving 5 people seems like you don't care.  I know better because I have read your blogs.  However, clients may think different when they ask for help and you basically give them 5 names they could have found themselves.  I think 2 lenders that match your client personality would say you care but I won't make a decission for you.  When I refer a Realtor I usually suggest one that I think will work best with them.  Then I will give a second if my client doesn't like that Realtor.

Karen- I am no attorney.  So, I treat everything like RESPA could be an issue.  I emailed HUD once with a question concerning RESPA.  They responded by telling me that they could not give me advice on my question.  I should consult an attorney.  I play it safe.

Jimmy: I like ther interaction that you are getting here.  I agree that 5 can be over kill. I'm sure Janie has her reasons for this.