I am loving the new RESPA limitations! I never agreed with the squeeze that was put on buyers to use the builder's title company, the builder's mortgage company, and any other builder affiliated settlement service providers. It just completely dismisses competition and turns its back on the free marketplace. And even though buyers are lured with some often hefty incentives, the builders ensnare them in higher interest rates, and more costs, and more fees!
But now RESPA has implemented a new required use provision that eliminates the opportunity for builders to provide incentives to buyers for using their service providers. Builders that violate this RESPA Procedures Act will find themselves slapped with civil penalties as well as criminal prosecution.
Prior to this mandate it was almost impossible for real lenders to compete. All we could provide was our experience and knowledge and better interest rates! But these obvious "assets" paled in the presence of a $10,000 incentive! It was a total amateur hour with these people acting as loan officers when they don't understand the mortgage end of the business and therefore couldn't possibly structure a loan that would be in the best interests of a client.
The Litigation Department of The National Association of Builders is now tasked with going to court on behalf of NAHB. They contend that many of NAHB's builder members either own or maintain joint ventures with mortgage and title companies and that this new rule has taken away a "critical marketing and customer service tool" for their members.
I say they stick to taping and spackling and let the numbers people serve the public in the capacity in which WE are skilled! Next case....
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