I was recently sitting in a room full of Realtors and I heard something that shocked me! A mortgage professional in Elk Grove, Ca. stood up and made an announcement that whoever sent them the most mortgage client leads for the month would win a trip to a cabin for the weekend. I kinda just sat there and waited for others to react... but no one really did.
You see... it is this little thing called RESPA. I can not offer Realtors any type of compensation for sending us a client. Maybe noone reacted because they were Realtors and they are used to giving referral fees. It is perfectly legal for a Realtor to refer a client to another agent in exchange for a percentage of the total commission.
I read a great article by R. Sebastian Gibson about this subject! He says...
"Section 8 of RESPA quite explicitly and forcefully prohibits a person from giving or accepting a fee, kickback or anything of value for referrals of settlement service businesses relating to a federally regulated mortgage loan. It also prohibits fee-splitting or a person from giving or accepting any part of a charge for services that are not performed.
A person in violation of Section 8 cam be fined up to $10,000 and imprisoned for up to one year. In a civil lawsuit, a person in violation of Section 8 can be liable to the person who was charged for a settlement service an amount equal to three times the amount of the charge paid by the person for the service, and for the person's attorneys fees."
Well I guess everyone runs their Elk Grove mortgage business differently! I choose to keep myself out of the illegal zone!
With everything going on in the mortgage industry these days... why would you even go there? Why would you even go there...period?
Comments(8)