Irecently had the oppertunity to take a class on RESPA. The speaker warned of HUD enforcement and cautioned all in attendance to make sure they were compliant. I was kind of shocked at how little most of my fellow REALTORS knew about RESPA. Most thought it had more to do with lenders than REALTORS.
Today while reading my on-line copy of National Realty News I noticed that they had 4 articles on HUD nailing REALTORS and Title companies on RESPA violations.
So, I thought I might remind my fellow Active-Rainers that RESPA prohibits us from receiving ANYTHING of value in exchange for referring business. This applies to the obvious, such as lenders and title companies as well as the not so obvious, like home inspectors and insurance agents.
For instance, REALTOR Bob refers clients to insurance agent Bill. Bill and Bob play golf together once a month and Bill pays the tab. They are BOTH VIOLATING RESPA. No, there was never a formal agreement that said , "send me 3 clients a month and Ill pay your green fees." But, the spirit of the law has been violated.
More extreme violations are a lender paying the postage on your mail-outs and so you tell you clients to call the lender for quotes or the title company pays you $250.00 to be mentioned in your advertising, but only has about 1/8 the ad space. The laws says they can pay for advertising, but must get a fair share of the add. If the add cost $500.00 and the title company pays $250.00 they MUST GET 1/2 the ad. Recently, there has been a trend of title companies or loan officers renting space inside Realtors offices. The law says they can only pay market value for the space they use and cannot rent space they do not need/use.
These laws have been on the books for years, but now HUD is going after people. Don't get caught with your hand in the cookie jar... as much as I am a huge football fan, no tickets to Sundays game are worth the $10,000 fine I would get hit with for accepting them.