Admin

Mortgage Companies Partnering with Brokers... Legal? Or not? (Part 2)

By
Mortgage and Lending with AnnieMac Home Mortgage 815040

My previous blog discussed the possible business relationship between a mortgage company and a realtor.  This blog is focusing on the actual Broker / Mortgage Company relationship. 

Do you work for a real estate office that has thier own mortgage company?  Are you persuaded by management to use that company?  Is it legal?  Are outside mortgage representatives allowed in your office, or not because of the agreement between your real estate office and the mortgage company?

These are a lot of tough questions to answer.  The biggest question is:  Can a real estate office legally pursuade real estate agents to use them?  Many realtors in my local area are actually given bonuses if they close thier deal with the in-house mortgage company.  That tells me that the office is getting compensated by that mortgage company per deal.  Is that legal? 

Is that fair to outstide mortgage companies that provide much better service that do not get a chance to compete?  Could that potentially hurt the realtor's reputation? 

I'd like to hear from brokers and realtors that currently deal with this type of scenario, or has in the past.  Does it help, or hurt to have a mortgage company in the real estate office?

 In another post, I'll give opinions on why I don't think it is beneficial to have a mortgage company in a real estate office. 

For now, lets hear from you, the realtors / brokers. 

Brian Brass
Brian Brass - Guaranteed Rate - Troy, MI

ERIC -

Great follow up to the original post on the issue of mortgage/realtor relationship and "kickbacks"...

Relationships between Real Estate Brokers/Lenders can provide a gray area regarding RESPA compliance.

This was a real issue with Builder/Developers who owned their own lending entity particularly during the recent Sellers market.
The larger the builder/developer the greater the chance they would have vertical sales integration with bundled services.

I recall mortgage brokers that were "required" to be pre-approved by "in-house" providers in order to submit purchase offers.

Looking forward to the commments... 

 

Jan 04, 2007 06:45 AM
Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

while most realtors steer a buyer to a particular lender for good reasons.... there are some who will steer the buyer for selfish ones.

i dont know the answer.... but i would think that these relationships shouldnt happen.

 

Jan 04, 2007 06:56 AM
Eric Reeber
AnnieMac Home Mortgage - Mount Laurel Township, NJ

Thanks Brian.

 There have been more and more real estate agencies making sure that thier realtors use "thier" mortgage companies to increase profit.  It is starting to hurt the mortgage companies that take pride in SERVICE to attain realtors respect as opposed to money.  I don't agree either. 

Jan 07, 2007 02:05 PM