As a mortgage professional I always want to help my agent partners as much as possible - most of the time I have people want to work with me but want "items of value" that other lenders and title companies are providing for them that usually breach the following rules below. So I thought it would be a good idea to post the do's and don't for RESPA. As I hate to say no to my agents but I have to and often times I feel so awkward especially when the agent says "but so and so does this for me!" So here is what i will do for my agent parners so we never get into trouble!
I'd love to get feed back from everyone on their thoughts?
RESPA DO’s
Real Estate brokers and agents must comply with the Real Estate Settlement Procedures Act, or RESPA. Violators of RESPA may receive harsh penalties, including triple damages, fines, and even imprisonment. Here are a few examples of what RESPA allows.
RESPA…
ALLOWS a title agent to provide, during an open house, a modest food tray in connection with the title company’s marketing information indicating that the refreshments are sponsored by the title company.
ALLOWS a home inspection company to sponsor association events when representatives from that company also attend and to post a sign identifying its services and sponsorship of the event.
ALLOWS you to jointly advertise with a mortgage broker if you pay a share of the costs in proportion with your prominence in the advertisement.
ALLOWS a lender to pay you fair market value to rent a desk, copy machine and phone line in your office to pre-qualify applicants.
ALLOWS a hazard insurance company to give you marketing materials such as notepads, pens and desk blotters which promote the hazard insurance company’s name.
ALLOWS a title agent to pay for your dinner when business is discussed, provided that such dinners are not a regular occurrence.
Speak with a RESPA attorney to make sure you comply with all applicable laws. Some state and local laws prohibit activities that are permissible under RESPA.
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