Family Abstract would AGAIN like to 
bring this to your attention!!!!! Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or anything of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed. That means that giving a consumer $500.00 towards closings costs IF the buyer uses the Realtors Lender and title Company is an illegal inducement. Or is it? I have been doing Title Insurance for 28 years, under RESPA, we were led to believe it was not legal, BUT maybe under the new CFPB it is?
LANDMARK (click to see the contract)
In a nutshell… here it is…Landmark Homes has a preferred Lender and Title/Settlement Company agreement that gives the home buyer a $500.00 dollar “incentive” if and only if the consumer uses the title and mortgage company that Landmark is affiliated with. If at any time the client opts out of the agreement, perhaps because the bundled service NEVER stacks up to the quality and professionalism that is offered by Independent Mortgage and Title companies, the “incentive” is immediately removed.
Definition of Incentive
Something that incites or has a tendency to incite to determination or actionRelated Words inducement, invitation; antecedent, cause, consideration, grounds, motive, occasion, reason; catalyst, catalyzer, fuel, spark HHHMMMMMMMMMMMMMMMMM???????
As an independent title agent, “Offers” like these ostensibly take our agency off the playing field. The law is clear, both the consumers for accepting the money and the Realtor for inducing the client to take it are at risk.
Under section 9, RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance. Would a $500.00 discount be considered directly or indirectly coaxing a sale?
I have only been doing this 28 years, I don’t profess to know everything, some days I swear I know nothing but having Landmark Homes waive $500.00 bucks if and only if the consumer uses their title and mortgage providers even with proper disclosure stinks of extortion.
Of course that’s just my opinion, I could be wrong!
What are your thoughts?
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