Posted by CarolFL on April 03, 2000 at 18:54:52:
for forgiveness than permission?
Anyone have any clue here? - Posted by DanM(OR)
Posted by DanM(OR) on April 03, 2000 at 11:50:49:
I posted this earlier with no bites, so I thought I’d try again.
John, Michael, and other Note Pros:
I spoke to the Department of Finance about buying & selling notes in Oregon, where I am. Everything seems to be straight forward there. No license requirments or anything.
I asked the lady about paying referral fees to homeowners, realtors, title people, etc. She said that there weren’t any State Laws against “kickbacks” and “referral fees”. However, she said, “where we might get into trouble is with RESPA”. I went on the Net and checked out the Real Estate Settlement Procedures Act here:
www.hud.gov/fha/sfh/res/resp2607.html
It seems to me that it only applies to Federal Related Mortgages. Am I reading this correctly? If that’s true, then seller financing would be exempt from this regulation. Right?
Thanks for you help!
Dan Matejsek
Re: Anyone have any clue here? - Posted by John Behle
Posted by John Behle on April 04, 2000 at 12:55:37:
With mortgage brokers, you can both receive and pay fees as another mortgage broker - broker to broker. Agents can also pay referrals to other agents, but an agent cannot pay a referral to someone un-licensed.
Buying loans doesn’t come into RESPA, except for the fact or whether it should have been followed by the ones originating it. You as a purchaser in the secondary market could assume the risk of the loan not having been done properly. Some states do try to include seller financing into the scenario.
Usury is a concern too. You do not face usury by buying a loan at a discount to create a higher yield, but if you buy a loan that was created at a usurious rate, then there could be a problem. There is the risk of a court construing a loan as “usurious” where someone raises the amount and lowers the rate - yet a lesser amount of funds is advanced.
Those that charge extensive amounts of points can also create a problem.
Re: Anyone have any clue here? - Posted by William, Columbus, OH
Posted by William, Columbus, OH on April 03, 2000 at 23:57:12:
Dan: I, and several others I know, have paid referral
fees to Realtors, etc…not just in my state but in other states. I recently gave a referral to a Realtor that intends to pay me a referral fee if he closes the deal.
I approached a mortgage broker some months ago with a lead and asked if he pays a referral fee. He said he couldn’t unless I were an employee (commission) due to RESPA. Some have a means for showing the referrer as an employee (?).
I, personally, offer the referral fee and if the party does not want to accept it for whatever their reason I apologize and ask how I might compensate them. Now the monkey is on their back to state their position.
Re: Anyone have any clue here? - Posted by David Alexander
Posted by David Alexander on April 03, 2000 at 16:52:02:
Dan,
Go buy some Notes, make some money and have an attorney check it out if your still worried.
David Alexander