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retailorig
Cherry Bomb


Joined: 05 Jan 2008
Posts: 132

Is it legal?
PostPosted: Mon Jun 06, 2011 12:02 am Reply with quoteBack to top

I recall from the NMLS prelicense education that a lender can't provide or buy things like lunch or inducements to get referrals from realtors.

Each week I am seeing on the realtors broker open house tour list things like "lunch provided by XYZ lender. Is that a violation or is it acceptable? I have not offered to do these things because I thought it was a violation.

What are your thoughts?
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Emerald
Cherry Bomb


Joined: 12 Aug 2009
Posts: 179
Location: California

Re: Is it legal?
PostPosted: Mon Jun 06, 2011 2:24 pm Reply with quoteBack to top

retailorig wrote:
I recall from the NMLS prelicense education that a lender can't provide or buy things like lunch or inducements to get referrals from realtors.

Each week I am seeing on the realtors broker open house tour list things like "lunch provided by XYZ lender. Is that a violation or is it acceptable? I have not offered to do these things because I thought it was a violation.

What are your thoughts?


I believe it is illegal. Having said that it happens all the time Escrow/Title is not supposed to give out gifts yet they gave gifts in the eighties and early nineties example in Sacramento Escrows used to pull up "SKI Buses" for RE Agents and took them to Tahoe for a weekend fully paid. Then Fidelity was prosecuted and the gifts seemed to stop. As a Wholesale Rep, I cannot tell you how many gifts I saw from Reps/Companies go to Loan Agents as an incentive to use them. All of it illegal. Until we see some STRONG enforcement of the laws nothing will change.
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dks
Nitroglycerin


Joined: 11 Jan 2008
Posts: 556

Re: Is it legal?
PostPosted: Mon Jun 06, 2011 2:51 pm Reply with quoteBack to top

On the flip side - why would this be illegal? The broker is providing lunch, with no quid pro quo required or necessarily expected. It is a marketing tool, with no strings attached and is not a post facto provision of a meal (thanks for the referral, lunch is on me).
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schiavojer
Flash in the pan


Joined: 04 May 2010
Posts: 36

Re: Is it legal?
PostPosted: Mon Jun 06, 2011 3:15 pm Reply with quoteBack to top

dks wrote:
On the flip side - why would this be illegal? The broker is providing lunch, with no quid pro quo required or necessarily expected. It is a marketing tool, with no strings attached and is not a post facto provision of a meal (thanks for the referral, lunch is on me).


I would also say that the lunch is a method of advertising for the broker. the broker is giving nothing to the realtor, he is giving a lunch to his perspective clients. The realtor whose home is being used as the forum is not benefiting from this...also, easy fix...the seller is the one that allow this, to help sell his or her home. My argument was alway this. You can pay a lead generating company money for the "referal" and it is not illegal. You are paying money to get a name, social, number, ltv, dti etc...but to have a realtor send a client of theirs to you now its illegal..dont get it.
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I_Like_2Mortgage
Dyn-o-mite!


Joined: 25 Feb 2009
Posts: 276
Location: Tenney, MN

Re: Is it legal?
PostPosted: Tue Jun 14, 2011 5:24 am Reply with quoteBack to top

retailorig wrote:
I recall from the NMLS prelicense education that a lender can't provide or buy things like lunch or inducements to get referrals from realtors.

Each week I am seeing on the realtors broker open house tour list things like "lunch provided by XYZ lender. Is that a violation or is it acceptable? I have not offered to do these things because I thought it was a violation.

What are your thoughts?


Question: Is it legal.
Answer: No. It is illegal.

You are 100% correct. A lender can not provide or buy things like lunch or inducements to get referrals from realtors.

_________________
My friends call me Sid. You can call me Mr. Vicious.
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schiavojer
Flash in the pan


Joined: 04 May 2010
Posts: 36

Re: Is it legal?
PostPosted: Tue Jun 14, 2011 6:45 pm Reply with quoteBack to top

I_Like_2Mortgage wrote:
retailorig wrote:
I recall from the NMLS prelicense education that a lender can't provide or buy things like lunch or inducements to get referrals from realtors.

Each week I am seeing on the realtors broker open house tour list things like "lunch provided by XYZ lender. Is that a violation or is it acceptable? I have not offered to do these things because I thought it was a violation.

What are your thoughts?


Question: Is it legal.
Answer: No. It is illegal.

You are 100% correct. A lender can not provide or buy things like lunch or inducements to get referrals from realtors.


I agree but my question is why can we not pay realtor for referals, but can pay lead companies for 1000s of referals...doesnt make sense...its just a lead source.
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Snets
Nitroglycerin


Joined: 12 Nov 2008
Posts: 875
Location: Palm Beach County

Re: Is it legal?
PostPosted: Tue Jun 14, 2011 8:05 pm Reply with quoteBack to top

Good question - there are actually rules about lead sources also but I have no idea what they are.
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retailorig
Cherry Bomb


Joined: 05 Jan 2008
Posts: 132

Re: Is it legal?
PostPosted: Tue Jun 14, 2011 9:24 pm Reply with quoteBack to top

We got a call back from HUD and they explained that if the realtor was going to buy a lunch for the open house and the loan officer paid for it it would be illegal. If the realtor had no plan to buy a lunch for the open house and the loan officer offered to provide it this would not be a violation.

Clear as mud!
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Snets
Nitroglycerin


Joined: 12 Nov 2008
Posts: 875
Location: Palm Beach County

Re: Is it legal?
PostPosted: Tue Jun 14, 2011 9:36 pm Reply with quoteBack to top

A distinction without a difference - let me tell you - in the same vein - all of the broker shops around here are doing Borrower Paid and paying commission to their brokers like they've always done - the sentiment is - there is no hierarchy set up to enofrce this stupid rule so why bother to honor it. None of the wholesalers want anything to do with checking to see if it is done correctly - so why bother....
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WIZ18
Flash in the pan


Joined: 17 Feb 2011
Posts: 33

Re: Is it legal?
PostPosted: Wed Jun 15, 2011 1:30 am Reply with quoteBack to top

The hierarchy is NMLS call reports.
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