This seems that it would definitely defy RESPâs section about
(a)Business referrals. No person shall give and no person shall accept any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.
Our broker had the company lawyer speak to the agents about this and he indicated that as agents, we are not to give or get anything to induce a client to buy or sell their home. We are not to give anything for referrals from other people also. Fines can be up to $10,000 or imprisoned for not more than one year, or both.
Unfortunately this has nothing to do with RESPA. That deals with mortgages not real estate transactions. Just because there is a mortgage in the transaction doesn't mean RESPA covers the real estate agents. This regards lenders and title companies. It will only involve you as a licensee or company if you are taking "bribes" of one sort or another from lenders or title companies.
However, along a similar line there are some places where giving a "kickback" or "referral fee" to unlicensed people is illegal under the state real estate statutes. In Minnesota the exception is for principals to the transaction. I can't pay someone who is unlicensed for leads but I can pay any amount of my fees to either party to the transaction. Even the one who is not my client (full disclosure, of course).
As always, check your own state statutes. It seems most have this exception for principals.
But as to RESPA, your broker is way off base as is your company attorney. Not uncommon. This prohibition is regularly misread by real estate people and attorneys. Just had a course taught by an attorney that regularly works on RESPA violations. Said it was one of the most misunderstood areas out there.
Sorry.
Steele V. Propp
Foreclosure Specialist/ Loss Mitigator
Bank Owned Property Division
Schatz Group GMAC Real Estate
1009 Mainstreet
Minneapolis, MN 55343
(612) 325-6764 Direct Line/Cell
(952) 938-2593 Office
(952) 938-3831 Fax
mailto:SteeleP@aol.com
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