Mortgage news that matters

I recently responded to a post by a fellow blogger, Charles Turner. His blogs are Portland specific and overall it's a great blog. He won't respond to my attempts to get together for coffee, but that's OK. There are a lot of Realtors out there...

His blog can be found at PortlandRealEstateBlog.com

Following are my comments. For the rest of the story click on the above link.

Interesting twist on this blog.

RESPA does not allow us (mortgage brokers or real estate professionals to receive a "thing of value" for a referral or for the attempt to gain a referral. This certainly would include a kick back or referral fee. So, while it might happen, it's illegal if it does. If you're dealing with funds that transfer State lines, which most do, then it could be a Fed offense. Not good!!

Affiliated relationships are also going by the wayside as is evidenced by a Minnesota law suit. http://www.twincities.com/mld/twincities/news/16855258.htm . 1st Am Title had Joint Venture relationships with Realtors, mortgage brokers, builders... They recently had 35 JA's shut down. The problem was that dividends were paid as a part of the business transaction.
Builder Banker Coldwell Burnett is having problems now for steering their clients towards their in house Title company.

I'll take Charles word for it that they are not directly compensated for referrals to Columbia or Transnation. My experience is that several good friends of mine work for various Prudential shops and seem afraid to use anyone outside of Columbia or Transnation. There is a lot of pressure from the top down.

I know that other companies who have JA's share in profits...not necessarily on a per deal basis, but over time. Some allow for quicker checks at closing to the realtor, others offer retirement plans geared on JA profitability.

An excellent article written by a Realty Times contributing editor, Kenneth Harney, details this practise, and that if structured correctly, they can stand the test of litigation. http://realtytimes.com/rtcpages/20070305_realtyfirm.htm

So, should you do business with the title company or mortgage broker that the realtor refers you to? Yes, if after meeting with them you feel comfortable with them. Are you required to no. That's illegal.

The partnerships that I as an independent mortgage broker have with my Realtors and title companies are mutually beneficial. We do not receive kick backs, dividends, profit sharing or retirement plans. We help each other be successful by joint marketing, working together on deals and, over time, develop a track record of consistently getting deals done and covering each others backs. I do have several Realtors who try their best to get their clients to at least speak with me as they know that I will look out for their best interests as well as treat their clients with honesty and integrity. Basically, they trust me because of who I am, my professionalism and their experience with me.

Our clients enter into that partnership and they benefit from our experience together. Do they have to work with all of us as a team? No. Should they? Often times, yes.

In that I definitely agree with Charles.