Mortgages jobs coast to coast; thoughts on LO comp

http://globalhomefinance.com

How 'bout that Chinese housing market? New home sales last year exceeded $1 trillion for the first time as property prices in cities the government considers "first tier" surged in the absence of more nationwide property curbs. The value of new homes sold in 2013 rose 27 percent from 2012. China's existing-homes market is about one-third of new homes by sales because the nation only allowed private home ownership in 1998. The government doesn't release data on existing-home sales. (New and existing home sales in the U.S. were about $1.1 trillion last year.)

Last week the CFPB charged that Fidelity, a St. Louis-based non-depository mortgage lender, entered into an agreement with a bank in which the bank referred potential borrowers to Fidelity in exchange for kickbacks. The kickbacks were disguised as inflated lease payments for renting office space within the bank. The Real Estate Settlement Procedures Act (RESPA) prohibits giving and receiving kickbacks for referrals of settlement-service business involving federally-related mortgages. When companies pay kickbacks in exchange for referrals, it can hurt competition and inflate real estate settlement costs for consumers, while creating an uneven playing field that puts law-abiding businesses at a disadvantage.

 

Shutting down kickbacks is worthwhile but could be quite a challenge. It didn't take too much digging to find this credit union press release out in California. And there is this from the DOJ website: "Real estate agent or broker commission rebates to borrowers do not violate Section 8 of RESPA as long as no part of the commission rebate is tied to a referral of business." May a real estate agent rebate a portion of the agent's commission to the borrower? If so, how should the rebate be listed on the HUD-1? According to HUD, yes, real estate agents may rebate a portion of the agent's commission to the borrower in a real estate transaction. The rebate must be listed as a credit on page 1 of the HUD-1 in Lines 204-209 and the name of the party giving the credit must be identified. Real estate agent or broker commission rebates to borrowers do not violate Section 8 of RESPA as long as no part of the commission rebate is tied to a referral of business. (Remember that RESPA is now administered by the CFPB.

I am not a compliance officer, but it would seem Redwood Credit Union's rebate program seems to fly in the face of the DOJ, although I'm sure their lawyers have fully explored and done their due diligence on this. Or the policy has changed in the last 18 months. ("Focus on the rebate. In exchange for a referral pipeline of quality home buyers and sellers in their market, participating realtors provide a percentage of their commission back to members at closing. 'Promote the rebate as a tremendous member benefit,' said Friedman. 'It is the single, largest benefit a member can receive from a credit union. What else pays a member $1,000 or $2,000 at no cost to the credit union? There's no other benefit you can offer that provides that level of return to the member at one time.'")

 

From Nevada, Primary Residential's SVP Burton Embry writes, "It continues to amaze me that companies are having such a hard time with LO compensation. We pay the same across the board regardless of loan type, whether it is a conventional, FHA, VA, or USDA loan which removes any incentive to push a consumer to one loan versus another. We pay the same for retail loans versus broker loans thereby removing any incentive to make a loan one way or another purely on a compensation motive. The basics of LO compensation are not that hard.  However, and this is hugely important now, if I am an LO and my company can't figure out what to do on LO compensation or I think my company might be getting it wrong, it is important to know that effective this month, LOs can now be held personally liable for the violations committed by their company.  LOs need to seriously think about that."

 

 WELCOME TO  2014

Our Phones - Wireless

Cooking - Fireless

Cars - Keyless

Food - Fatless

Tires - Tubeless

Dress - Sleeveless

Youth - Jobless

Leaders - Shameless

Relationships - Meaningless

Attitudes - Careless

Babies - Fatherless

Feelings - Heartless

Education - Valueless

Children - Mannerless

Country – Godless

We are speechless,  and Congress is CLUELESS!!