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Again you mentioned that it is 'frowned upon'. Frowned upon and a felony is two different things.
Most realtors dont 'steer' their clients to a title company/mortgage company for 'kickbacks', they simply do it to get the deal CLOSED. Any person would prefer to close the deal 'inhouse' to make sure they will get their paycheck at the end of the month.
Receiving 'kickbacks' is illegal, but telling someone to go use their mortgage company isn't illegal. It would be ILLEGAL if the builder was telling everyone that they will only offer the incentives to a certain race class.
You state that it is a law....where can I find this law?
I'm sure someone would've reported every builder in the United States by now if it was illegal.
Quote:
Originally Posted by robg8888
I am not talking about steering towards an area or neighborhood. What I mean is that, it is illigal for a realtor or builder to "steer" you towards a certain mortgage company or title company. That is a backhanded way of paying kickbacks. That is frowned upon severly by the governing bodies. Very simply put, a builder or realtor HAS to offer the same incentives whether you use their title and or mortgage company. Laws are in place to favor the buyer, and they encourage the buyer to get multiple quotes. Anyone who thinks that steering is ok, don't know the laws. They can't redline, discriminate, or steer.
Builders DO offer this to everyone, but where does it say that they have to offer it to your lender? Just wondering what law are we speaking about here.
You see you cant 'force' a builder to do something.
Last time I checked 'mortgage lenders' was not a protected class.
If the builder were to say that they are denying the lender because of 'race' then it would be a different story.
If the builder were to say...If you want to buy my house...you need to use my SUBPRIME lender..than that's a different story also.
If the builder states if you want the incentives you need to use my lender....that's not illegal...he is stating that IF YOU WANT THE INCENTIVES...which means it's YOUR CHOICE......you can always use your lender but not have the incentives.
Quote:
Originally Posted by robg8888
Jeff, I should have been clearer. Builders CAN offer these incentives, and they can also offer them to everyone. What I meant was that they HAVE to offer the same incentives to anyone, regadless of what mortgage company or title company you decide to use. You just tell them: "Listen, I want to let you know that I am well versed in real estate law, and the state's position on "steering" practices. After speaking with my attorney, we fully expect to recieve the same incentives that you are offering, regardless of what company I choose to originate my loan. The same goes for the title company. I'd rather avoid having to inform the state should you disagree, so with that said, have your mortgage company provide me with a favorable quote. I will be doing my due dilligence, and getting at least 2 other quotes. I of course will go with whoever gives me the lowest rates, and most desirable terms. The same goes for your title company. I'll be happy to see their fees up front, but reserve the right to decide who will facilitate my closing, Unless of course, the builder is paying for the title fees and warrantee deed. Just let me be clear that I am not here to get your company in trouble, but if state laws are circumvented, and it thwarts my efforts in getting the best and most legal deal for my family, I will have not hesitate to have my attorney make the state aware of the problem. (you'll get what you want, as well as you should)
You are as wrong as you can be, and I do know the laws. So what if I said "frowned upon"? It's illigal. Is that better for you? It is a form of kickback. A kickback doesn't have to me in the form of money. State laws are in place to prevent "good ol' boy networks". "hey, send em' my way, and I'll do the same" Not good. It is illigal for a realtor to say "use this mortgage company" "THIS" being the key word. By law, they have to refer at least 3 companies. Giving an incentive to someone, if they use THIER mortgage company IS in fact steering. They have to offer the same deal to everyone, regardless of what mortgage company they use. Trust me, I am right. What you consider to be ok, id is direct violation of state laws, and NOT in the best interest of the consumer.
You are way off point on this. You said: "Builders DO offer this to everyone, but where does it say that they have to offer it to your lender? Just wondering what law are we speaking about here.
You see you cant 'force' a builder to do something.
Last time I checked 'mortgage lenders' was not a protected class."
We are not talking about making the same offer to a lender, or a broker. The builder or a realtor has to offer the same incentives to the general public, regardless of whether their mortgage company is used or not. Very simple.
And no, it's not in the buyer's best interest to use "their" mortgage company. That statement tells me how clueless you really are. All it benefits is the seller. It is in the best interest of any buyer, to obtain at least 3 or more quotes. I beat builder's mortgage company's rates all day long. See? I have the better deal, not the builder.
And yes, it DOES get reported. Builders get fined, and realtors can lose their license. Just because YOU don't hear about builders getting in trouble, doesn't mean it isn't happening. I have 18 years in this business, I HAVE in fact seen it happen. I've also quoted the laws, and had builders immediately offer the incentive, while my customer had ME do the financing.
"Savitt, who for more than a year has urged federal and state officials to aggressively police builder incentives, says antitrust and unfair trade practice issues also are involved.
According to the Federal Trade Commission's Web site, "tie-in sales" may violate federal antitrust law: "The sale of one product on condition that a customer purchase a second product, which the customer may not want or can buy elsewhere at a lower price, is a tie-in. Requirements like these are illegal if they harm competition."
Savitt and other mortgage brokers argue that when a builder links an upgrade or closing cost rebate to the required use of its affiliated lender, that fits the definition of a tie-in. And when the tied-in mortgage is at a higher cost than available elsewhere and effectively prevents the customer from choosing the lower-cost competing alternative, that fits the definition of "harming competition."
Mortgage Brokers Ask HUD To Investigate Builder "Incentives" To Homebuyers.
by Kenneth R. Harney
Home builders who require buyers to use their affiliated mortgage companies in exchange for thousands of dollars worth of "incentives" -- upgrades, extra square footage, and deeply-discounted closing costs -- may be violating federal law and misleading consumers.
That's the contention of the National Association of Mortgage Brokers (NAMB), the largest professional group representing the country's 50,000-plus mortgage brokers. In a recent meeting with top HUD officials, including federal housing commissioner John C. Weicher, a delegation of mortgage brokers presented what they called "hard evidence" that builder financing incentives frequently violate both the Real Estate Settlement Procedures Act (RESPA) and federal antitrust statutes. Worse yet, said NAMB, the incentives themselves often encourage or force new home buyers into much costlier mortgage deals than they could obtain on the free market -- thereby negating any real savings on the house or closing costs.
Marc Savitt, a West Virginia broker and director of NAMB's government affairs committee, led the delegation and gave HUD officials a thick file of alleged abuses by builders -- some of them well known national firms -- in multiple states. Savitt said he visited five new home subdivisions on a recent trip to Florida, posing as an ordinary home purchaser. In all five subdivisions, according to Savitt, he found violations of RESPA rules.
by the way there is no law for 3mortgage companies.
you are liable if you give them 10 companies...and any of them do anything wrong.
Quote:
Originally Posted by robg8888
You are as wrong as you can be, and I do know the laws. So what if I said "frowned upon"? It's illigal. Is that better for you? It is a form of kickback. A kickback doesn't have to me in the form of money. State laws are in place to prevent "good ol' boy networks". "hey, send em' my way, and I'll do the same" Not good. It is illigal for a realtor to say "use this mortgage company" "THIS" being the key word. By law, they have to refer at least 3 companies. Giving an incentive to someone, if they use THIER mortgage company IS in fact steering. They have to offer the same deal to everyone, regardless of what mortgage company they use. Trust me, I am right. What you consider to be ok, id is direct violation of state laws, and NOT in the best interest of the consumer.
You are way off point on this. You said: "Builders DO offer this to everyone, but where does it say that they have to offer it to your lender? Just wondering what law are we speaking about here.
You see you cant 'force' a builder to do something.
Last time I checked 'mortgage lenders' was not a protected class."
We are not talking about making the same offer to a lender, or a broker. The builder or a realtor has to offer the same incentives to the general public, regardless of whether their mortgage company is used or not. Very simple.
And no, it's not in the buyer's best interest to use "their" mortgage company. That statement tells me how clueless you really are. All it benefits is the seller. It is in the best interest of any buyer, to obtain at least 3 or more quotes. I beat builder's mortgage company's rates all day long. See? I have the better deal, not the builder.
And yes, it DOES get reported. Builders get fined, and realtors can lose their license. Just because YOU don't hear about builders getting in trouble, doesn't mean it isn't happening. I have 18 years in this business, I HAVE in fact seen it happen. I've also quoted the laws, and had builders immediately offer the incentive, while my customer had ME do the financing.
PLEASE READ YOUR OWN POSTS....IT SAYS MAYBE BE VIOLATING.
Also, read your sources....it was written in MAY 2005. Builders are still doing it today, and it's obvious that they're not breaking the law. Otherwise they would be out of business!
Quote:
Originally Posted by robg8888
Don't believe me? Read for yourself:
"Savitt, who for more than a year has urged federal and state officials to aggressively police builder incentives, says antitrust and unfair trade practice issues also are involved.
According to the Federal Trade Commission's Web site, "tie-in sales" may violate federal antitrust law: "The sale of one product on condition that a customer purchase a second product, which the customer may not want or can buy elsewhere at a lower price, is a tie-in. Requirements like these are illegal if they harm competition."
Savitt and other mortgage brokers argue that when a builder links an upgrade or closing cost rebate to the required use of its affiliated lender, that fits the definition of a tie-in. And when the tied-in mortgage is at a higher cost than available elsewhere and effectively prevents the customer from choosing the lower-cost competing alternative, that fits the definition of "harming competition."
Mortgage Brokers Ask HUD To Investigate Builder "Incentives" To Homebuyers.
by Kenneth R. Harney
Home builders who require buyers to use their affiliated mortgage companies in exchange for thousands of dollars worth of "incentives" -- upgrades, extra square footage, and deeply-discounted closing costs -- may be violating federal law and misleading consumers.
That's the contention of the National Association of Mortgage Brokers (NAMB), the largest professional group representing the country's 50,000-plus mortgage brokers. In a recent meeting with top HUD officials, including federal housing commissioner John C. Weicher, a delegation of mortgage brokers presented what they called "hard evidence" that builder financing incentives frequently violate both the Real Estate Settlement Procedures Act (RESPA) and federal antitrust statutes. Worse yet, said NAMB, the incentives themselves often encourage or force new home buyers into much costlier mortgage deals than they could obtain on the free market -- thereby negating any real savings on the house or closing costs.
Marc Savitt, a West Virginia broker and director of NAMB's government affairs committee, led the delegation and gave HUD officials a thick file of alleged abuses by builders -- some of them well known national firms -- in multiple states. Savitt said he visited five new home subdivisions on a recent trip to Florida, posing as an ordinary home purchaser. In all five subdivisions, according to Savitt, he found violations of RESPA rules.
Nope. I was in your shoes a few months ago, and I spoke to a real estate attorney, and I took the state's realtor's class.
That's how I know that you can refer to 1 mortgage company...and dont have to refer to 3. That's a 'company' policy, and not a federal or NC/SC state law.
I'm also a mortgage broker...and I dont like it when builders give the fake incentives to homebuyers. All the incentives is built into the purchase price.
My point is that I was in your shoes a few months ago...and a few real estate attorneys have mentioned that builders have 'loopholes'.
As your prior posts state....they brought it to the attention of HUD, but nothing has been done. I have never heard of fines being given either.
If it were truly violating the federal/state laws, then these builders would be out of business!
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