Is it commonplace for RE Agents to get referral fees from mortgage brokers in commercial deals?

In General Area - Asked by Stephen F. - May 11, 2009
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Answer(s)

Jeff F.
Broker/Agent
Jenkintown, PA

Better check to make sure no RESPA violations are triggered.

May 12, 2009
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Heather W.
Broker/Agent
Scottsdale, AZ

Regarding Jeff's Comments, RESPA only applies to residential 1-4 family units on federally insured loans :RESPA in general
RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD's Office of RESPA and Interstate Land Sales is responsible for enforcing RESPA.
Excerpted from the HUD website.
That being said, as having worked as both a commercial lender before and commercial broker currently it would not be considered "commonplace" to do it and you have to check in to your state laws as UCC's sometimes prohibit those things. It usually only happens when both companies are owned by the same company or person. My personal choice is to have my lender be the best at what he does and know when he says its going to close, it closes then to receive some paltry sum just for using him. For me, not worth the price of professionalism. For more information and helpful tips, log in to listen to my radio show on Saturdays.

May 12, 2009
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Paul S.
Broker/Agent
Glendora, CA

Agents can get paid on the loans. There are times that the agent is actually acting as an arm of the lender or mortgage broker. In this case the agent is actually doing a considerable amount of extra work that would normally be done by someone else. It is not unusual for a client to be in one area of the country, the loan broker in another, the property in another and the actual lender in another. The real estate agent may need to compile all the paperwork that will be necessary for the lender and may also be directly involved with signing of the loan documents. The fee that would be paid to the agent for this service comes from the lender or loan broker from whatever part of their fee structure they choose to pay it from.
A mortgage broker or lender may legally pay a refer fee (check your state) to an agent in a commercial transaction for doing absolutely nothing other than the referral? In residential 1-4, RESPA rules prohibit such a referral.

May 13, 2009
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