Saturday, November 15, 2008

You be the Judge! Is this RESPA compliant?

Regardless of the type of market you are in, all loan officers, real estate agents and settlement agents need to be mindful of the Real Estate Settlement Procedures Act (RESPA), particularly with respect to Section 8 regarding kickbacks. Take the following quiz, and match with the answers below.

YOU BE THE JUDGE! Is this RESPA Compliant? (Answers below)

1. Lender keeps all business cards from every new application and uses them to send email newsletter of real estate issues to real estate agents?

2. Lender puts a business card from every real estate agent who sends a deal into Fishbowl for Fancy Dinner for 10?

3. Attorney has Fishbowl at Mortgage Lenders regional convention exhibit to win Big Bertha?

4. Lender visits friendly real estate Agent at open house; brings along coffee and Danish for two?

5. Lender provides catered luncheon for all agents in office every Friday?

6. Attorney brings in cold cuts and soda to real estate agents while conducting "Lunch and learn" about Condominium law?

7. Attorney pays real estate agent for Conference room rental in RE agent's office to conduct closings?

8. Lender pays Originator $100 for every 'pre-title order' she completes at time of pre-qualification?

9. Attorney pays all Lender's costs for "Staff Appreciation" party, but does not attend?

10. Real estate agent, Lender and Attorney use same ad to promote "local business' partnership?

Should you have any questions about RESPA, please do not hesitate to call or email one of our seven attorneys. If we do not know the answer right away, we'll be happy to research and get right back to you!

Attorneys: Derek Massey, Kathleen Dartez, Lee Snyder, Carol Ann Wildesen, Eric Oberer, Scott Mozingo and Elisa Kerr.

Answers: (1) Y (2) N (3) Y (4) Y (5) N (6) Y (7) Y (8) N (9) N (10) Y

NOTE: While the scenarios and the answers may be gray and represent a fuzzy rather than fine line between abiding by and violating RESPA, these are the answers as best defined by HUD today.

Mid-Atlantic Settlement Services

11350 McCormick Road Executive Plaza III, Suite 200

Hunt Valley, MD 21031

(800) 530-9372

Fax (800) 710-9918

RESPA quiz source: Mortgage Bankers Association of Maine