I just glossed over this, but I would GUESS that since RESPA pertains to federally funded and insured mortgages, and this program provides liquidation of equity via private investors who secure their investment with a lien against the property . . . that may be the loophole.

Why does anyone assume that some "Legal" department approved it?

Builders violate RESPA all the time when they tie benefits to using their mortgage and their title company.  Until someone complains, it is business as usual. 

I once turned in a dirtbag broker who was forcing my buyer to use their affiliated services.  In addition, their title company did not close according to the commission as stated in the contract...they paid me less and the listing office more. (contrary to what the contract stated)

The response from the state was:  "Yes Eve, you are probably right however, we do not have the manpower to persue it."

Personally, I see a big problem with that ad...regardless of how they spin it.

Eve

No where does it say a Realor® earns 2.5% commission. Perhaps it is directed solely for independent mortgage brokers?

Probably because no one will take the time to refer them.

 Good Saturday morning Val. I'm sure they had attorneys go through this to make sure that it did not violate RESPA.

Val - I'm not exactly sure whether this is a RESPA violation or not. I do know a few years back we had agents who were acting as lenders and double dipping.

I don't think I would touch this unless I got some confirmation that it was perfectly legal.

I think it is just a referral.

Even if it's a loophole, I'd be careful.  I don't want to be the one they go after if there is a loophole in the loophole!  Not worth going to Club Fed for a referral fee.

Probably not a federally backed loan, hopefully they know what they are doing

Val,
It certainly raises red flags. There is legal, ethical and best practice. Can this pass all three tests?

Very interesting.  I'm with Mike on this, it is targeting past clients so should be kosher.

Interesting question - perhaps bring it to Judy Lowe's (AZ Real Estate Commissioner) attention?

this is no different than a referral program. this is NOT part of a ongoing or potential deal that is eminent for your client this is a past client or in your sphere and looking to make a referral to a equity lender. there is nothing illegal with this

This is a refi for reverse mortgage and not sure if RESPA applies as title and ownership remains . But I think this is not the right way to do business. 

Val Evans Unless they are licensed brokers, this may be considered a kickback for sending them referrals. Don't know for sure.

WOW...how are they getting away with that???  advertising commission percentage and dollar figures.... unbelievable....

Interesting. I wonder if it's because it's a refi? I have no idea....but would never consider doing it.