Comments on: Go to hell, relo company http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/ Tracking Charlottesville's Real Estate Market since 2005 Sun, 12 Feb 2012 23:56:00 +0000 hourly 1 http://wordpress.org/?v= By: Jim Duncan http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/#comment-8635 Jim Duncan Thu, 23 Aug 2007 18:35:21 +0000 http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/#comment-8635 <em>ed note: The following is posted by Jim Duncan with Frazier's permission. </em> I enjoyed reading your article about referrals and their "attachments". Steering a client to one particular attorney(closing agent) is known as "running and capping", and has always been illegal in the past. Of course, given that many referrals these days come with some type of hidden compensation to the "referring" agent, be it the lender or realtor, who knows how RESPA would look at it. Big builders have been getting away with steering buyers to the builders own mortgage company with packages worth $10,000 to $30,000(according to the builder). Often the loan the buyer gets is significantly higher in rate and can include some fairly usurus fees. A book could be written(and probably is being done now) on all the irregularities in the industry. What we need is a clear and steady set of guidelines from the government and the GSEs(Fannie and Freddie). Mortgage guidelines change so frequently, no mortgage banker could possibly have full knowledge of all products. Fannie and Freddie need to set guidelines somewhere between restrictive and give the farm away. Then, they need to stay there. The government needs to set clear rules for lenders, realtors, and builders and then enforce these laws. Sorry for the long rambling, but all this has been bugging me for years, and I don't see much of it getting fixed. ed note: The following is posted by Jim Duncan with Frazier’s permission.

I enjoyed reading your article about referrals and their “attachments”.
Steering a client to one particular attorney(closing agent) is known as
“running and capping”, and has always been illegal in the past. Of course,
given that many referrals these days come with some type of hidden
compensation to the “referring” agent, be it the lender or realtor, who knows how RESPA would look at it. Big builders have been getting away with steering buyers to the builders own mortgage company with packages worth $10,000 to $30,000(according to the builder). Often the loan the buyer gets is significantly higher in rate and can include some fairly usurus fees.

A book could be written(and probably is being done now) on all the
irregularities in the industry. What we need is a clear and steady set of guidelines from the government and the GSEs(Fannie and Freddie). Mortgage guidelines change so frequently, no mortgage banker could possibly have full knowledge of all products. Fannie and Freddie need to set guidelines somewhere between restrictive and give the farm away. Then, they need to stay there. The government needs to set clear rules for lenders, realtors, and builders and then enforce these laws.

Sorry for the long rambling, but all this has been bugging me for years,
and I don’t see much of it getting fixed.

]]> By: Daniel Rothamel http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/#comment-8631 Daniel Rothamel Thu, 23 Aug 2007 17:38:34 +0000 http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/#comment-8631 We stopped working for Relo companies for many of the same reasons, except in the rarest of circumstances. Not allowing the purchaser to choose their own closing agent is a MAJOR red flag, whether or not it is a specific RESPA violation. Bottom line-- Relo companies suck. We stopped working for Relo companies for many of the same reasons, except in the rarest of circumstances. Not allowing the purchaser to choose their own closing agent is a MAJOR red flag, whether or not it is a specific RESPA violation. Bottom line– Relo companies suck.

]]> By: Jeremy Hart http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/#comment-8626 Jeremy Hart Thu, 23 Aug 2007 15:36:31 +0000 http://www.realcentralva.com/2007/08/23/go-to-hell-relo-company/#comment-8626 Well, you're on a tear this morning, aren't you? But you're right, relo fees are ridiculous. And they keep coming. We haven't seen a lot of the requirements that they use the same attorney <i>until recently</i>, but it's showing up more and more - particularly with one of the largest relocation companies ... and truthfully, why is that a good idea? I've asked that very question in a recent meeting, for an answer specifically as to how that requirement is not a violation of RESPA. Everyone appears to be stumped - to me, the answer is obvious. Thanks for providing this kind of transparency, I need to link this ... you've done a good job of breaking it down. Well, you’re on a tear this morning, aren’t you?

But you’re right, relo fees are ridiculous. And they keep coming. We haven’t seen a lot of the requirements that they use the same attorney until recently, but it’s showing up more and more – particularly with one of the largest relocation companies … and truthfully, why is that a good idea? I’ve asked that very question in a recent meeting, for an answer specifically as to how that requirement is not a violation of RESPA. Everyone appears to be stumped – to me, the answer is obvious.

Thanks for providing this kind of transparency, I need to link this … you’ve done a good job of breaking it down.

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