Builders’ incentives illegal?

From today’s WP –

If you have shopped for a newly built house in recent years, you have probably run into this: The builder offers you a substantial incentive — a finished patio, extra square footage or lush landscaping — if you agree to obtain your mortgage, and maybe your title and settlement services, through an affiliate of the builder.
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“What they’re doing here is discouraging buyers from shopping in the open market,” Savitt said. “They’re trying to steer people to the lenders they’ve got deals with, and they try to make your head spin with big incentives” that may be more illusory than real.
In many cases, the Buyer does fare much better by using the builder’s affiliates. This type of scenario is just now presenting itself now that Ryan Homes have moved into our market. It is hard to turn down this type of incentive – sometimes a $20k incentive to use their lender.