RESPA And Referral Fees
I have a question about giving referral fees. As I understand it, the RESPA rules come into play when there is a financing transaction. And, it applies when a vendor paying one of the parties offering services in a loan transaction to direct business to them.
But, what if there is no loan in the works? What if a mortgage broker was getting a referral fee but was not putting a loan together?
What I'm talking about is an example where, as an investor trying to rent/sell a house, you give brokers referral type fees to send you their clients who aren't able to qualify for a conventional loan?
For those brokers' would-be prospects that can't qualify and they can't do anything for them, what if you paid the broker a couple hundred bucks to refer them and you put them into one of your properties either as a renter or a lease/optionee or a land contractee?
I know that, as an investor, I can pay any number of other types of people referral fees for finding tenants or for finding properties for me. But, is there anything wrong with this situation I described above with respect to mortgage brokers?
And, for that matter, what if you wanted to arrange a similar deal with real estate agents who have either buyers or sellers that either can't qualify to buy or they can't sell their home?
Is there anything wrong with doing this? If so, why? If it is, can you think of a solution around it that is legal?
Even if RESPA's anti-kickback provisions don't apply, what may apply is the RE licensing law of the particular state. This may prohibit people who are not RE licensed from being paid compensation for assisting other people in locating, negotiating, selling, leasing or obtaining a property. Whether and to what extent that law is strictly enforced may be another matter, but if your state has such a law, then the mortgage broker may have a problem. In addition, if mortgage brokers are required to be licensed by their state banking dept, their receiving such compensation may also violate their mortgage broker licensing laws.