Latest Lending - Referral Topics

Mortgage Referral Fee Paid to Employees

12/15/2003

Can we pay a $50.00 referral fee to our employees for referring customers to our mortgage department? The fee would be conditioned on if the loan closes. These mortgage loans are sold to the secondary market and are table-funded.

Referral Fees For Commercial Loans

11/18/2002

Do you know of any regulations that would prohibit a thrift from paying referral fees (equal to 25 basis points) to a lumber company for referring speculative construction loan business to the thrift? These are commercial ventures.

If a Director provides RESPA settlement services, do we need to provide the Affiliated Business Arrangement Disclosure to every mortgage applicant?

11/18/2002

We were recently advised at the bank, where I am employed, that we must use the Affiliated Business Disclosure on every residential mortgage that we do. We are located in a small town where the majority of the customers we have choose to use the local attorney. I specify choose. Upon an examine we were told that it looked like we were making the customers use this particular attorney and that we had to give the Affiliated Disclosure on each an every mortgage because one of the attorneys is a board of director for our Holding company. Now, since we are doing this and a customer has chosen another attorney, it looks like we are soliciting for the local attorney. Do we indeed have to give this to every mortgage customer?

RESPA & Indirect Home Improvement Financing

10/21/2002

I have two questions regarding RESPA issues related to indirect home improvement financing. First, we are paying a broker - who is not an employee of the bank - for signing up contractors to submit credit applications on their customers to us. Since most of these loans are secured by a mortgage on a primary residence and we are paying the broker a percentage of total loan volume generated, how do we treat this with respect to the Good Faith Estimate and HUD-1A? Secondly, since we require hazard insurance coverage from an insurer chosen by the borrower, is it not permissible under RESPA to provide only an estimate of the annual hazard insurance cost on both the GFE and HUD-1A forms? We are being told that the GFE can reflect an estimate, but that the HUD-1A must be the actual annual premium amount being paid by a given borrower. This presents a problem, in that, since the program is indirect, we do not know what the actual premium cost is for any given borrower and , therefore, use an estimated cost amount on both documents. Are we in compliance?

Referral Fees For Commercial Loans

08/12/2002

Our bank is considering paying a referral fee to certain external sources for commercial loans that are originated. Are we requires to disclose this referral fee to the customer? Can the cost be passed onto the customer in some form?

Finding Finance Charges

07/01/2002

Fair Lending Emerging Issues

12/01/1996

When and What: Coverage Rules for Lending Regulations: RESPA

12/01/1996

Statistics, Facts & Such

03/01/1994