Can a Real Estate Agent Steer Clients Toward a Lender?

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Question:

Are there any federal statutes that address the extent to which a real estate agent or developer may encourage a potential buyer to work with a particular lender, whether there is a financial benefit to the buyer or otherwise?

Answer:

I believe real estate agents will often steer clients toward a particular lender because of rates, fees and the desire to get the buyer qualified as soon as possible. The problem arises when the agent gets paid by the lender for doing this. This is where the Section 8 kickback rule comes in.

I don't know of any ethics policies requiring a real estate agent to rotate lenders. In the interest of their clients, the buyers, the agent should be going for the best deal for them.

First published on BankersOnline.com 3/21/05