“CFPB, Real Estate Companies and Affiliate Companies”

I was reading an article about the CFPB fining a Alabama real estate company $500,000. The charges had to do with this real estate company steering their customers to a title company which they had an ownership interest in. Thus creating a RESPA violation.

This is nothing new and has been going on forever. We are constantly being told that if there is an affiliate relationship with a company that you are referring and if it is not disclosed to the client, along with giving the client additional options, then this is a violation.

I run in to this situation from time to time. There are real estate companies that have loan officers that have “Desk Space” within the office. Clients are often put into uncomfortable positions of having to make a choice they don’t want to make or an agent may feel an obligation to refer the loan officer in that office.

Anthony and Andrea were put into this kind of uncomfortable situation. They called to look at a home, they had not been preapproved, as of yet, so the agent told them, they couldn’t see the home unless they were preapproved, which makes good sense. The agent told them there was a loan officer in her office and she could put him on the phone.

They went through a 10 minute process and the loan officer told them, he would give the agent a pre-qualification letter. They then made arrangements to see the home and made an offer. After some negotiations over a couple of days, they had an accepted contract.

While the negotiations were going on, they called me, letting me know they had been referred and explained they had already been pre-qualified and how all that happened. I set up an appointment to meet with them to do the mortgage application.

During the application process, they told me that once they finalized the sales agreement, the agent kept pushing them to set up an appointment with the loan officer in the office. When told they would be getting their mortgage elsewhere, the agent wasn’t a happy camper.

After I did the mortgage application, I called the agent and asked for all the contact information and that I looked forward to working with her to complete the transaction with our mutual client.

There are many complaints being investigated by the CFPB, I’m concerned situations like this will result in more fines.