Posted by River City on January 12, 2007 at 13:27:19:
Sorry, Eric, but referral fees are also a violation of RESPA (Real Estate Settlement Procedures Act). These are called “Section 8” violations. Section 8 of RESPA does allow payments pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and brokers. However, like I said before, these payments are generally paid at closing. If they are not paid at closing, someone is probably doing something illegal.
Wondering if a breach of contract has occured by seller (home builder). Contract states closing should occur within 5 days of purchaser being notified by seller of closing dates due to home being granted occupancy authorization. Closing was schedule to occur 12/29. Closing has been delayed by sevcen days currently and tomorrow will be the 8th day. Delay is exculsively beacuse broker who is affliated directly with lender has failed to recieve transfer of funds from direct lender which whom they have agreements and kick backs set up with. Thus this is the seller (builders) designated lender with whom and only whom buyer can recieve associated incentives. No fault in this delay on the buyers part. Contract indicates remedy to buyer by seller being return of deposits paid plus 3 thousand dollars. In this case deposit was 32K. We have requested this from seller and referenced the contract and the remedy to buyer indicated. Is this a cut & dry issue?
Re: breach of contract by seller question? - Posted by River City
Posted by River City on January 06, 2007 at 15:32:50:
You are making some serious allegations against the lender and the broker. What kind of funds would the broker be receiving from the lender? The broker’s funds should be paid at the closing table, not directly from the lender. “Kickbacks” are against RESPA and lenders and brokers can find themselves in serious trouble if HUD investigates and finds these things to be true.
Now, as far as the rest of your question. It is difficult to say whether or not a breach has occurred without reading your contract. Generally, builders have clauses in their contracts that can delay closings if necessary.
Well kickbacks is propbably the wrong term to use. It sounds like referal fees. As long as broker has informed you, the buyer, that he will be recieving compensation or a fee for you using the lender services, there should be nothing wrong with that. As long as all partys are aware this doesnt sound illegal, but Iam not a lawyer so consult one