Mortgage brokers, loan originators, and real estate agents have all been warned NOT to accept any inducements from title insurance companies. Giving OR receiving an item of value in exchange for a referral of a federally related loan is already illegal under RESPA. However, HUD auditors do not routinely wander around inside real estate offices and mortgage companies checking out the latest title insurance company give-a-ways. A law without inforcement is basically like having no law at all. Most of the enforcement has been left up to state regulators. Read this blog post for more details.
Do you believe this new law will help level the competitive playing field within the title insurance industry? If yes, why? If no, why not?
I think the new law sucks. I have to spend so much and work so hard in order to acquire my new business. We are in a very tough market and every bit of help goes a long way. I work exclusively with one title and one Escrow Company when ever I have the choice. I believe that these so called kick backs if structured are actually a tool to gain more and new business. I work with my title and escrow because of their extreme attention to detail and great customer service.
As I continue this CE it just gets worse. This one takes the cake. What do they think, we have no concern what so ever for our own continued success by using well established professional, reliable title services. We develope relationships that work for our customer, thus they work for us. Perhaps I’ve been singled out and just never got the European Riviera vacation on my title company. This is another case of government at its best trying to do its best and falling short of the mark. I guess I’m a very small fish in the pond, but if they want to throw me in jail for my $2.00 coffee mug come and get me! When I get out I will still do business with the people I have some pull with. When its the first deal you do with a company you are at their mercy to get a good job, when its the 100th deal they have done for you, you just simply get a good job. End of story.
I wonder if they want to regulate all the gifts given to the Bankers by “The Big Pool of Money” wonder if they received $2.00 coffee cups etc.???? I do business with ethical Title and Escrow Companies that provide outstanding service to my clients. I do not expect the Title or Escrow to offer me any other incentive nor offer my clients any large or small gifts for thier service.
I dont think the law will make much difference. Service, detail, and cost are the factors that matter. Although I wouldn’t want to be audited just because Im using the title/escrow that I can rely on. It’ll be interesting to see how it’s enforced.
I can’t imagine using an inferior service because they bought me dinner or gave me a free round of golf. I make money providing a service to my client. I want the client to give me referrals because they were impressed and had a rewarding experience. These kind of regulations are aimed at the margins and are a nusance to the professionals in the business.