Respa follow up

Last week I did a post titled "Lets help Steve!" asking for ideas on a gratitude luncheon for Realtors. 

 

Karen F. commented: I don't want to rain on anyone's parade but Steve has to check the RESPA Rules. I am with a large lender and a few years back one of our LO's did something similar to what Steve is doing and some of the REALTORS who attended were fined $10,000 by HUD. Needless to say, the agents weren't happy to be slapped with a $10,000 bill just because they attended a party. The way to keep out of trouble with RESPA is to post an announcement in the business papers so that all Realtors are invited. Ridiculous? YES! True? YES! Will Realtors that don't know you come? Not likely..

 

I didn't think it was a Respa violation since the LO was not "asking" for referrals, but decided to go straight to the source and ask HUD.  I have directed questions in the past to  HSGRESPA@hud.gov and normally receive an answer back within a day.  This time it did take two emails and a few extra days, but here is the response:

 

Ms. Sawyer –

 

RESPA prohibits anyone from giving or getting any thing of value for the referral of real estate settlement service business.  A “gratitude luncheon” could be seen as a thing of value for referrals.  The same is true for “giveaways” during lunch.

 

Andrew Fay

 

The good news is that HUD does still employ real people that are there to help us stay on the straight and narrow.  The bad news is that I was incorrect. 

Comments

[Corrie]

I also commented on your burn out post below - but I think this is part of why I feel the way I do. It is getting so hard to get the business AND then get it closed! Good luck to Steve - I hope he lets us know what he does and how it goes.

[Steve SchraderBacher]

Thanks for letting me know. I really appreciate it. I have to make sure to invite from all the offices, the 18 were from 6 different offices in the metro Des Moines Area. I'm so glad I had you post this, because I did not realize what all was involved from the RESPA side of things.

[Debbie Stevens]

Nice to know we can contact HUD but too bad about the answer. I'd also like to hear how it goes for Steve