La Mesa Agent Offers Referral Fee—in Apparent Violation of Federal Law

Dan Dobbs, a senior loan officer with American Commerce Mortgage in Newport Beach—but who also does business in La Mesa—sent me this bit of news this week. With his permission, I am including it here:

The Federal SAFE Act of 2010 empowered HUD and state regulatory agencies with both the mandate and the means to wipe out “fee splitting” (i.e. referral fees/kickbacks) between mortgage loan originators and real estate licensees. 

Beginning in 2011, federal and state agencies and local authorities will share information on compliance audits of licensees—when those audits reveal payments of compensation to any unlicensed individuals.    

Audits can be initiated and data now can be shared by a host of government agencies, including the IRS, state Franchise Tax Board, HUD, California Department of Corporations and California Department of Real Estate.

You may wonder how this federal law—part of the Real Estate Settlement Procedures Act (RESPA)—affects you. 

Although originally made to discourage large companies like lending institutions or even escrow companies from fee-splitting and kickbacks, the law was painted with such a wide brush that it also includes you and me. 

If I offered you compensation of any kind to refer me, I, too, would be guilty under this law. Although it is seldom that an agent or any unlicensed person taking a referral fee is prosecuted under the RESPA law, it is still a federal offense.

That is why I was surprised when one of my clients received this email from a La Mesa real estate agent:                               

SENT:  Thursday August 18, 2011  6:11 PM                   

SUBJECT: Real Estate Referral  

Hi, friends.  I just wanted to remind all of you that if you have any friends, co-workers or family members that are thinking of buying or selling a home PLEASE refer them to me.  I will pay a $150 - $350 referral fee per transaction.                                                   

Thank you and hope you are all well.

(Agent’s name, company and phone number redacted)

Welcome Back, Ben!

When I moved to La Mesa 23 years ago, the first place I ate lunch out was at Por Favor at the corner of La Mesa and Palm, next-door to where I now work.  Since I knew no one, my clients became my friends. 

So today  I was having a latte with my new friend Ben who was introduced to me by my slightly older friend Steven at my favorite Starbucks at Jackson and Fletcher Parkway.  We had closed escrow on a condo on Amaya Drive and he was excited to get started on settling in since for the last three months he had been staying with a family member while his personal belongings were in storage while we looked for the perfect home for him. 

Now that the wait was over, he became a bit more talkative about himself and his journey back to where he wants to be. 

After retiring from a state of California job at a relatively young age, he decided to move out of state where he could have a nice house and live comfortably on his retirement stipend. 

But one thing was missing. He didn't realize until he was gone how much he was going to miss Southern California.  With a big smile, he told me how happy he was to live in a condo and continue to work as long as he could live in La Mesa.  We are also glad you came to that decision, Ben.  Welcome back.

Mortgage Rates May Be at Half-Century Low

The industry’s focus this week is on mortgage rates, now on a three-week slide.  A 30-year, fixed-rate mortgage averages 4.15 percent with 0.7 points.  This is an all-time low since Freddie Mac started recording this data in 1971, and some say it is a 50-year low!

With rates this low and the prices of homes still depressed, homeownership is, in many cases, as affordable as renting.

This Week in La Mesa Real Estate:

There were 20 new listings in ZIPs 91941 and 91942.  Nineteen were single-family homes and one was a condo. 

My Picks of the Week

• One is 6288 De Camp Drive, 91942, built in 1955, with 4 bedrooms/2 baths and a pool for these hot August days. Don't be misled by the year it was built. This home has everything one wishes for in 2011.  Priced at $349,000, this is a traditional sale.   
• My second pick is at 5860 Nagel St. 91942, a corporate-owned 3 bedroom/2ba cottage, single level home with a fenced yard and one-car attached garage and priced at $250,000.