Mr Bill Polack the unlicensed ex loan officer who claims "I enjoy helping people" states :
"The referral fees paid to me are not stated as origination on the closing documents (there is no HUD-1). The loans I get for people are not covered by RESPA. Do you think RESPA allows loans at 15% with 5 points in fees?"
Anyone that thinks taking a referral fee for referring hard money lenders with 15% rates at the cost of 5 points is not particularly "helpful" .
Just so we all get the full picture of Mr Polack:
Item #1) On this thread he clearly stated:
"I'd have to do a loan modification with them. It costs money up front (usually between $1500 to $2500 depending on the complexity of the loan)."
The word "I'd" would imply YOU! YOU would therefore be the person doing the loan mod YOU just solicited. YOU just stated that the loan mod YOU just solicited required an up front fee of $1500, to $2500 in violation of California law; and you also have no license as you clearly stated to even do one, fee or not.
Item #2) On this thread YOU clearly stated:
"I am an independent consultant with no license and that I get paid referral fees by those I refer business"
This is absolutely a violation of RESPA.
Regarding referral fees:
Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or anything of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.
What is a federally related mortgage loan you ask?
Code of Federal Regulations
Original Date: 1999-04-01
Title: Section 3500.2 - Definitions.
"Federally related mortgage loan or mortgage loan means as follows:
(1) Any loan (other than temporary financing, such as a construction loan):
(i) That is secured by a first or subordinate lien on residential real property, including a refinancing of any secured loan on residential real property upon which there is either:
(A) Located or, following settlement, will be constructed using proceeds of the loan, a structure or structures designed principally for occupancy of from one to four families (including individual units of condominiums and cooperatives and including any related interests, such as a share in the cooperative or right to occupancy of the unit); "
There are others all the way to "F" but it's covered by the first choice. Hard money loans on residential properties can be covered by RESPA.
Thanks again for multiple admissions of a criminal behavior and intent.
Violations of Section 8's anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.