The Real Estate Settlement Procedures Act ("RESPA") is a federal statute that was enacted by Congress in 1974. A federal regulation implementing RESPA (Regulation X") has been promulgated by the United States Department of Housing and Urban Development ("HUD"). HUD is the federal agency charged with administering and enforcing RESPA, Regulation X and their requirements.

RESPA and Regulation X permit a lender to make reasonable payments to its agents and contractors for services actually performed in the origination, processing or funding of a loan, Based on interpretations of this provision in RESPA, and Regulation X, real estate agents can provide loan origination services and receive fair market compensation.

Other Federal laws such as the Truth in Lending Law and the Equal Credit Opportunity law also play a role in disclosures. The real estate industry has always had a State regulated as well as a private organizational self regulating body, which acts as a disciplinary arm to prevent "Consumer Abuse."

Competition and innovation lower settlement costs. Computerization with Internet software will contribute to the lowering of costs as Internet software becomes more available. On Government Programs such as FHA/VA and HUD, etc., the government dictates settlement costs. In private industry, it would be far-reaching for government to set price guidelines.

Loan Fee Compensation in the Real Estate and Mortgage Business
California law allows a licensed California Real Estate Broker (and sales agent) to conduct the business of a Mortgage Loan Broker. Mortgage Brokerage offices can work with Real Estate Brokerage offices in sharing loan fees, proportionate to their work.

Real Estate Brokers generally share commissions equally when an agent sells another Broker's listing. In the Loan Brokerage business, Loan Representatives have long received an equal share with their broker (50/50). The Loan Rep's are paid for "originating" the transaction; that means - procuring the loan and helping in the loan application process. Loan Reps earn their fees. They have to travel, meet with clients and work a schedule. Only a small percentage of interviews lead to a closed transaction. If Loan Reps were making a fortune, everyone would be doing it! So too with Real Estate Agents. Hard work with long hours produces a closed transaction in about one out of every ten clients. Can you imagine a real estate agent asking for a referral fee or even a mortgage loan officer offering a real estate agent a referral fee? Not in the competitive world of Internet mortgages that we know of. Competition drives down mortgage loan fees!

Referral Fees and RESPA RESPA states that paying a Referral Fee is illegal, however, compensation can be paid for an agent's work. Agents (through their brokers) can receive "Fair Market compensation for the services they actually perform." To learn more of how you can act as a Mortgage Agent, Register as an Agent by filling out the form below.

Registering as a National Mortgage Cooperating Agent It's Fast, Easy and FREE!

Once you have registered, we will confirm the status of your license with the DRE (by Internet) and you will be assigned an I.D. number, which will entitle you to access the proprietary information. You will instantly receive confirmation (if qualified) and you will receive compensation information.