Kickback: Confessions of a Mortgage Salesman

I confess. I stole thousands of dollars. Maybe even thousands of your dollars. Oh, I was never tried and put in prison for it. What I did was perfectly legal. And it is done every day in professional-looking offices all across the country. But let me explain. I was a mortgage loan officer. (Actually, a senior loan officer.) You'd know my mortgage company. They advertise a lot- on the radio, billboards, and telephone directory covers. The same place the "ambulance-chaser" lawyers advertise. Looking for the naive, unsophisticated buyers. Many of my clients needlessly paid me thousands of extra dollars in fees on their mortgages and refinancing transactions. I no longer am in the mortgage business. By your reading this book, it is my hope that you can save hundreds or even thousands of dollars on your next mortgage or refinance transaction. I hope, by this book, to pay back at least some of the money I stole.

There are many types of kickbacks. There is one example for everyone to know, it is related to escrow closing fee kickback scams:

A real estate agent had created a corporation which purchased interest in an escrow and title insurance company. Some corrupt builders grouped together and created a similar type of corporation and bought partial interest in that escrow company.

All the clients were then referred to their own title company by those builders and realtors. The title company then used to do return/kick back certain portion of the settlement and title fees to those builders and realtors.

This book will provide some insight into so many other types of kickbacks that we are not aware of.

David

This menace is present in real estate closings by way of inflated title fees and kickbacks to the lender. This is how it works -

The premium for the title insurance varies from one company to another and these policies are underwritten by large national insurers. Out of the title insurance paid by the borrower only a certain amount goes into payment of the premium. Rest of the title insurance fee is retained by the insurance company as profit and for covering overhead expenses. This is quite legal. But what is considered illegal is that the title agent returning or kicking back a specific portion of the total fees to the lender or realtor through whom they got the business.

Heinemeier Hansson


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