Compare Mortgage Quotes

Refinance Rates for Today

Please enable JavaScript for the best experience.

In the mean time, check out our refinance rates!

Company Loan Type APR Est. Pmt.

builders using their own lenders

Posted on: 21st Nov, 2006 02:31 pm
To whom it may concern:
I'm a realtor in Las Vegas, NV and all the builders are offering great incentives, however you have to use their lender and title company to get these incentive. Can they get away with this? Is this leagal?
Please let me know.

Thanks you so much,

Sylvia Bryan

[color=white:f44207b864].[/color:f44207b864]sylvia.bryan1@gmail.com
Hi,

If a person buys a house and the builder says the person will be provided a $3,000 upgrade if he obtains his loan through an affiliated lender then that is fine.

But if the builder increase the home price by $3,000 in order to give that person the rebate or discount then it is not real and also not legal.
Posted on: 21st Nov, 2006 03:11 pm
Hi Sylvia,

Under RESPA, builders are prohibited from requiring customers to use their own affiliates or subsidiaries for mortgage, title or other settlement related services.

What they can do is recommend affiliates, provided they also disclose the relationship. But certainly they can not force consumers to use them.

Thanks
Blue
Posted on: 21st Nov, 2006 03:22 pm
If a builder is offering any incentive package if a person takes the mortgage from a specific lender. And if the rate for the mortgage and other related fees are quite higher than the normal rates, then the person can file a complaint with the HUD's RESPA enforcement staff.

The only way a buyer can avoid this trap is to refuse deals that tie concessions to use of a preferred lender.
Posted on: 21st Nov, 2006 03:32 pm
Hi Sylvia,

The builders are there to get maximum profit through their business and that is why they are into such a deal. It's not illegal actually, it's their way of doing business. Being a realtor, you can work with the lender and title company suggested by the builders. But see to it that the persons you are dealing with have the license and fair working background.

Thanks,

Sara
Posted on: 21st Nov, 2006 07:43 pm
Page loaded in 0.200 seconds.