Posted by Frank Calderone on 12/14/06 11:42am
Msg #165901

RESPA and Fee Collection

After reviewing Section 8 of RESPA I think that a TC or SS that doesn't pay the Notary closing agent may be in violation of it. It states that "RESPA prohibits fee splitting and receiving unearned fees for services not actually performed". Since they did not perform the actual closing and collected a fee from the borrower for the closing ( You will need a closing confirmation) then they have collected an unearned fee. The penalty for this is a fine up to $10,000 and possible imprisonment up to one year. The borrower also may file a civil suit for up to 3 times the cost. ------- Any opinions on this..

Reply by Lisa Prestegard on 12/14/06 12:15pm
Msg #165914

Interesting, Frank. I am forwarding your post to my attorney friend to get his take on this.
Florida has a similar statute regarding subcontractors... if unpaid, we may sue for three times the original invoice amount plus court costs and fees.

Reply by Les_CO on 12/14/06 12:30pm
Msg #165923

I think they would answer by "finding the notary, and arranging for the signing" they were providing a service. Therefore charging a fee. As to not paying the notary...thats pure theft and should be treated as such.

Reply by Teresa Guerra on 12/14/06 1:57pm
Msg #165941

I think I will send a copy of that to the BBB in Portland, Oregon. I am trying to collect a fee from Articulate Signing Service from May. They are not cooperating thus far.

Reply by Kevin/Ct on 12/14/06 2:19pm
Msg #165949

Take a look at the rulings of the 2nd, 4th, 9 th and 11th Federal Circuit courts of appeal in this mattr with respect ti tird party vendors.

Reply by Kevin Ahern on 12/14/06 2:21pm
Msg #165951

Sorry for the spelling....that should read ...."in this matter with respect to third party vendors."

Reply by dickb/wi on 12/14/06 9:21pm
Msg #166021

I hate to throw cold water on.......

this frank but i believe you are misinterpreting the section.......what it is dealing with is "referal fees" when no service was actually performed......for instance a title co telling a mortgage broker "we will pay you $x for every buyer you refer to us for their title work"...or...a mortgage broker telling a real estate agent..i will send you a gift cert for dinner at a fine resturant for every buyer you send my way for their financing........this section deals with "kick backs" which are illegal.......why do i know this-----because i am a real estate broker and i have to teach it to my sales people and the National Assocn REALTORS sends us bulletins on this all the time ....espec this section........i feel your pain but this is not the section that will help us.......

Reply by Lisa Prestegard on 12/14/06 11:50pm
Msg #166035

Spoke to my attorney friend...

I, like Dick in Wisconsin, am a Real Estate Broker. Dick is right in that Sec. 8 refers specifically to 'kick-backs and inducements' (referrals) and is preached to us ad nauseum. However, my atty. friend said that, like every law, it is subject to interpretation and a good lawyer could possibly argue your point, Kevin.
I have much better luck with referencing Florida Subcontractor law when trying to collect, as it is very specific and applies spot-on.

Reply by David Kral on 12/15/06 6:46pm
Msg #166170

Pattern

Not paying one her or there, or paying less if the service is performed poorly by the notary might be one thing, but if a pattern is established, it would likely rise to the level of a violation.

Might be good to use on SOX and the Home Loan Center/ Lending Tree. Okay, here is the strategy....find the next attorney general that wants to run for higher office ....nothing like suing a financial institution on class action to make headlines.....

Reply by Les_CO on 12/16/06 12:27am
Msg #166199

Re: Pattern

Now there's an idea!!!!