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#28754 - 04/03/05 06:25 PM RESPA and Lead Generation
Guest
Unregistered


We're considering a new web site which will drive buyers to view MLS listings and the question is, can a mortgage brokerage firm own a marketing company which specifically focuses on driving leads to Realtors and naturally mortgages to our company? I consider it basically the same as most lead generating companies that are out there, except we're creating our own leads. Any thoughts on Respa issues would be appreicated.

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#28755 - 04/04/05 03:27 PM Re: RESPA and Lead Generation
Jim Lee Offline
Major Contributor

Registered: 07/01/99
Posts: 4785
Loc: Knoxville, Tennessee, Knox Cou...
In my opinion it would be pretty close to the line.

The RESPA police are on a tear now about giving anything of other than nominal value to anyone in exchange for referring business.

I believe I would certainly get my corporate attornies to obtain a written blessing from HUD before proceeding with this venture.
_________________________
Jim Lee, REALTORĀ®, CRS, ABR, e-PRO
[url=www.KnoxvilleHomeCenter.com]www.KnoxvilleHomeCenter.com[/url]
[url=www.KnoxvilleTennesseeRealEstateBlog.com]www.KnoxvilleTennesseeRealEstateBlog.com[/url]
I am not an attorney & I am not giving you any legal advice.

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#28756 - 04/04/05 03:35 PM Re: RESPA and Lead Generation
Guest
Unregistered


Thanks Jim. I wonde rif it makes any difference if the company for the web site is totally separate? We would still obtain the leads and pay for them upon closing. The Realtors would still get a pre-approved buyer from us which would help us build relationships. Just thinking out loud. Thanks again.
Joe

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#28757 - 04/04/05 07:34 PM Re: RESPA and Lead Generation
TR Lawrence Offline
Member

Registered: 02/19/05
Posts: 63
Loc: Athens/Chattanooga/KnoxvilleTe...
Just curious- how is this any different from what Lendingtree dose - they promote web sites and loans then sell leads to RE agents? Its legal for them - I have bought a few leads from them via thier homegain web site. Last week they sent me an email where they joined up with the almight expensive realtor.com and we know what they promote to get more leads to sell to realtors
_________________________
Thanks TR Lawrence
of Athens Realty
423-745-6161 office
423-368-0137 cell
423-745-6163 fax

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#28758 - 04/04/05 08:46 PM Re: RESPA and Lead Generation
Jim Lee Offline
Major Contributor

Registered: 07/01/99
Posts: 4785
Loc: Knoxville, Tennessee, Knox Cou...
It's different because the guy above is looking to 'give' leads to Realtors which I'm assuming are then going to do business with his company.

Lending Tree sells the leads, via a real estate firm they own, to Realtors in exchange for a referral fee.

Are you saying you got an e mail from Lending Tree in which they said they were joining Realtor.com to generate leads???

If they did and Realtor.com is a party to that then it's a violation of Realtor.com's operating agreement with NAR.

If you still have that e mail I would be very grateful if you would forward it to me at: Jim@KnoxvilleMLS.com
_________________________
Jim Lee, REALTORĀ®, CRS, ABR, e-PRO
[url=www.KnoxvilleHomeCenter.com]www.KnoxvilleHomeCenter.com[/url]
[url=www.KnoxvilleTennesseeRealEstateBlog.com]www.KnoxvilleTennesseeRealEstateBlog.com[/url]
I am not an attorney & I am not giving you any legal advice.

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#28759 - 04/06/05 03:55 PM Re: RESPA and Lead Generation
Guest
Unregistered


Can an affiliated business arrangement work in this instance? My mortgage company owns a piece of a marketing firm. A real estate company owns a piece of the marketing firm. Potential buyers log on to become approved and are then passed onto the affiliated Real Estate firm. The real estate firm closes it's deal and pays the marketing arm a small fee. The mortgage company closes the loan and pays a fee for the lead to the marketing arm. Everyone gets their small share. In addition the marketing firm pay's out each investor it's share of the profits either as dividends or in some other manner. Does this have a chance?

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#28760 - 04/06/05 04:32 PM Re: RESPA and Lead Generation
Jim Lee Offline
Major Contributor

Registered: 07/01/99
Posts: 4785
Loc: Knoxville, Tennessee, Knox Cou...
Quote:
Originally posted by Joe A:
Can an affiliated business arrangement work in this instance? My mortgage company owns a piece of a marketing firm. A real estate company owns a piece of the marketing firm. Potential buyers log on to become approved and are then passed onto the affiliated Real Estate firm. The real estate firm closes it's deal and pays the marketing arm a small fee. The mortgage company closes the loan and pays a fee for the lead to the marketing arm. Everyone gets their small share. In addition the marketing firm pay's out each investor it's share of the profits either as dividends or in some other manner. Does this have a chance?
Ya got me pal.

I'm not an expert on RESPA matter but here's the name, e mail, and phone number of a very nice lady who is. I suggest you ask her.

janice_a._madison@hud.gov
Janice Madison
RESPA Compliance Specialist
202-708-0502
_________________________
Jim Lee, REALTORĀ®, CRS, ABR, e-PRO
[url=www.KnoxvilleHomeCenter.com]www.KnoxvilleHomeCenter.com[/url]
[url=www.KnoxvilleTennesseeRealEstateBlog.com]www.KnoxvilleTennesseeRealEstateBlog.com[/url]
I am not an attorney & I am not giving you any legal advice.

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#28761 - 04/06/05 05:39 PM Re: RESPA and Lead Generation
Guest
Unregistered


Thanks!

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#28762 - 04/07/05 12:40 PM Re: RESPA and Lead Generation
broker Offline
Major Contributor

Registered: 08/16/04
Posts: 2066
Loc: Cary, NC
You can not set this up like you propose.... to the best of my knowledge.... and I have studied the hell out of RESPA and controlled business arrangements and have drafted a few.

I know what you are trying to do... and there are some companies that 'justify' this through setting up another marketing entity.... but it is a very shady gray area an our atty. (that specialises in this) advises otherwise.

You can share profits based on ownership; you can structure a flat marketing fee plan (but compensation can not be changed each month); you can provide actual services and earn income, and do a couple of other things.... but you need to be careful. This also applies to other services besides mortgage lending.
_________________________
the real estate industry is changing...

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#28763 - 04/07/05 02:17 PM Re: RESPA and Lead Generation
Guest
Unregistered


Thanks! I think after all is said and done and with the info provided here and from others, I will be submitting a plan to the Respa Guru's at HUD. I believe from all I hear, that th emortgage company I own can own the website, refer the pre-approved borrowers to realtors, and recieve nothing in return for those leads and be Ok. No monies or anything of value will be exchanged by our firm and the Realtors. I'll keep you posted. Thanks again.

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#28764 - 07/18/05 05:42 PM Re: RESPA and Lead Generation
realtor/w/connections Offline
Member

Registered: 06/21/05
Posts: 17
Loc: San Diego
I think its fine, in fact I have clients that do and we have found a way to get RESPA off your back.

Shoot me an e-mail

chris@imresults.net
888-457-2001 ext.311

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