Hi, Troy Garris, partner of Wienerbrottsky-Keyter, and chair of the Texas MBA's Red Compliance Committee.
Today, the CFPB issues consent orders against two real estate brokers and two lenders, taking very aggressive positions on Section 8.
Today, we're going to focus on the required pre-qualifications in the consent orders.
But first, a word about the TMBA.
A lawyer in a fedora.
Shut up and sit down.
May 21st to 23rd is the 101st annual convention of the Texas MBA.
It's going to be at the High Hill Country Resort in San Antonio.
We're going to have George W. Bush.
We're going to have Dave Motley.
We're going to have Bill Hart, a number of other speakers.
It's going to be a fantastic event. You should be there.
Also on May 22nd, we're going to have the next round of the boot camp from the Red Compliance Committee.
This time, it's going to be HUMDA. You're going to want to be there. You're going to want to learn about this stuff.
It's coming quickly, and you need to know what to do for your company for HUMDA.
These are going to be fantastic events with fantastic speakers.
Put these on your calendar. Attend. It's going to be a great time. It's going to be very informative.
I'll be there.
Will you?
Topic of the day.
Lenders, LOs, and management. The CFPB issued consent orders against two realtors and two lenders just recently.
The biggest issue is a very aggressive Section 8 position.
Today, we're going to talk about specifically the focus on allegations of requiring a pre-qualification with a specific lender.
In this consent order, the CFPB states that one of the real estate brokers had a very complicated relationship with the lender,
including lead agreements, death licensing agreements, and forced pre-qualifications.
What are forced pre-qualifications? Well, what the CFPB says, the arrangement was,
the broker had its agents require all consumers to pre-qualify with a specific lender in order to submit an offer on a listing.
Some agents actually wrote the listings into the agent-only section on the MLS website.
This is the site that consumers couldn't see, but there would be a notation that would say something to the effect of,
if you want to submit an offer on this property, you must have your buyer pre-qualify with this specific lender.
Some agents allegedly forced the consumers to pre-qualify with this specific lender,
even if the consumer already had a pre-qualification.
Similarly, some of the agents forced the consumer to pre-qualify, even if it was a cash-only offer.
The CFPB says that the broker got paid for each one of these pre-qualification so-called referrals.
This is an area where we get calls all the time. Is this an actual referral? Is it not a referral?
These are difficult questions. You've got to work through each of the factual scenarios as they come along.
You've got to be careful. Section 8 should always be on your mind.
Like I said in the beginning, this is a mini-series.
We're talking about each of the issues that pop up in that recent batch of consent orders.
If you have questions, call me. I can send you the information forward, share, subscribe, and comment below.
Tell me what you want to hear about, and we'll give that information to you.
I'm Troy Garris, and that's the law.
