Home Buyers: Avoid Closing Fee Kickback Scams
September 18th, 2016
September 18th, 2016
Did you know that it’s against the law for people involved in the buying and selling of real estate, such as real estate agents, lenders, mortgage brokers, construction companies, title companies, home inspectors, etc., to receive kickbacks and unearned fees?
To protect consumers, Congress passed the Real Estate Settlement and Procedures Act (RESPA). This act states: “No person shall give and no person shall accept any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” What this means is, real estate agents, lenders, mortgage brokers, etc., cannot engage in activities that provide undisclosed kickbacks and referral fees to each other in order to increase the mortgage loan closing costs.
While it’s against the law for people in the mortgage industry to be involved in kickback schemes, unfortunately, that doesn’t mean these arrangements don’t happen. As a home buyer, you need to be aware of these kickback ploys and know how to avoid them.
Some common fraudulent activities involving real estate closings include:
Here are some things you can do to avoid being scammed in a kickback plot:
If you’re looking to buy a new home and want to work with a reputable mortgage broker, contact the loan specialists at Grandview Lending in Indianapolis. Grandview Lending’s business is based on family values like honesty, integrity and sincerity. We don’t engage in “bait and switch” closing costs schemes; and we don’t accept kickbacks for our services. If you have any questions regarding the fees you’re being charged, just ask our Senior Mortgage Specialists for an explanation.
When you work with Grandview Lending, you’ll have peace of mind knowing you’re working with someone who is trustworthy. But don’t just take our word for it, click here to read what our customers have to say about us.
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