HUD Ends Broker “Kickback” Program
February 25, 2008
Last week, HUD announced that the end of their broker incentive program. For the last three months, HUD has been offering $500 bonuses to real estate brokers who convince clients buying HUD foreclosure properties to use FHA financing.
The program came under scrutiny when a Michigan attorney claimed that the incentive program constituted an illegal “kickback”.
Freep.com reports:
“HUD awarded the $500 bonus to about 200 brokers since November, including 67 in Michigan, said HUD spokesman Brian Sullivan.
Under RESPA, anyone who awards kickbacks for referrals can face fines up to $10,000 and a possible 1-year prison sentence, said Sullivan. Often out-of-court settlement agreements are made, he said.”
After ending the old program, HUD announced a new incentive that awards the $500 to real estate brokers who sell a HUD home - regardless of whether or not their client chooses an FHA-insured loan.
Comments
Got something to say?