Legalizing Criminal Activity – It’ll Take More Than A Finger To Stop The Flood In This Dam

Consumer protections have been put in place for good reasons, so why are title companies and their mortgage industry cronies trying to remove one of the most obvious safeguards? Could it be profit? That’s the only obvious conclusion any sane, thinking person would reach.


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Consumer Watchdog recently issued a press release, sharing the fact that “big mortgage bundlers tied to title companies and the real estate lobby” are trying to get Congress to allow kick-backs. Insane, right?

Carmen Balber, Washington, DC director for Consumer Watchdog highlights the concerns that allowing compensation for a business referral could have on the industry. “Homeowners in this country need honest advice and fair dealing from their real estate agents, not new ripoffs blessed by Congress. The House should vote on the record and in the light of day on this bill to roll back protections and legalize kickbacks to realtors.”

Americans for Financial Reform, Consumer Watchdog and other consumer groups have voiced their disapproval in a letter to Congress sent yesterday, the 1st of August.

The bill, HR 2446, would allow realtors to receive payment for recommending particular home warranty sellers to their clients – a move which RESPA the (Real Estate Settlement Procedures Act) currently forbids.

The letter stated, in part, that “Home buyers are encouraged to trust their real estate agent’s judgment. Allowing agents to receive ‘referral fees’ for steering borrowers to particular products, and/or encouraging them to buy a particular product would create a conflict of interest for the agent. A good product should not need a kickback/gift/incentive to succeed.”

The effect that such legislation would have on the industry is unconscionable. Yes, in reality, illegal “kick-backs” do happen in the business, don’t let anyone tell you different, however, in this humble writer’s opinion this truth does not mean the action needs to be encouraged.

What do you think about this bill? Should it be allowed to proceed, and if so, where does it stop?

Anita Cooper About Anita Cooper

Anita Cooper is the founder of Northwoods Writer, a marketing resource for real estate professionals.

Error-free, persuasive writing that meets or exceeds expectations is her obsession...that and She lives with her family in the beautiful Northwoods of Wisconsin when they’re not cruising the highways and byways on the lookout for something new and interesting or at least calm and relaxing.


  1. Esther Johnson says

    I don’t understand why some home warranty companies can pay a kickback to the agent and some cannot. The one’s that do have a checklist they say is approved by HUD. Is it?