More tips on RESPA law, guidelines and violations for real estate agents and loan originators from former HUD investigator and RESPA expert, Dr. Gary Lacefield.

In this week’s video, Dr. Lacefield discusses an Atlanta branch of Coldwell Banker Residential Real Estate under investigation for RESPA violations that settled with HUD for a $250K payment.

View the RESPANewsUpdate.com video here. This educational video and the RESPANewsUpdate.com website were created by WebCasting.com, based in Dallas, Texas. This video is provided for free, compliments of Warrantech Advantage .

For more about Dr. Lacefield, visit RiskMitigation.net or GoGetRealEstate.com/Get/GLacefield.

Coldwell Banker changes its ways after HUD investigation: The Department of Housing and Urban Development announced a $250,000 settlement with Coldwell Banker Residential Real Estate, Inc. for violations of the Real Estate Settlement Procedures Act (RESPA). HUD asserted that Coldwell Banker’s Atlanta real estate brokerage offices paid higher sales commissions and offered gifts and other incentives to its sales agents for referring business to an affiliated title company.

Coldwell Banker Residential Real Estate, Inc. maintains an ownership interest in Regency Title Company in the Greater Atlanta area. After a year-long investigation, HUD found that Coldwell Banker Residential Real Estate, Inc. offered its sales agents incentives including trips, Atlanta Braves baseball tickets, and agent-of-the-month ads in local newspapers based on the number and volume of referrals to Regency Title. In addition, HUD discovered that certain agents who referred business to Regency Title received higher sales commissions or were paid immediately at time of closing. 



The Real Estate Settlement Procedures Act was enacted in 1974 to provide consumers advance disclosures of settlement charges and to prohibit illegal kickbacks and excessive fees in the home-buying process. Section 8 of RESPA prohibits a person from giving or accepting anything of value in exchange for the referral of settlement service business. 



Coldwell Banker Residential Real Estate, Inc. agreed to the $250,000 settlement and to cease the business practices that triggered HUD’s concern. In addition, Coldwell Banker Residential Real Estate, Inc. will notify all its real estate agents that any compensation to them based on referring business to affiliated partners is a violation of RESPA. 



However, the settlement agreement notes that Coldwell Banker “denies that its conduct violated RESPA and asserts that HUD’s allegations do not accurately portray its conduct; and further asserts that in some instances prior to HUD’s investigation and since the start of HUD’s investigation it has ceased any of the practices alleged above in which it had engaged.” 



Nevertheless, “The Parties desire to avoid formal proceedings, the cost of litigation and any further expense, and … agree that entering into this Settlement Agreement does not constitute an admission of liability or wrongdoing by Coldwell Banker,” the agreement states.

It was signed by both Montgomery and James M. Schmidt, senior vice president of Coldwell Banker Residential Real Estate.