Can Your Broker Be Your Lender with computerized loan origination?
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OurBroker® What's really happened is that much of the lending process has been automated, the Internet is bringing more information to the public, some consumers are looking for "one-stop" shopping, and HUD's view of what federal rules allow has evolved. The computerized loan origination is that realty brokers are increasingly involved in the loan origination process.
For many years real estate brokerage and a computerized loan origination system were seen as activities best performed by separate parties, a view now beginning to shift because of new rules and changing technologies.
But what would happen if a real estate broker performed services needed for the production of a loan? Unlike a naked referral, actual work is being done in such cases.
In essence, these are deals where the realty broker tells a lender that buyer Smith needs a loan and gets a fee in return. To this day naked referrals computerized loan origination -- a cute term for kickbacks -- are banned by RESPA. Under the 1974 Real Estate Settlement and MBS Procedures Act, known generally as RESPA, realty brokers are not allowed to make so-called "naked referrals."
Mortgage Banking Solutions answers some basic questions about Computerized Loan Origination Systems (CLO's) .
