Our leads are your leads
Posted in RESPA reform By Matt Carter, Tuesday, July 29, 2008.Here's a title and settlement services provider that's found a creative way to get business: build a network of lead generation Web sites and give -- oops, I mean sell -- the leads to loan originators.
"We just ask that all title derived from our loans are sent to us and that we have a relationship with you in closing a portion of your own generated business," Pittsburgh, Penn.-based TruClose Financial Services LLC promised Monday in an ActiveRain blog post. "It's a complete win / win for both sides. I would imagine we can add 20-30 closings a month to your pipeline which I would believe to be more profitable than any joint venture in place today."
The company promises the lead program "is completely RESPA compliant for we attach a $0.25 fee to each lead."
Coincidentally, I got spammed by another mortgage lead generator today that's selling leads for about $3 to $7 each, depending on how many you buy.
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Submitted by Jillayne Schlicke on July 29, 2008 - 3:32pm.
Exchanging an item of value for a referral on a federally related loan is a blatant RESPA violation.
I suggest ANY recipient of these leads procure their own written legal opinion.
Further, this brings to mind whether or not this title person's business should be licensed as a mortgage broker by his/her state regulators.
At some point in time, perhaps title insurance companies can get back to selling title insurance. Are your products, rates, and people that bad?
Title companies: Spend your G.D. title insurance payola on developing your people, products and lowering your rates.
Submitted by Dave Wirsching on July 29, 2008 - 4:21pm.
Hey Diane - look who's back. I thought they had stopped doing business....
Submitted by Dave Wirsching on July 29, 2008 - 4:26pm.
Jillayne - payola wouldn't be an industry problem if lenders and RE Agents didn't DEMAND it.
Or just open up an ABA and browbeat and/or trick your clients into using it. Less ethical but more profitable.
Submitted by Diane Cipa on July 30, 2008 - 6:01am.
LOL, Dave. They're still in business. HUD called them in and forced them to charge at least 25 cents for each lead. I still don't like their business model but I'm glad HUD has their eyes on them.
In general I don't like lead generators who sit out there on the web looking a whole lot like mortgage lenders. With all the advertising rules mortgage lenders must follow - especially the new rules coming on, I think lead generators like this should be considered an extension of the lender's marketing and therefore subject to the same rules.
It will be interesting to see how HUD and the Federal Reserve deal with the issue.
Submitted by Dave Wirsching on July 30, 2008 - 6:29am.
I love the tiny, tiny disclaimer in the contact us page.
It might not be illegal, but its sure seems unethical.
Submitted by Diane Cipa on July 31, 2008 - 4:19am.
Oh, and BTW, as Dave reminded me, Matt....expect a letter from an attorney. Truclose has very thin skin.
Submitted by Joe Cline on July 31, 2008 - 6:36am.
Oh.. please post those letters should you get them.. Those are the best. If you ever want to know who not to do business with, you have to check out http://www.chillingeffects.org/.
You'll see the SLAPPs (Strategic Lawsuit Against Public Participation), or lawsuits aimed at squelching speech all over the Chilling Effects Clearinghouse.
Gone are the days of being a legal bully and the word not getting out.
Joe
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