Dear Shak & Jill,
Do real estate agents work with mortgage brokers? Should I trust their referral, or do they get
paid to give my name to someone who may not be my best match?

Typically real estate agents do not get paid fees from
mortgage brokers that they refer their clients to, at least not legally that
is. The Real Estate Settlement Procedures Act (RESPA)  strictly prohibits the
practice of kickbacks and referral fees. However there is a movement afoot to train
real estate agents in loan originations which could allow for legal
compensation to the agent. The Certified
Loan Counselor designation (CLC) is an "innovative program designed to
provide real estate agents with the skills and education necessary to provide
their consumers a one-stop shopping experience that includes finding their home
and financing their purchase."

The main reason a Realtor may refer his or her clients to
a particular lender and even a particular title company is simply because the Realtor is
confident in their abilities to get the job done. As an experienced Realtor I
know I have encounter far too many times lenders that don’t live up to their
promises. Loans have been turned down in underwriting on closing day, weeks
after the loan commitment deadlines have passed. This leaves not only the buyer
in a bind and open for a lawsuit but also devastates the seller, affects both
agents, both brokers and down the line to all of the other parties involved in
a multi-tiered transaction.

Working with a lender who has a track record of
performing within the time constraints of the Sales Contract will alleviate
last minute surprises and detrimental outcomes.  Chances are your Realtor won’t steer you wrong. They are highly motivated, after all,  no closing, no paycheck.

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