What legal way is there to get paid in relationship to the ammount of
money the broker or lender makes on the funded loan for providing the
lead to the lender or mortgage broker? What laws limit our creativity
in revenue sharing in this arena?
i.e. We bring you 100 people that are interested in new mortgages,
and you close 20 of them. We want paid as a function how much money
you made, so its fair to both of us, say 33%.
I hear that there are regulations as far as this practice is
concerned, but I also know that lending tree charges something like
$400 a pop on a funded loan off of a lead they gave you, so perhaps
flat rate is the answer... |
Request for Question Clarification by
jbf777-ga
on
19 Jul 2003 17:45 PDT
Hello -
This kind of thing varies by state. What state are you in, if I may ask?
Thanks,
jbf777-ga
GA Researcher
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Clarification of Question by
internetmarketingman-ga
on
19 Jul 2003 19:11 PDT
We are located in Florida, but the leads we are generating (can be up
to 7000 a day) are 50 state nationwide. We are also interested in
using these same leads to refer to real estate agents, and other
related services that the end user will need. (i.e. If you are
looking for a new mortgage, you may also be looking for a good real
estate agent in your area.) I feel it is our job to provide the end
user with the best services possible.
Thus the arangement will have to work in all 50 states, unless there
are a couple states that are very far from the norm, in which case we
can make special rules for just those states.
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Request for Question Clarification by
jbf777-ga
on
23 Jul 2003 16:58 PDT
Just an update: I've identified the primary legislation impacting this
and am working to narrow down the specifics. Thanks for your
patience.
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Request for Question Clarification by
jbf777-ga
on
24 Jul 2003 22:25 PDT
I have identified federal legislation with its associated sections
that apply to this situation. I've also talked with a representative
from the respective federal agency that deals with the legislation.
I've also identified some articles on the topic. It looks like there
might be roadblocks at the federal level to getting paid as a
percentage of what is made.
Would the federal information be enough for an answer?
Please let me know how you'd like to proceed.
Thanks,
jbf777-ga
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Clarification of Question by
internetmarketingman-ga
on
25 Jul 2003 00:27 PDT
Federal legislation is good, but I can't solve the problem with just
it. if states each have their own laws, then each one would be just
as important. Chances are that only a few states do. But I am not
sure.
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Request for Question Clarification by
jbf777-ga
on
25 Jul 2003 07:33 PDT
Hello -
Can you tell me how this would be the case? This morning I've
confirmed with 2 states that receiving a referral fee as a percentage
of the closed loan is clearly a violation of federal law. All states
must abide by the federal legislation. In effect, the states' laws at
that point have no bearing on it, because there's already a blanket,
nationwide mandate on the topic.
jbf
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Request for Question Clarification by
jbf777-ga
on
25 Jul 2003 07:46 PDT
In addition to Delaware and Connecticut, just confirmed with a 3rd
state [Louisiana] who deferred me to the federal law. By law, they're
all going to do that. If I provide you with the federal legislation
and 3-5 state contacts for verification, would that suffice?
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Request for Question Clarification by
jbf777-ga
on
25 Jul 2003 09:08 PDT
Additionally, however, there are ways to get paid legally for such
referral services, just not as a percentage of the loan.
|
Clarification of Question by
internetmarketingman-ga
on
25 Jul 2003 11:08 PDT
If there is a legal way to get paid that is not a percentage of the
loan, that would suffice. Can I make it a sliding scale? The legal
way to make the most money off these referrals is the ticket. If a
flat rate, or sliding scale flat rate is the ticket, then we are good
to go.
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Request for Question Clarification by
jbf777-ga
on
25 Jul 2003 13:30 PDT
How does your system work, if I may ask? Are you selling bulk leads?
Do your clients fill out applications [over the web]? How much
information do you take from the consumers?
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Request for Question Clarification by
taxmama-ga
on
25 Jul 2003 15:36 PDT
Dear InternetMarketingMan
I know that you and JBF777-ga have put a lot of time into this
together, but I think I have a solution to your dilemma.
It may require a little more work on your site, but I think, if
you think my idea through, you'll find a way to make this work.
(Someone else already is.)
Interested?
Your TaxMama-ga
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Clarification of Question by
internetmarketingman-ga
on
27 Jul 2003 12:18 PDT
I know of several companies that have this as a business model
(lendingtree.com being one.) The website is near completion
(leadfeeds.com). It just how we are to charge for the leads that is
the question at hand. (We have a bidding system already, so the only
other way thats powerful is the way where we get paid big on funded
loans) And that is what this question is about. So yes, I am
interested in your answer, if you have one that addresses the fees
legality specifically.
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Request for Question Clarification by
taxmama-ga
on
27 Jul 2003 13:27 PDT
Dear InternetMarketingMan,
Since you are offering to pay $200 for this information,
I'd prefer to answer you here, in clarifications. If this
works for you, please let me know that you'll accept this
as an answer - OR please open up a lower-priced question
to pay me for this. All right?
The folks at ImageOne have started recruiting tax professionals
to provide them with leads for loans. Since these people are
not licensed real estate professionals, legally, they should not
be able to pay them commissions, right?
Well, they got around that by paying them for value-added services.
Read their agreement, posted here:
http://www.800imageone.com/loanworks/index.htm
They ostensibly pay the tax pros for helping the clients fill out
the applications, not for the lead. Perhaps you could provide such
a service on your site - write code to gather the information and
proof-read the application to alert them if they are missing data
or have it entered incorrectly?
They even make them pay $100 for the rght to become a loan agent
to that bank.
So, perhaps if you have a loan agent agreement with each bank to
whom you send referrals?
Regardless, the links to the forms and information they are using
are above. I only give them to you, since they have made them
publicly available. You can be sure their legal department made
certain these documents will hold water. The folks that own that
company are quite good at dotting i's and crossing t's.
Best wishes
Your TaxMama-ga
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Request for Question Clarification by
taxmama-ga
on
09 Aug 2003 11:34 PDT
Dear Internetmarketingman,
Just following up. Haven't heard back from you about whether
you accept the answer.
I went to considerable lengths to track down a business
with a site that not only operated on a commission payment
model, that not only explained how it worked, but also provided
the agreements visible and accessible right on the site, so
you could use those as a model. (Search was through my own
contacts and sources, from my financial experience. I try to
stay on top what my peers and clients need.)
Although this seems to solve your problem, since I am not positive,
I was ethical enough not to simply post it as the reply and to
collect the $200 fee until you'd reviewed this business model.
I'd really appreciate it if you would respond and let me know
if you accept this as a full answer - or would prefer to re-post
it for a lower payment.
Thanks so much.
Wishing you great success in your business.
Your TaxMama-ga
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