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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 111601
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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My question relates to the RESPA law. I am a real estate

Customer Question

My question relates to the RESPA law. I am a real estate broker in California. I also have an in house BRE escrow company (we only can do escrows for my agents). As part of the escrow process, my escrow assistant also does the real estate transaction coordinating (gathering all the paperwork that is part of the transaction) on every escrow that we have. When my agents close a real estate transaction with us, we charge them a transaction coordinator fee. However, if they use our in house escrow company, we do not charge them this fee, because the transaction coordinating was already done by the escrow assistant. Is this RESPA compliant?
Submitted: 8 months ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
You may waive the escrow fee for use of the in house service, that is not mentioned in RESPA at all. While RESPA controls how much can be charged in various cases, including escrow, it does not say a company cannot waive the escrow fees. This is not a kickback or unearned fees, it is you doing the escrow without charge. See also: http://www.federalreserve.gov/boarddocs/supmanual/cch/200601/respa.pdf
Customer: replied 8 months ago.
I am not sure that you answered my question correctly. I was asking if it was OK if i did not charge my agents the transaction coordinator fee, not the escrow fee.
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply and clarification.
So you are still going to be charging the buyer the escrow fee but you are not charging the agents the coordinator fee? If nobody will be charged the fee including the buyer (such as then it is an unearned fee) then it would still be okay under RESPA, but it would be required to be disclosed to the buyer.

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