Big Mortgage Bundlers Seek 11th Hour Congressional Attack On Protections Against Kickbacks
WASHINGTON, Aug. 1, 2012 /PRNewswire-USNewswire/ -- Big mortgage bundlers tied to title companies and the real estate lobby is seeking to get Congress to allow home warranty companies to pay now-illegal kickbacks to real estate brokers under last minute Congressional legislation.
Consumer Watchdog condemned the effort to let the legislation proceed without a floor discussion or vote.
"Homeowners in this country need honest advice and fair dealing from their real estate agents, not new ripoffs blessed by Congress. The House should vote on the record and in the light of day on this bill to roll back protections and legalize kickbacks to realtors," said Carmen Balber, Washington, DC director for Consumer Watchdog.
Consumer Watchdog joined Americans for Financial Reform and other consumer groups in a letter opposing the bill that was sent to the Hill this morning.
HR 2446 would allow sellers of home warranties, such as service contracts for appliance repair, to pay kickbacks to real estate agents for steering consumers to their companies, a practice that is currently illegal under the Real Estate Settlement Procedures Act. These referral fees give agents an incentive to recommend the home warranty company that pays the best fee, not the best company, to the consumer who relies on their advice.
"Home buyers are encouraged to trust their real estate agent's judgment. Allowing agents to receive 'referral fees' for steering borrowers to particular products, and/or encouraging them to buy a particular product would create a conflict of interest for the agent," said the consumer groups' letter. "A good product should not need a kickback/gift/incentive to succeed."
The bill is on the suspension calendar on the floor of the U.S. House this afternoon.
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