TNAMB and NAMB Meet With
Tennessee Attorney General’s Office
Regarding Builder Steering
by Jack Sullivan, CRMS, TNAMB Legislative Chair
If you are like most other brokers who do purchase business, you have probably lost a deal because of a builder steering your customer to their own lender by waiving a closing cost or upgrade incentive under their nose. Or maybe the builder refused to even accept a contract unless the buyer used their lender and title company. They might have even insisted that the buyer apply through their lender even though they are already pre-qualified or pre-approved by a broker. Does any of this sound familiar?
On October 18, 2006, during our state convention, TNAMB took advantage of a visit by NAMB Vice President, Marc Savitt to sit down and discuss this issue with the Tennessee Attorney General’s office. Marc has been Committee Chairman for Government Affairs and Consumer Protection for NAMB as well as holding many offices including President of the Virginia Mortgage Brokers Association. He has been involved in legislation in his home state and other states in his capacity with NAMB. Marc has also testified before congress and HUD numerous times.
Accompanying Marc from TNAMB was newly inducted President, Brian Short, CMC, CRMS, Immediate Past President Andy Voyles, CRMS, President Elect Jason Catanella, and Past President and Legislative Chair, Jack Sullivan, CRMS.
We had the opportunity to have a lengthy dialogue with, Gina Barham and Elizabeth Martin, attorneys with the Tennessee Attorney General and Jeff Hill and Cynthia Kinser, attorneys with the Tennessee Division of Consumer Affairs and David Axford, an attorney from the Department of Financial Institutions.
We made them aware of the issues noted above and discussed the practices as they related to RESPA, the anti-steering provisions of the Federal Trade Commission’s Section 5, and Anti-Trust laws. We also discussed the concerns for consumer protection issues including “steering” consumers into a bait and switch, giving something for free but making it up in the loan or other pricing, or even selling the property for a higher price if the consumer does not use their financing.
We all know that nobody gets something for nothing but this is an emotional time for the consumer and they can be easily led to believe that and be taken advantage of. If you know of any actual cases of any of the above incidents, will you please forward them to me at j_sullivan@acerefi.com. We would like to have a description of the incident and your name and contact information to forward to the Attorney General and the Department of Financial Institutions so that we are not just giving anecdotal evidence, but actual evidence of instances that may have harmed consumers. Your assistance may prevent your next customer from being harmed. Take a few minutes and help us help them.
