Refering buyers to a mortgage specialist — OK. Taking a kickback for it — NOT OK.

Posted by Annalisa Burgos | April 30, 2009

Whenever I go to an open house, the listing agent often offers me the business card of a mortgage broker or loan officer, in case I’m looking for financing. Since I usually secure financing before I go house hunting, I never really think about the recommendation. Figured the guy was a friend, so the agent was doing him a favor by throwing him a bone.

But what if that agent or broker took a kickback for it. A big NO-NO.

Apparently, that’s what the nominee for the head of the Federal Housing Administration is accused of.

David Stevens, president and chief operating officer of Long & Foster, was supposed to be confirmed on Capitol Hill this week, but lawmakers put the vote on hold to review lawsuits alleging his company broke federal anti-kickback laws.

Long & Foster is facing several class action lawsuits, alleging that it shared profits with affiliated mortgage and title companies in exchange for bringing buyers their way. While these relationships are commonplace in the real estate industry, profiting from them is illegal.

If confirmed, mortgage industry vet Stevens will run the FHA, which offers those highly-coveted loans that require as little as a 3.5 percent down payment.

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