Desk Fees, a Joint Venture, and a Down Payment 'Gift'
An originator at a mid-sized lender has a brokerage that sends roughly 40% of their volume. The owner proposes three arrangements: the lender pays $3,000 per month for a 100-square-foot desk and 'preferred lender' placement in every listing presentation; the originator and the brokerage form a 50/50 joint venture that will be the only lender recommended to the brokerage's buyers; and the originator personally covers a buyer's $2,500 down payment as a 'gift' so the deal closes before quarter end. The brokerage also sends an invoice for desk fees for a month when the originator never used the space, asking for a signature to 'keep the paperwork clean.' The originator is a W-2 employee, is licensed in Maryland, and is three loans short of a production bonus.
1. Analyze each arrangement under RESPA Section 8 and the affiliated business arrangement rules.
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Analyze each arrangement on its own facts.
Desk fee. A payment for goods or services actually furnished, at fair market value, is permissible under RESPA §8(c)(2) if it is not a disguised referral fee. $3,000 per month for 100 square feet is likely above market; the written agreement, the space actually available and used, and the invoice must match reality. Paying for 'preferred lender' placement should be tied to advertising actually delivered, not to loan volume.
Joint venture. Any direct or beneficial ownership interest of more than 1% makes this an affiliated business arrangement. It requires a written disclosure of the affiliation at or before referral, a statement that the borrower is not required to use the affiliate, and an estimate of charges. A 50/50 shell that exists only to split fees, with the brokerage steering every buyer to it, is a sham and a §8 violation.
$2,500 'gift.' Money from the originator to a buyer is an inducement for referral, and calling it a gift misstates the source on the application - fraud, not marketing.
2. What should the originator do, and what are the consequences of going along?
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Refuse the invoice and the gift, and escalate in writing to compliance and the supervisor before responding to the brokerage. Document the requests exactly as made, keep the emails, and do not sign anything certifying services that were not provided. A false invoice is a false record, and the signature creates personal exposure regardless of who asked for it.
On the joint venture, request the operating agreement, capitalization, staff, and the disclosure form. If the venture has no independent ability to originate or fund loans and its only asset is the referral stream, decline to participate.
On the gift, tell the borrower the funds cannot come from a party to the transaction and let the borrower identify an eligible source.
Consequences of getting this wrong include RESPA treble damages and civil penalties, state license discipline, loss of the production bonus and employment, and potential criminal fraud exposure. Being three loans short of a bonus is not a defense, and 'everyone does it' does not make the desk fee bona fide.