Charlene,

I have already been interviewed on this subject.  I agree with your position as long as no state law or rule specifically prohibits such action.  For one thing, the discount or incentive is going directly to a consumer as opposed to someone who is in a position to refer settlement business (other than their personal business).  To the extent that the veteran is prohibited from paying  the fee himself or herself by VA regulations, the seller pays those fees and includes them when determining whether or not to accept the buyers offer.  In other words, the price paid by the veteran when purchasing a home includes the estimated settlement fees that will be paid by the seller at closing.  If those fees are reduced, the seller can and likely will take the reduction (if they are even aware of it) into consideration when determining the ultimate sales price they are willing to accept.  Thus, the veteran benefits from the reduction even though he or she does not pay the fee at closing.

Good luck with your interview!

Bob Philo