I have never been a big fan of AfBAs. I was asked to enter into one with a local realty company and I declined. George brings up a good point, how impartial can you be when another company with a vested interest in the transaction owns half of your company. How long before they ask you to insure over something you shouldn't? Or, "modify" the HUD to show a down payment from the buyer that is really being paid by the seller?
I have been asked to do a lot of crazy things - there is no limit to what other parties to the transactions expect. I have been asked to close with a back-dated land contract so a purchase can go through as a refinance; I have been asked to close without proper payoffs using estimates supplied by the mortgage broker; and other unethical (illegal) transactions.
I don't want to be put in a position where my "volume" potentially depends on doing things I shouldn't.
RESPA has failed us all miserably. They have limited legitimate title agencies from spending more than $50 per calendar year on clients to show appreciation. Yet, they will allow anyone to set up an AfBA to give away 50% of our profits for exactly the same effect.
At a conference with one of the major underwriters, the President of the company said that they don't like them either, but we have to do what we must to ensure volume of business. Of course the underwriter would say that - their premium split remains the same regardless of who we split the remainder with.
Just some of my thoughts...
Best,
Robert A. Franco
SOURCE OF TITLE
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