Kickbacks are Un-American! Step Up on Memorial Day!

“I know the owner of our real estate company gets kickbacks from the companies he “suggests” we use in our transactions, but he is a good guy and I look the other way. Besides, it doesn’t affect me – or does it?”

Could this be the reasoning of a real estate agent? Is it okay to be aware of a kickback arrangement, participate in it by using the ‘suggested’ company and keep it to yourself? Just how long is the arm of the law? The hard fact is that participating in a kickback arrangement is a financial crime under US law and no crime is okay to hide.

Title 12, section 2607 of the US Code explicitly prohibits kickbacks and unearned fees. “Incident to or a part of a real estate settlement service involving a federally related mortgage loan.” The law prohibits fees and kickbacks for referrals and the splitting of charges made or received for the rendering of a real estate settlement service (like title, mortgage, NHD disclosures, escrow etc). That doesn’t sound like a minor offense to me!

In fact, a felony charge for kickbacks is a very serious offense. Criminal charges can be brought at both the state and federal levels. When under investigation for kickbacks, a Grand Jury subpoena or a search warrant is served and then comes the time to face the government lawyers.

On this Memorial Day, together we will pledge to eradicate the evils of bribery, corruption, selfishness, immorality, dishonesty and misconduct from the real estate industry. It is not okay to turn our heads, close our eyes or cover our ears when we become aware of a corrupt kickback arrangement. We real estate agents, escrow officers, transaction coordinators, secretaries, and brokers of record must take pride in who we are, and clean up our real estate industry by speaking out.

Character is America’s greatest wealth. A pure, incorruptible citizen is the greatest asset of our great Nation.