Notice
Due to the lapse in Congressional Appropriations for Fiscal Year 2019, the U.S. Department of Housing and Urban Development (HUD) is closed. This website is supported by a cooperative agreement funded under a prior appropriation. Current functions will remain operational but no new functions will be added during the lapse in appropriations. For more information, see HUD Contingency Plan for Possible Lapse in Appropriations.
Housing Counseling FAQ
Q

Can a counseling agency take part in a promotional agreement with a particular lender, through which the lender will participate in outreach and education efforts with the intention of producing loans?

Date Published: July 2008

Print ShareThis

A

While permitted, an agreement such as this must be carefully orchestrated. Clients must be given a disclosure form informing them of the agreement and stating that they are under no obligation to use that specific lender’s products. Clients must be offered at least three alternative products and counselors may not receive referral fees for sending clients to the lender. The agency as a whole may receive compensation, but individual members of the agency may not. The compensation to the agency may not be tied to generating a specific number of loans. In addition, if the lender’s representatives participate in any portion of homebuyer education sessions, they must sign a written agreement stating that they will educate clients about homeownership, not market their own product.


Tags: Housing Counseling Program Conflict of Interest

FAQ ID:

2418