John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,)

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Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

    I defer to my expert lender, John Meussner for the answer.

    Oh wait, that's you!

Oct 11, 2017 10:48 AM
Rainmaker
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Jennifer Mackay
Keller Williams Success Realty - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

That's a new one on me - interesting though

Oct 11, 2017 10:09 AM
Rainmaker
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Michael Jacobs
Coldwell Banker Residential Brokerage - Pasadena, CA
Los Angeles Pasadena Area Real Estate 818.516.4393

Well, this is interesting.  I have not heard of this that's why it's good to have connections with knowledgeable mortgage professionals.  Like you, of course.  

Oct 11, 2017 09:29 AM
Rainmaker
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Pete Xavier with X Group Real Estate Advocates
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Slick and creative inducement. This industry is always using new gimmicks, and they work in catching the fish.

Oct 11, 2017 09:19 AM
Rainmaker
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Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Interesting concept aka inducement.  Tell us more.

Oct 11, 2017 12:39 PM
Rainmaker
439,776
Mike & Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

INDUCEMENT?

How about when builder give  the buyer closing costs, appliances, window treatments, and other perks ONLY IF...

They use the builders preferred lender or affiliate, and their very own title company.

I am willing to bet that in order to get them to pay $13k for student loans buyer MUST USE BUILDERS LENDER AND TITLE COMPANY.

Steering and violation of RESPA...because the buyer always pays for the title insurance, but the builder always say that they are paying it...not so in most cases.

Sure, they will get by with it because no one complains...

Eve

Oct 11, 2017 12:00 PM
Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

I suppose it's how they define the discount/application of same.
The bigger question in my pea brain is: would 13k even make a dent in some of those fat debts?

Oct 11, 2017 10:32 AM
Rainmaker
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Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

If it's legal, it's legal.

Oct 11, 2017 10:25 AM
Rainmaker
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Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Area Real Estate

I read that article last week & was actually hoping one of you LO's would answer that question. I took it as closing costs that obviously have to be on the HUD but ??  

What's the difference between an inducement TV or student loan? I'm sure the lender will pay that debt directly.

Oct 11, 2017 01:00 PM
Rainmaker
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Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

Interesting....

Oct 11, 2017 11:57 AM
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams fox cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Just a new way to phrase a discount, helps those in that situation to visualize the discount.

Oct 11, 2017 11:09 AM
Rainmaker
565,222
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Money has come from many sources in the past to get the ratios within lender parameters. For years 'Rent to own' and 'Lease option' were such tools until many states outlawed that practice.

Prepaids, buy downs, dowmpament assistance or any mechanism to make a debt disappear.

Solutions are great inducements. And we are all in the solutions business.

It seems to me a repackaging of what every lender can do and adaptation to emerging problems.

Oct 11, 2017 09:39 AM
Rainmaker
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Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

I would think it would be a great inducement for many first time home buyers.

Oct 11, 2017 09:10 AM
Rainmaker
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Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

I don't think it matters if the money goes toward student loans or appliances. If the builder is "paying" and then requiring them to use a particular lender, then I disagree with the practice because there is a good chance the builder is getting something in return from that lender.

Oct 12, 2017 05:48 AM
Rainmaker
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Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Mary Yonkers nailed this one!

Oct 12, 2017 05:32 AM
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

To me it is an inducement. I had a buyer ask the other day for the builder to buy out their lease to the tune of $3400 plus pay almost $10000 in closing costs and provide a new refrigerator and $3000 in fencing. Some buyers are just plain crazy and this builder did not bite.

Oct 11, 2017 05:21 PM
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Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I TOTALLY agree with you, John Meussner - it is inducement any way you look at it!

Oct 11, 2017 04:39 PM
Rainmaker
664,153
Thomas J. Nelson, Realtor,CRS,e-Pro
Big Block Realty 858.232.8722 - La Jolla, CA
Co-Host of Mail-Right's: Real Estate Agent Podcast

ASK RESPA

Oct 11, 2017 03:26 PM
Rainmaker
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

If it's a VA Loan ???

Oct 11, 2017 02:33 PM
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I know builders have given away cars as long it stays within certain guidelines on the maximum amount. I like the idea and wish it it legal.

Oct 11, 2017 01:59 PM
Rainer
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Caroline Gerardo
Eagle Home Mortgage, LENNAR HOMES Home Loans - Newport Beach, CA
C. G. Barbeau the Loan Lady

I work for Eagle, it's the builder side, not Eagle BUT builders gave incentives for 30 years in this business- a free pool, landscaping, upgrades, 3 - 2 -1 buy down, better pricing, $10000 to go with our in-house...  its legal. Buyer can go with Wells or Chase. Limit on amount, limit on FEDERAL student loans as money goes directly to them not buyer, limit on time frame, limits and ins and outs are pages long

Eagle is a fantastic company and we have products for everyone. This is a needed one as college graduates are stuck with a boulder saddle of debt on their back and they can't qualify for QM loans. John Meussner   :) 

Oct 11, 2017 01:59 PM
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Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

I read about that this morning, and it raised MY eyebrows. For some debts $13K is almost chump change

Oct 11, 2017 01:31 PM
Rainmaker
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Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

why do they need to do that in  a sellers' market?? we're selling new homes before the board is hung inside....  one is going together and the foundation is not in yet!!!!  no inducements necessary...

Oct 11, 2017 12:49 PM
Rainmaker
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Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

An interesting promotion.

Oct 11, 2017 12:00 PM
Rainmaker
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Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Waxhaw/Fort Mill Area Realtor

I don't know... you tell me, John. I saw that announcement myself earlier today.

Oct 11, 2017 11:46 AM
Rainmaker
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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

That is an attractive scenario. Their lawyers are very creative to pull this through. 

Oct 11, 2017 11:56 PM
Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Interesting.   Is this really any different than paying closing costs for the buyer?

Oct 11, 2017 05:48 PM
Rainmaker
2,156,557
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

It is sort of like a buy-down, price reduction and discount in principal. It also has marketing kick to it and it addresses the student trillion dollar debt loan program problem quite nicely and at the same time promotes home ownership. Win-win-win...brilliant. Everyone from employers to supermarkets should be offering these incentives to help the students

Oct 11, 2017 10:50 AM
Rainmaker
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Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

It definitely sounds like it is leaning towards the gray area!  

Oct 14, 2017 06:28 AM
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Stephen Turner
Coldwell Banker Residential Brokerage - York, PA
The BIG Guy of NEW HOME SALES

With 20 years working for builders, I've seen things like this. I'd need to see more details but in the past stuff like this was done "off the HUD" if you know what I mean. Today that is harder and is usually just a great way of using the 3% sellers help the builder is allowed to give on most financing products. By paying that towards the student loan, it's great because that is debt that the lender will no longer need to include in their ratios. Everyone wins. The buyer gets rid of student loans, the lender gets the buyer to qualify for more, and the builder gets to sell more. I'm also sure this is probably only possible with the builder's prefered lender, as there may be some behind the scenes mechanics needed to make this work, and some may be a contribution from the lender, such as buyers credit instead of a fee paid to the builder under some sort of "Marketing Agreement" that may exist!

Bottom line, I but that "we'll pay your student loans" get prospects into the models and 95% who buy probably switch and say, use that money for cash I need to move in, instead of actually paying the loans for them.

Oct 12, 2017 12:47 PM
Rainmaker
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Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Because their lobby is stronger than our lobby and they paid off someone's vacation to get the votes for this to happen.

Oct 12, 2017 08:17 AM
Rainmaker
796,581
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

I believe you answered your own question John. Gimmicky, yes, illegal, no.

Oct 12, 2017 07:30 AM
Rainmaker
3,787,692
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good question.  I'll leave this to the experts.

Oct 12, 2017 06:31 AM
Rainmaker
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Sandy Padula and Norm Padula, JD, GRI NMLS#1483386
Realty One Group - Carlsbad, CA
Presence, Persistence & Perseverance

L has always tried pulling these ploys. Just like there 7-7-7 deal. $7 down, to buy a home; what a scam!

Oct 12, 2017 06:30 AM
Rainmaker
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I have no idea.

Oct 12, 2017 06:10 AM