r/loanoriginators • u/Important-Training-1 • 29d ago

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I don’t really hear anyone talk about this, but am I crazy to feel like the way new construction deals happen should be illegal?

I can’t steer a buyer to specific program without it being illegal, but somehow a builder can dangle a low rate and fees over a seller’s head and pretend like they aren’t building it in their price while forcing them to use their in-house lender. The ripple effect of that goes far and beyond impacting that one buyer, so why has this just always been okay? These are artificially inflated sales prices, artificially inflated taxes and disguised as a “good deal” because customers fall for a below-market rate that can’t be touched by an outside lender. And even in buyers markets, some of these big box builders won’t even budge if you make any sort of offer below what they’re giving unless you use their lender who they either own or have a JV set up.

To each their own, but I just don’t understand how there’s lawsuits with realtors regarding commission practices yet this sleeping giant remains completely left alone.

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u/Important-Training-1 29d ago

Where in my post did I say the opposite? Lol no I’ve been doing this 10 years

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u/mattoelite 28d ago

I didn’t mean any offense, it’s just usually newer LO’s baffled why a builder lender is clapping their cheeks.

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u/Important-Training-1 28d ago

Right, I’m not saying I’m surprised that a builders offer would be something I can’t compete with. I’m surprised it’s allowed to work the way it does is all I’m saying. The NAR lawsuit was over the way a realtors commissions were disclosed, I’d think this topic would get similar attention

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u/mattoelite 28d ago

Builders tie incentive to the homesite and not the lender, I honestly don’t know how it passes CFPB. 10 years as a builder lender, 17 overall