Referral Partners

Referral Fees

Are referral fees legal?  The Federal government, in passing major revisions to RESPA, has made the payment of referral fees and finder’s fees on residential deals of one-to-four families illegal.  However, they deliberately and conspicuously did not prohibit the payment of referral fees on commercial deals.
1st Commercial Lending pays referral fees on deals other than one-to-four family dwellings.  Additionally, we will inform the client that we are paying a referral to the referring broker out of the commission paid to us from the lender.  This will prevent someone from ever claiming that you paid a secret kickback.
Why would 1st Commercial Lending pay a referral fee in the first place?  We consider it a marketing cost.  We also believe that those marketing dollars are better utilized in the hands of our clients than to a newspaper, periodical or direct mail vendor.
Our referral fee is 20% of the commission paid to 1st Commercial Lending, LLC.  So for example, on a million dollar loan a one-point fee will be $10,000.  Your referral fee is 20% of $10,000 or $2,000.
Should you desire to substitute a referral fee and instead have 1st Commercial Lending reimburse your client by either paying some closing costs (up to the 20% referral fee) or cash back, we are willing to entertain that arrangement.  Additionally, if you want to get really creative, 1st Commercial Lending will entertain a substitution of the referral fee and provide a sponsorship to an organization of your choice, provide a contribution to a charity of your choice or contribute to a co-marketing campaign.