HOUSE BILL REPORT

EHB 1646

BYRepresentatives Dellwo and Winsley

Regarding disciplinary action against realtors.

House Committe on Financial Institutions & Insurance

Majority Report:  Do pass with amendments.  (12)

      Signed by Representatives Dellwo, Chair; Zellinsky, Vice Chair; Chandler, Ranking Republican Member; Anderson, Baugher, Beck, Crane, Day, Dorn, Inslee, P. King and K. Wilson.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE JANUARY 10, 1990

BACKGROUND:

Real estate brokers, associate brokers, and salespersons are prohibited from directing a customer to a particular lending institution or escrow company in expectation of a kickback or rebate for the referral unless the broker or salesperson discloses the kickback to the customer.

SUMMARY:

Real estate brokers, associate brokers, and salespersons may not direct any transaction to a lending institution, title insurer,  or escrow company in expectation of a referral fee, kickback, or rebate from any party to the transaction or from any lending institution, title insurer, or escrow company.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Larry Shannon, Washington Mortgage Bankers Association; Bart Harrington, Washington Mortgage Bankers Association; and Randall L. Weber, Seattle Mortgage Company.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    Consumers expect the advice that they receive from their real estate broker or salesperson will be in the best interest of the consumer.  When a real estate broker advises a consumer to use a particular lender or escrow agent in anticipation of a referral fee or other kickback, the broker's advice may or may not be in the consumer's best interest; the advice may be in the broker's best interest.  Moreover, the consumer eventually must pay for the fee given to the real estate broker or salesperson through higher transaction costs.  Real estate brokers and salespersons should not be permitted to accept referral fees, kickbacks or other rebates from lenders or escrow companies.

House Committee - Testimony Against:      None.

VOTE ON FINAL PASSAGE:

      Yeas 96; Excused 2.

Excused:    Representatives Appelwick and Ebersole