SoftBank to Invest $500 Million in Mortgage Startup Better

Another round for a SoftBank darling, Better Mortgage, to operate a real estate broker collusion scheme with Better Real Estate, LLC brokerage as a way to by-pass RESPA (12 U.S.C. 2607) Section 8 prohibition against #kickbacks and unearned fees.

Purchasing through a referred agent and financing through Better Mortgage earns a consumer up to $2,000 in “lender credits.” To be eligible, consumers must choose Better Mortgage Corporation as the mortgage lender and a real estate agent who was referred to the consumer by Better Real Estate, LLC brokerage.

Assuming a “standard” referral fee (25%-35%) paid to Better Real Estate LLC on a buyer’s agent commission for a $1M home amounts to $9,000. This means that Better Real Estate LLC receives somewhere around $10,000 as a kickback from a random real estate broker for the act of steering, while selling this scheme to consumers as $2,000 “discount.”

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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