A Helping Hand In Builder Disputes

· Required buyers to deposit extra money in escrow accounts if they refused to use the affiliated lender.

· Pushed buyers into using a designated lender with the threat of withdrawing a $5,000 "seller's credit" toward closing costs and also adding $10,000 onto the home price.

If you find yourself in a builder squeeze involving mortgage, title or other affiliates, HUD has some practical advice for you:

· Compare interest rates, loan terms and closing costs of several independent lenders before agreeing to use the builder's affiliate or wholly owned subsidiary. Determine whether the affiliate's rates and total charges are higher than the going market rate and offset any discounts, incentives and upgrades.

· If you intend to use a builder's affiliated mortgage company to take advantage of incentives and then refinance the loan to get a lower rate, be sure that the mortgage note does not contain a hefty prepayment penalty designed to discourage early refinancing.

· Be suspicious of large discounts or additions that are contingent upon using the builder's loan affiliate. Knowing what comparable homes in the area are selling for may help you determine whether the builder is offering a true discount or is simply raising the price of the home before offering the discount.

If you have a complaint involving high-pressure tactics designed to coerce you into using a builder's affiliate, you can call the RESPA enforcement staff at 202-708-0502. Alternatively, you can e-mail hsg-respa@hud.gov. For background on RESPA, visit http://www.hud.gov/.

Kenneth R. Harney's e-mail address isKenHarney@earthlink.net.