Mortgage Steering?

[Rwdelling]

We are looking at a REO in NJ. The REO was foreclosed and is now owned by Nation star Mortgage. Nation star is requiring all potential buyers to be pre-approved by Greenlight loans, LLC.*, regardless of having a pre approval letter from another lender (which we do).* Greenlight loans is a division of Nation star Mortgage. Nation star in no way reveals to potential buyers that they own Greenlight. So we have a seller requiring us to get pre approved with their own mortgage company which they own and directly will benefit from.

Is this illegal and considered steering?

New Jersey

 

[FlyingRon]

First off, a preapproval letter means ABSOLUTELY NOTHING. You can show it as a bargaining chip, but no SANE purchaser would make reliance on it because it means NOTHING about whether the buyer can actually obtain the mortgage.

However, requiring even a prequal as a condition is defintiely illegal under federal (RESPA) law.
Info on filing RESPA complaints is here: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/ramh/res/respamor