It is Oscar time. The award for Best Performance Sticking a Foot in Mouth goes to HUD Secretary Alphonso Jackson for his portrayal of a bona fide Cabinet Member.

First, individuals will be able to purchase a HUD Home with a $100 downpayment when they utilize an FHA-insured mortgage. Second, homebuyers can obtain a $2,500 sales allowance at closing when they use FHA financing, or a $1,000 sales allowance using other financing types. This incentive can be put towards closing costs, to make home repairs, or to pay down the mortgage. The $1,000 allowance for non-FHA financing must be used to pay closing costs. Finally, real estate brokers can obtain a $500 bonus when borrowers utilize FHA financing and a $250 bonus if borrowers use other financing options. The incentives are available through September 30, 2008.

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or any thing of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.

“The intent of this program was to help stabilize neighborhoods and to prevent blight in the wake of rising foreclosures. But because this program may also leave some with the perception that this is contrary to the spirit of RESPA, we’ve stopped it.

“We have frequently offered incentives to encourage the sale of foreclosed properties. For example, we have offered incentives to encourage the sale of our properties to owner-occupants. In response to the subprime mortgage crisis, we extended this incentive as a way to match desperate homeowners with a safer, more secure loan program. Again, since this may leave some with the impression that this is inappropriate, we have stopped this particular campaign.”