Is Tomo a scam?
In the United States, RESPA Section 8 and CFPB Regulation X maintain firm prohibitions against kickbacks and unearned fees, with particular statutory exemptions, with regards to settlement services involving most federally related mortgage loans. This includes services provided by all real estate brokers, real estate agents, and Realtors to homebuyers and home sellers.
'No person shall give, and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.' 12 U.S.C. 2607(a). 'Any person or persons who violate the provisions of this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both.' 12 U.S.C. 2607(d)(1).
There is a narrow exemption to this law, for any: 'payments pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and brokers.' 12 U.S.C. 2607(c)(3). Service provided by a 'real estate broker' is codified under RESPA as a 'settlement service' that is 'provided in connection with a prospective or actual settlement.' 24 C.F.R 3500.2. A mere possession of a 'shell' real estate license does not meet this designation. Tomo is not genuine brokerage acting in a brokerage capacity, but it attempts to meet this exemption as a 'shell' real estate entity.
When Tomo acts as an 'agent-matching service' or a 'referral platform' it may, of course, easily sell customer leads and advertising to real estate brokers. However, under RESPA such sales must never be tied to the outcome of the successful transaction or based on a percentage of brokerages' commissions. The US-CFPB Advisory Opinion issued on February 7, 2023, further confirms that any operator of a 'settlement services' digital comparison-shopping platform receives a prohibited referral fee in violation of RESPA Section 8 when the operator receives a 'thing of value' for referral activity.
Because Tomo does not provide 'service provided in connection with a prospective or actual settlement' when making a referral, the referral is not a bona fide 'settlement service,' and it does not act as a bona fide 'real estate broker,' and it does not meet an exemption for 'payments pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and brokers.' The scheme cardinally, collects RESPA-prohibited 'fee, kickback, or thing of value' codified under 12 U.S.C. 2607(a), subject to $10,000 fine and a year in federal prison - for each violation. There is no such thing as a 'partner agent' under law, anywhere in the United Satates, and 'shell' brokerages making referrals covered by RESPA do not meet 12 U.S.C. 2607(c)(3) exemption. Both, consumers and honest real estate professionals, should avoid Tomo because it is an illegal scam, that integrally degrades value of real estate services and inflates real estate commissions with exigent kickbacks.
FAQ for Tomo
What is Tomo Brokerage?
Tomo Brokerage is a paper real estate brokerage works under a false premise of a real estate assistance to buyers who have been searching for a home loan. All real estate agents agree to pay Tomo Brokerage a blanket referral fee, on all closed transactions, through their employing broker. Tomo Brokerage does not offer consumers any real estate representation services. Tomo Brokerage is a consumer brokering scheme that works to receive a cut of agent's commissions with the use of blanket referral agreements.
Is Tomo Brokerage legitimate?
No. Tomo Brokerage is a pay-to-play platform and a price-fixing scheme. Tomo Brokerage matches consumers only with real estate agents who have agreed to pay a kickback of their buyer agent commission (BAC) after the home sale or purchase transaction is complete. Tomo Brokerage does not match consumers with the vast majority of honest competitive agents who have not signed their blanket referral fee agreement. Tomo Mortgage and Tomo Brokerage are an extension of the scheme that attempts to lure consumers with a promise of perks in a form of a discounted interest rate (currently price fixed at 0.125% against the quoted interest rate.) However, consumers end up paying overpriced commissions due to hidden kickbacks and miss out on thousands in competitive buyer rebates available to them outside the scheme on the open market.