Real Estate Brokerage in Mortgage Ethics Flap

A founder of the largest residential real estate brokerage in the Washington, DC area is under scrutiny over what some say was an unethical directive given to his brokers.

The Washington Post reported that the founder of Long & Foster, P. Wesley Foster, sent an email urging the company's thousands of agents to recommend its in-house mortgage lender and discontinue referring clients to outside banks.

Foster's encouragement of the use of Prosperity Mortgage (an affiliated company) over firms like Bank of America and SunTrust brought criticism from consumer activists, real estate agents and naturally, the other banks.  They fear that such a move would limit choice and come at the expense of Long & Foster's clients.

A copy of the email memo was sent to the Department of Housing and Urban Development, whose officials have not commented on it at this time.