A mortgage lender pays a real estate agent $100 for each borrower the agent refers who ultimately closes a loan. The lender argues this is permissible because real estate agents can legally receive referral fees. Under RESPA Section 8:
Correct Answer
C) This violates RESPA's prohibition on referral fees for settlement services
Under RESPA Section 8, this arrangement violates the prohibition on giving or receiving things of value for referrals of settlement service business. Real estate agents are not exempt from RESPA when receiving payments for referring mortgage business.
Why This Is the Correct Answer
Under RESPA Section 8, this arrangement violates the prohibition on giving or receiving things of value for referrals of settlement service business. Real estate agents are not exempt from RESPA when receiving payments for referring mortgage business.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
The right of rescission under TILA applies to a refinance of which type of property?
Next Question
A borrower refinances their home with a new loan of $200,000. The existing mortgage balance being paid off is $175,000, and the borrower receives $20,000 in cash. Total points and fees are $1,200. What is the HOEPA points and fees percentage?