A settlement company charges different fees to borrowers depending on which MLO referred them. The MLO receives a portion of the higher fees charged to their referrals. This arrangement violates which regulation?
Correct Answer
B) RESPA's prohibition on fee splitting for referrals
Under RESPA Section 8, this arrangement constitutes prohibited fee splitting where the MLO receives compensation for referrals. The variable pricing structure based on referral source combined with MLO compensation violates RESPA's anti-kickback provisions.
Why This Is the Correct Answer
Under RESPA Section 8, this arrangement constitutes prohibited fee splitting where the MLO receives compensation for referrals. The variable pricing structure based on referral source combined with MLO compensation violates RESPA's anti-kickback provisions.
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