For federally related mortgage loans, an originator promises a real estate agent $75 in restaurant vouchers for each referred buyer whose loan closes. Fourteen referred loans close. Are these vouchers prohibited referral compensation under RESPA Section 8?
Correct Answer
D) Prohibited: the $1,050 in vouchers is a thing of value for referrals
D. The vouchers are value exchanged for referrals. Fourteen payments of $75 total $1,050. The referral arrangement, not a minimum annual total or the use of cash, establishes the problem. Scope and exceptions: This does not determine tax reporting obligations. The stated facts are referral rewards, not payment for actual distinct services. Source: 1024.14(b), (d), (g)(2) — https://www.consumerfinance.gov/rules-policy/regulations/1024/14/
Why This Is the Correct Answer
D. The vouchers are value exchanged for referrals. Fourteen payments of $75 total $1,050. The referral arrangement, not a minimum annual total or the use of cash, establishes the problem. Scope and exceptions: This does not determine tax reporting obligations. The stated facts are referral rewards, not payment for actual distinct services.
Why the Other Options Are Wrong
Option A: Permitted where the total stays under the $600 reporting threshold
A purported tax threshold is not a RESPA exception.
Option B: Prohibited only if the borrower pays more because of the arrangement
An increased borrower charge is not required.
Option C: Permitted, because vouchers are not cash and carry no reportable value
Noncash vouchers have value.
Exam Tip
A gift label does not change a referral payment.
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