A title company pays a loan officer $75 for each closing referred, and both sides agree the payment is small.
Correct Answer
C) Prohibited: a fee for referral of settlement business is a kickback
Section 8(a) prohibits giving or accepting any fee, kickback or thing of value pursuant to an agreement that business incident to a real estate settlement service be referred; the amount does not matter. Other choices: disclosing a kickback on the Closing Disclosure does not convert it into a permitted payment; RESPA sets no de minimis threshold for referrals, so $75 is as prohibited as $7,500; and harm to the borrower is not an element, the payment for the referral being the violation. Source: RESPA Section 8(a), 12 USC 2607(a)
Why This Is the Correct Answer
Section 8(a) prohibits giving or accepting any fee, kickback or thing of value pursuant to an agreement that business incident to a real estate settlement service be referred; the amount does not matter. Other choices: disclosing a kickback on the Closing Disclosure does not convert it into a permitted payment; RESPA sets no de minimis threshold for referrals, so $75 is as prohibited as $7,500; and harm to the borrower is not an element, the payment for the referral being the violation. Source: RESPA Section 8(a), 12 USC 2607(a)
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