An audit analyst finds a settlement-service referral involving a possible thing-of-value exchange. Which RESPA response is required?
Correct Answer
C) Pay only for actual services performed
Why this is correct: The Real Estate Settlement Procedures Act (RESPA) RESPA's anti-kickback rule strictly prohibits kickbacks, fee-splitting, and unearned fees for referrals of settlement service business. A payment is only permitted if it is for "goods or facilities actually furnished or for services actually performed." Therefore, the required RESPA response to a possible thing-of-value exchange is to ensure you "Pay only for actual services performed." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because RESPA's anti-kickback rule is a strict prohibition with no internal exception. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because the prohibition is active at the time of the referral; waiting creates a violation. "Use the privacy notice standard to decide the RESPA Kickbacks and Referrals issue before confirming the trigger facts" is wrong because privacy notices (GLBA) are a separate legal area unrelated to analyzing referral fees. Exam tip: For any RESPA RESPA's anti-kickback rule question, apply the three-part test: 1) Is there a thing of value? 2) Is it given or received? 3) Is it for a referral of business? If yes to all, it's a violation unless it fits a specific exemption like payment for services actually rendered.
Why This Is the Correct Answer
The correct response is "Pay only for actual services performed" because RESPA prohibits kickbacks and regulates escrow, servicing, and settlement-service practices.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Use the privacy notice standard to decide the RESPA Kickbacks and Referrals issue before confirming the trigger facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
RESPA and Regulation X: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to RESPA and Regulation X; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
More Federal Laws Questions
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?
Before the team acts on a branch training session, a policy analyst must address RESPA Servicing Transfer Notice. Which response is most defensible?
A training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?
An operations lead is resolving ECOA Prohibited Discrimination Bases during a loan-team coaching session. Which action best fits the rule?
In a file escalation meeting, a disclosure specialist sees facts tied to TILA Closing Disclosure. What should the file reflect?
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