RESPA Violation Checker
Review common real estate settlement scenarios and identify RESPA violations. Each scenario includes the specific RESPA section reference and detailed explanation.
Check Settlement Scenarios
Select scenarios to reveal whether they violate RESPA.
A real estate agent receives a $500 fee from a title company for each buyer referral.
A mortgage broker charges a loan processing fee but another company actually performs the processing work.
A real estate brokerage refers clients to its affiliated title company without disclosing the ownership relationship.
A lender requires an escrow cushion of 4 months of property tax and insurance payments.
A lender pays a real estate company for "marketing services" but the payment amount increases based on the number of loans referred.
A home seller requires the buyer to use a specific title insurance company as a condition of the sale.
A title company pays a real estate agent a fair market rent for shared office space.
A mortgage company pays its employee loan officers a bonus for each closed loan.
Two different settlement service providers each charge the full fee for the same service on a single loan.
A listing agent shares their commission with a cooperating buyer's agent through MLS.
A home inspector gives a real estate agent gift cards worth $100 each month in exchange for continued referrals.
A real estate brokerage refers clients to its affiliated mortgage company, provides written AfBA disclosure, does not require use, and receives only ownership dividends.
Key RESPA Sections for the MLO Exam
Understanding these sections is critical for both exam preparation and compliance in practice.
Disclosures
Requires lenders to provide borrowers with a Good Faith Estimate (now Loan Estimate under TRID) and a HUD-1 Settlement Statement (now Closing Disclosure). Servicers must provide a Servicing Disclosure Statement.
Servicing & Escrow
Requires servicers to respond to borrower inquiries within specific timeframes (Qualified Written Requests). Limits escrow account cushions and requires annual escrow analysis statements.
Kickbacks & Referral Fees
Prohibits giving or receiving any thing of value for referrals of settlement service business. Penalties include up to $10,000 fine and 1 year imprisonment per violation.
Unearned Fees
Prohibits fee-splitting or charging fees for services not actually performed. Each provider may only charge for services they actually render to the consumer.
Permitted Payments
Provides safe harbors for employer-employee payments (c)(1), fair-value goods/services (c)(2), cooperative brokerage (c)(3), and properly structured Affiliated Business Arrangements (c)(4).
Seller Title Insurance
Prohibits sellers from requiring buyers to purchase title insurance from a specific company. Violation can result in the seller being liable for up to 3x the title insurance charges.
Understanding RESPA Compliance
The Real Estate Settlement Procedures Act (RESPA) was enacted in 1974 to protect consumers during the home buying and mortgage process. It ensures that buyers and borrowers receive timely disclosures about the nature and costs of the settlement process and are protected from abusive practices such as kickbacks and referral fees that unnecessarily increase settlement costs.
Why RESPA Matters for MLOs
RESPA compliance is a core competency tested on the SAFE MLO exam. Federal Laws and Regulations account for 23% of exam questions, with RESPA being one of the most heavily tested topics. As a practicing MLO, understanding RESPA is essential to avoid costly violations that can result in fines, imprisonment, and loss of your license. The CFPB actively enforces RESPA violations and has levied millions in penalties against violators.
TRID Integration
In 2015, the TILA-RESPA Integrated Disclosure (TRID) rule combined the mortgage disclosure requirements of TILA and RESPA into two unified forms: the Loan Estimate (replacing the GFE and initial TIL) and the Closing Disclosure (replacing the HUD-1 and final TIL). TRID rules require the Loan Estimate within 3 business days of application and the Closing Disclosure at least 3 business days before closing.
RESPA Penalties at a Glance
RESPA violations carry serious criminal and civil penalties. Understanding these consequences reinforces why compliance is non-negotiable for mortgage professionals.
$10K
Max fine per violation
1 Year
Max imprisonment
3x
Treble damages (civil)
Frequently Asked Questions
What is RESPA and who does it apply to?
What are the most common RESPA violations?
What are the penalties for RESPA violations?
Are marketing service agreements (MSAs) legal under RESPA?
What is an Affiliated Business Arrangement (AfBA) under RESPA?
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