Colorado Broker Associate David has been offered a commission split by a mortgage lender for every buyer David refers to the lender's services. David is considering accepting this arrangement. Under Colorado law and applicable federal law, which of the following statements is most accurate regarding this arrangement?
Correct Answer
A) David may not accept the referral fee because RESPA prohibits kickbacks and unearned fees in federally related mortgage transactions
The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks and referral fees between settlement service providers in federally related mortgage transactions. A real estate licensee accepting a fee from a mortgage lender for referring clients constitutes a prohibited kickback under RESPA Section 8, regardless of disclosure. Colorado license law also prohibits conduct that violates federal law, and CREC can take disciplinary action against licensees who violate RESPA.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
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