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Financing Practice Question

Under RESPA, kickbacks or referral fees between settlement service providers are:
A
Legal if disclosed to the borrower
B
Legal up to 1% of the loan amount
C
Prohibited
D
Legal if split equally between parties
Explanation

Section 8 of RESPA strictly prohibits kickbacks and referral fees between settlement service providers. Violations can result in fines up to $10,000 and/or up to one year imprisonment. The prohibition applies regardless of disclosure.

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