Rachel is a licensed broker at Summit Realty and refers a buyer client to a mortgage lender. The lender offers to pay Rachel a $500 referral fee for the introduction. Under Washington license law and applicable federal law, which of the following is the most accurate statement about this arrangement?
Correct Answer
D) Rachel may not accept the referral fee because RESPA prohibits kickbacks for referrals in federally related mortgage transactions
Under the Real Estate Settlement Procedures Act (RESPA), Section 8, it is illegal to give or receive any fee, kickback, or thing of value for the referral of business in connection with a federally related mortgage loan. Washington license law also prohibits undisclosed compensation and conduct that violates federal law. A $500 referral fee from a lender to a broker for sending a buyer client is a classic RESPA Section 8 violation, regardless of whether the client knows about it.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
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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