RESPA can be a tricky statute to understand. If you haven’t read the statute in a while, now may be a good time to take a look and refresh your memory. You may know that kickbacks are prohibited, but what exactly does that mean? An in-depth look at Section 8(a) could help you avoid violations in the future.
Section 2607(a) of RESPA, also known as RESPA Section 8(a), prohibits kickbacks in exchange for referrals.
Specifically, the section states: “No person shall give and no person shall accept any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.”
Congress believed that a referral fee paid from a settlement service provider would ultimately come out of the consumer’s pocket. So, the idea was that prohibiting kickbacks would save consumers money.
TO READ THE FULL STORY
Cover Story: