The Real Estate Settlement Procedures Act — a federal law that governs mortgage disclosures, prohibits kickbacks, and protects consumers in real estate settlements.
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RESPA (Real Estate Settlement Procedures Act) is a federal consumer protection law administered by the CFPB. It requires lenders to provide standardized disclosures (Loan Estimate, Closing Disclosure) so consumers can compare costs and understand what they're paying. RESPA's Section 8 prohibits kickbacks and referral fees in real estate settlement services — it's illegal for a mortgage professional, real estate agent, title company, or any service provider to pay or receive anything of value in exchange for referrals. Section 8(c) permits payment for actual services rendered under a written marketing services agreement. RESPA violations can result in criminal fines, civil liability, and loss of license.
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