law

RESPA

RESPA, the Real Estate Settlement Procedures Act, is a federal consumer protection law that applies to most federally related residential mortgage loans on one- to four-family properties. It requires timely disclosure of settlement costs, limits the amount lenders may hold in escrow accounts, and prohibits kickbacks and unearned referral fees among settlement service providers. Affiliated business arrangements are allowed only with disclosure and without required use.

Exam tip: Key RESPA facts: no kickbacks or referral fees for settlement services, and it covers one- to four-family residential loans. It does not set interest rates or cover all-cash sales.
Example: A title company offering an agent $200 for each buyer referred would be paying an illegal kickback under RESPA.

1. A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

Answer & explanation

Answer: D. RESPA prohibits kickbacks and unearned referral fees between settlement service providers and real estate licensees, even if disclosed.

Related terms & state variants

affiliated business arrangement Closing Disclosure escrow impound account kickback TRID

Sources

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Last verified: 2026-10-23