The Consumer Financial Protection Board has issued Real Estate Settlement Procedures Act FAQs.
As a borrower, you are entitled to know that some title insurance agents are involved in kickback schemes which are illegal, an marketing programs which are legal (provided the RESPA guidelines are adhered to!)
The FAQs begin with a discussion of RESPA Section 8 General
QUESTION 1:
What are the provisions of RESPA Section 8?
ANSWER (UPDATED 10/7/2020):
RESPA Section 8 prohibits certain actions related to federally related mortgage loans.
RESPA Section 8(a) prohibits kickbacks for business referrals related to or part of settlement
services involving federally related mortgage loans. 12 USC § 2607(a); 12 CFR § 1024.14(b).
RESPA Section 8(b) prohibits unearned fee arrangements, i.e., splitting charges made or
received for settlement services, except for services actually performed, in connection with
federally related mortgage loan transactions. 12 USC § 2607(b); 12 CFR § 1024.14(c).
RESPA Section 8(c) identifies certain payments that are not prohibited by Section 8. 12 USC
§ 2607(c); 12 CFR § 1024.14(g).
Appendix B to Regulation X provides examples to illustrate the application of RESPA to
particular fact patterns, including fact patterns under Section 8(a), 8(b), and 8(c) indicating
whether or not a violation occurred. Appendix B to 12 CFR part 1024.
RESPA Section 8(d) details specific penalties for violations of Section 8, including for Sections
8(a) and 8(b). 12 USC § 2607(d).
Got a question about RESPA, read the full FAQs here.
For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Dr. Title
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
Twitter - @vestedland
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