Apply RESPA Anti-Kickback Rules - Nationwide Multistate Licensing System NMLS

1. What is the maximum criminal penalty under RESPA Section 8 for each violation?

   Up to $10,000 fine and up to 1 year imprisonment. RESPA imposes severe criminal penalties per violation to deter kickbacks and ensure integrity in real estate settlements.

2. Identify whether this is RESPA-compliant: an AfBA referral with disclosure and no required use.

   Compliant if only ownership returns are received and no required use exists. AfBAs comply with RESPA when limited to ownership returns, voluntary use, and proper disclosure to protect consumers.

3. What is the RESPA rule on a lender requiring the borrower to use a specific title company?

   Generally prohibited; it is a required use of a particular provider. Required use violates RESPA by limiting consumer choice and potentially constituting a disguised referral fee under Section 8.

4. What is the RESPA test for whether an MSA payment is permissible?

   Compensation must be for bona fide services at fair market value, not referrals. Marketing services agreements are lawful under RESPA if payments are reasonable for actual services, not disguised referral fees.

5. Identify whether this is RESPA-compliant: a lender pays FMV for printing flyers with no referral tie.

   Compliant if payment reflects fair market value for bona fide services. Payments for actual marketing services at fair value are permissible under RESPA if unrelated to referral obligations.

6. What is the RESPA rule for paying a real estate broker a commission for brokerage services performed?

   Permitted if it is for bona fide services actually performed. RESPA permits broker commissions as they compensate for legitimate real estate services in connection with property transactions.

7. What is the core RESPA rule for fee splitting between two settlement service providers?

   Only permitted if each performs actual, necessary services for the fee. RESPA allows fee splitting only when both parties contribute essential services, preventing unearned compensation in settlements.

8. Which phrase best defines a RESPA-prohibited "thing of value" for Section 8 purposes?

   Any payment, benefit, or consideration with monetary value. RESPA broadly interprets 'thing of value' to encompass any form of compensation that could incentivize improper referrals under Section 8.

9. Which option is permitted under RESPA: paying for referrals or paying for actual services performed?

   Paying for actual services performed. RESPA permits payments for genuine services rendered but strictly forbids compensation tied to business referrals to avoid kickbacks.

10. Identify whether this is RESPA-compliant: a builder requires use of its affiliated title company.

    Noncompliant; it is required use even if an affiliation exists. Mandating an affiliated provider's use violates RESPA by restricting borrower choice, even with existing business ties.

11. What is the RESPA definition of a "referral" for Section 8 analysis?

    Any action that influences selection of a settlement service provider. Under RESPA, a referral includes any conduct aimed at directing business to a specific provider in covered real estate settlements.

12. What is the RESPA rule on gifts or incentives tied to the number of referrals made?

    Prohibited; it is a thing of value for referrals. Gifts linked to referral volume violate Section 8 as they constitute impermissible things of value exchanged for business direction.

13. What is the key RESPA condition for AfBA compensation besides ownership returns?

    Only a return on ownership interest is allowed; no referral fees. In AfBAs, compensation is restricted to legitimate ownership dividends to avoid violating anti-kickback rules in RESPA Section 8.

14. Identify the RESPA term for a provider that offers a settlement service in a covered transaction.

    Settlement service provider. RESPA defines entities providing services like title insurance or appraisals in federally related mortgage transactions as settlement service providers.

15. What is the key RESPA condition that makes an AfBA referral permissible regarding borrower choice?

    The consumer is not required to use the affiliated provider. AfBA referrals are allowed if borrowers retain freedom to choose providers, preserving competition and consumer rights under RESPA.

16. Identify the RESPA rule on an employer paying its own employees for referrals to the employer's services.

    Permitted; payments to bona fide employees are exempt from Section 8. Section 8 exemptions allow employers to compensate employees for internal referrals without violating anti-kickback provisions.

17. Identify whether this is RESPA-compliant: two providers split a fee but only one did the work.

    Noncompliant; it is a split for unperformed services under Section 8(b). Fee splitting without services from both parties breaches Section 8(b), constituting unearned fees in settlement processes.

18. Which option is a RESPA "settlement service": home inspection or selling furniture?

    Home inspection. Home inspections qualify as settlement services under RESPA due to their role in real estate closings, unlike unrelated activities like furniture sales.

19. What is the RESPA term for a business relationship where a referring party has ownership in the provider?

    Affiliated business arrangement (AfBA). AfBAs involve ownership ties where referrals may occur, regulated under RESPA to prevent abusive practices in settlements.

20. What disclosure is required for a permissible AfBA referral under RESPA?

    An AfBA disclosure describing the relationship and estimated charges. RESPA mandates AfBA disclosures to inform consumers of relationships and costs, ensuring transparency in permissible referrals.

21. What is the RESPA section that prohibits kickbacks and unearned fees in settlement services?

    RESPA Section 8. RESPA Section 8 specifically addresses anti-kickback provisions to ensure fair practices in real estate settlement services.

22. What is a RESPA Section 8(b) violation in one sentence?

    Charging or splitting a fee for settlement services not actually performed. Section 8(b) prevents unearned fees by disallowing fee divisions where no corresponding services are rendered in settlement transactions.

23. Identify whether this is RESPA-compliant: a title company pays an agent $100 per closed referral.

    Noncompliant; it is a thing of value paid for referrals. Direct payments per referral violate Section 8(a) as kickbacks for business direction in federally related mortgage transactions.

24. Identify whether this is RESPA-compliant: a provider waives fees only for agents who send referrals.

    Noncompliant; it is a thing of value conditioned on referrals. Conditional fee waivers based on referrals provide impermissible value, violating RESPA's anti-kickback prohibitions.

25. What is a RESPA Section 8(a) violation in one sentence?

    Giving or accepting anything of value for a settlement service referral. Section 8(a) prohibits kickbacks by banning exchanges of value solely for referring business involving federally related mortgage loans.

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