EthicsQuestion 328 of 400
An affiliated business arrangement (where a broker refers borrowers to a title company it partly owns) can be permissible under RESPA only if:
a.The broker keeps the ownership secret
b.The borrower is required to use the affiliate
c.The relationship is disclosed, use is not required, and only a return on ownership is received
d.The affiliate pays the broker a per-referral bonus
Explanation
RESPA permits affiliated business arrangements only with written disclosure of the relationship, no requirement to use the affiliate, and returns limited to a genuine ownership interest (not referral fees). Secrecy, mandatory use, and per-referral bonuses each violate the safe-harbor conditions.
Law Reference: RESPA Section 8 / affiliated businessPractice all 400 questions free — no signup required.
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