Federal Mortgage LawsQuestion 86 of 400
Two loan officers agree that each will send the other's spouse's insurance agency referrals in exchange for cash per closed deal. Under RESPA, this reciprocal referral-for-fee agreement is:
a.A prohibited kickback arrangement
b.Allowed because it is reciprocal
c.Allowed because both are licensed
d.Allowed if under $1,000 per year
Explanation
RESPA Section 8 prohibits any agreement or understanding to refer settlement service business in exchange for a thing of value. Reciprocity, licensing, or a dollar threshold does not make the arrangement legal; paying per referral is exactly what the statute forbids. Only payment for services actually performed at reasonable value is allowed.
Law Reference: Real Estate Settlement Procedures Act (RESPA Section 8)Practice all 400 questions free — no signup required.
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