The National Associations of Realtor as compiled below a list of questions that we commonly receive about the Real Estate Settlement Act, or “RESPA”, for both real estate professionals and REALTOR® associations. Note the opinions below do not constitute legal advice and it is recommended that you consult with an attorney if you have questions about how to comply with RESPA.
A real estate agent is sponsoring an open house for other agents. A local title agency reimburses the real estate agent for the cost of a luncheon and the title agency does not market its title services at the open house. Is this a violation of Section 8 of RESPA?
A real estate broker and a mortgage lender agree to jointly place a full-page advertisement in a local newspaper. Each company gets exactly one-half of the page to advertise its services. Each company pays one-half of the cost of the advertisement. Is this a violation of Section 8 of RESPA?
The owner of a title agency meets the owner of a real estate brokerage firm for dinner at a local restaurant. The purpose of the dinner is for the two individuals to discuss future marketing opportunities. After the discussion has ended, the owner of the title agency pays for the real estate broker’s dinner. Is this a violation of Section 8 of RESPA?
A mortgage lender devises a contest among local real estate agents where the real estate agent who refers the most customers to the lender will receive a vacation cruise to Alaska. Is this a violation of Section 8 of RESPA?
A title company places a fax machine in the office of a real estate broker to expedite the process of placing title orders with the title company. The title company expects that the real estate broker will refer business to the title company if the broker can quickly send information to the title company. The fax machine is used only for communication between the real estate broker and the title company. The real estate broker has a separate fax machine for general business. Is this a violation of Section 8 of RESPA?
A settlement provider conducts real estate closings in the conference room of the real estate broker with the expectation that the real estate broker will refer closing business to the settlement agent. The settlement agent pays fair market value to rent the conference room for each closing. Is this a violation of Section 8 of RESPA?
A real estate broker pays its real estate agents $20 for each referral the agents make to the real estate broker’s affiliated mortgage company. Is this a violation of Section 8 of RESPA?
A homeowner’s insurance company gives a real estate broker marketing materials, such as desk calendars, pens, and notepads, all of which promote the homeowner’s insurance company’s name. Is this a violation of Section 8 of RESPA?
Do RESPA’s prohibitions on referral fees apply to all settlement service providers?
Can a title/mortgage company sponsor a luncheon for real estate professionals and offer CLE?
Can real estate professionals distribute to prospective buyers flyers containing current loan rate information branded by the mortgage lender?
In my business model, I pair buyers with real estate professionals in different geographical areas based upon information I received from consumers and from participating real estate professionals. I receive a referral fee from the other broker when a deal settles (I am a licensed broker). Can I expand my business model to pair real estate agents with mortgage brokers (and collect a fee) without violating RESPA?