Section 8 of RESPA states you cannot pay or receive a fee or thing of value in return for referring settlement service business on mortgage loans. Keep in mind; however, you can pay a fee to a settlement service provider for any goods actually furnished or services actually received. But there is a catch there too. You must still ensure the fees you are paying for those goods and services are not unnecessarily inflated and are in line with the going market value. Along the same lines, if you pay a provider a fee for multiple services, you need to be able to show the breakdown of those individual goods/services.
Kevin explains more in the video.
Video Highlights:
- Financial institutions cannot pay or receive a fee or thing of value for the referral of mortgage loans.
- Paying fees for goods/services that are over and above the market value may also be deemed an illegal kickback.
- If a single fee is paid to a provider for multiple services, you should be able to demonstrate that the payment is reasonable for all the services actually performed.
Published
2023/11/6
