Escrow & TitleIntermediateAlaska Exam

Under RESPA, which of the following is prohibited?

ACharging a reasonable title insurance premium
BPaying a kickback or referral fee for the referral of settlement service businessCorrect
CRequiring impound accounts for taxes and insurance, though this can vary by county
DProviding a good faith estimate of closing costs

Why Paying a kickback or referral fee for the referral of settlement service business Is Correct

Answer B: Paying a kickback or referral fee for the referral of settlement service business

RESPA prohibits kickbacks and unearned fees in connection with federally related mortgage transactions. Paying or receiving referral fees for settlement services (such as title insurance, escrow, or appraisal) is illegal under Section 8 of RESPA.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

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