Finance
Under the federal 'Real Estate Settlement Procedures Act' (RESPA), a lender who refers a buyer to a title company in which the lender has a financial interest must:
AA. Keep the relationship confidential
BB. Disclose the affiliated business arrangement to the borrower and provide an estimate of the title company's charges✓ Correct
CC. Guarantee the title company's services
DD. Require the borrower to use the affiliated company
Explanation
RESPA Section 8(c)(4) requires lenders with affiliated business arrangements (AfBAs) to disclose the relationship to the consumer and provide an estimate of the charges. The consumer cannot be required to use the affiliated service provider as a condition of the loan, and the disclosure must be given at or before the time of referral.
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