Colorado License LawIntermediateColorado Exam
When can a Colorado broker legally accept an undisclosed referral fee from a title company?
AWhenever the amount is less than $100
BNever — undisclosed referral fees from settlement service providers violate RESPA and state lawCorrect
CWhen the buyer is paying for the title insurance, which most practitioners would generally accept
DOnly in commercial transactions
Why Never — undisclosed referral fees from settlement service providers violate RESPA and state law Is Correct
Answer B: Never — undisclosed referral fees from settlement service providers violate RESPA and state law
Undisclosed referral fees from settlement service providers (title companies, lenders, inspectors) are prohibited under RESPA and Colorado license law. Any compensation arrangement must be disclosed to all affected parties.
Key Colorado License Law Terms in This Question
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- Under RESPA, a lender may not pay referral fees to settlement service providers. This prohibition is found in which section?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:Finance
- A Colorado broker's license is on 'inactive' status. Which of the following can this broker legally do?Colorado License Law
- In Colorado, a title company performs a title search primarily to:Escrow & Title
- A Colorado property management company receives a commission for referring tenants to a specific insurance company. This referral fee must be:Property Management
- A Colorado broker is required to disclose their license status to the parties in a transaction:Colorado License Law
- In Colorado, a title company that discovers a judgment lien against the seller during a title search will typically:Escrow & Title
- A Colorado title company discovers an old unreleased mortgage from 1995 still recorded against the property. The title company will likely:Escrow & Title
Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
State-Specific Concepts
License Law
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