Finance
Under RESPA (Real Estate Settlement Procedures Act), a kickback arrangement where a title company pays a real estate broker for referrals is:
APermitted if disclosed to both parties
BProhibited and subject to criminal penalties✓ Correct
CAllowed if the amount does not exceed $500
DRequired to be disclosed on the Closing Disclosure only
Explanation
RESPA Section 8 strictly prohibits kickbacks and unearned fee arrangements in connection with federally related mortgage loans. Referral fees paid to brokers by settlement service providers are illegal and subject to criminal penalties of up to $10,000 fine and one year imprisonment.
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