Agency
A Mississippi agent earns a referral fee for referring a past client to a mortgage lender. Under RESPA, this is permissible only if:
AThe referral fee is disclosed to the client
BThe referral fee arrangement constitutes a legitimate affiliated business arrangement (AfBA) with full disclosure and consumer freedom to choose✓ Correct
CThe lender provides the lowest rate in the market
DMREC approves the referral arrangement
Explanation
RESPA prohibits kickbacks for referrals of settlement services. A referral fee from a mortgage lender would only be permissible under an AfBA with proper disclosure, an ownership interest, and consumer freedom to select other providers.
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