Finance
Under RESPA, which of the following is an allowable marketing relationship between a title company and a real estate broker?
AThe title company paying the broker a referral fee for each closed transaction
BThe broker owning an affiliated title company with proper disclosure under RESPA Section 3 and CFPB guidelines✓ Correct
CThe title company providing the broker with free office space in exchange for referrals
DAny arrangement where both parties benefit financially
Explanation
Affiliated business arrangements (AfBAs) are permitted under RESPA Section 8(c)(4) if: (1) the arrangement is disclosed, (2) the referral is not required, and (3) the referred service is at market rates. Undisclosed quid-pro-quo arrangements are prohibited.
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