Finance
Under the Real Estate Settlement Procedures Act (RESPA), which of the following practices is prohibited?
ACharging a loan origination fee
BPaying kickbacks or referral fees to parties not performing a service in the transaction✓ Correct
CCollecting an escrow impound for property taxes
DRequiring title insurance as a condition of the loan
Explanation
RESPA prohibits kickbacks, fee-splitting, and referral fees for settlement services where no actual service was performed. It is designed to protect consumers from unnecessarily increased settlement costs caused by referral arrangements.
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