What is RESPA?

What is RESPA? This question has been asked to me a lot recently from people in my networking groups to consumers. So I figured there's probably other people who do not know what it is and thought this post would be helpful.

RESPA stands for (Real Estate Settlement Procedures Act), a federal law enacted to protect consumers from abusive or excessive fees in real estate transactions. Among the requirements of RESPA are rules regarding cooperative marketing and referral kickbacks.

In short, a loan officer cannot offer anything in exchange for business referrals. In times past, it wasn't uncommon for loan officers and mortgage brokers to give gift certificates or larger-valued items to people who referred them business. Now, anything beyond a simple "Thank You" is a violation of the law, and can be prosecuted.

(Conceivably, this is to keep the loan fees down, as a referral bonus or thank-you gift from the loan officer could mean higher costs for the person getting the loan.)

Any loan officer who isn't heeding the law is putting both himself and YOU, the referral source, at risk of fines up to $10,000 and even up to a year in prison time!

Below is a link where you can find more info on RESPA laws.

Take Care and Good Selling

NN

http://www.hud.gov/offices/hsg/sfh/res/resp2607.cfm