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Disclaimer
RESPA was enacted because Congress felt that consumers needed protection
from "... unnecessarily high settlement charges caused by certain
abusive practices that have developed in some areas of the country."
Some of the practices Congress was concerned about are discussed below.
Most professionals in the settlement business provide good service and
do not engage in these practices.
Prohibited Fees. It is illegal under RESPA for anyone
to pay or receive a fee, kickback or anything of value because
they agree to refer settlement service business to a particular person
or organization. For example, your mortgage lender may not pay your real
estate broker $250 for referring you to the lender. It is also illegal
for anyone to accept a fee or part of a fee for services if that person
has not actually performed settlement services for the fee. For example,
a lender may not add to a third party's fee, such as an appraisal fee,
and keep the difference.
Permitted Payments. RESPA does not prevent title
companies, mortgage brokers, appraisers, attorneys, settlement/closing
agents and others, who actually perform a service in connection with the
mortgage loan or the settlement, from being paid for the reasonable
value of their work. If a participant in your settlement appears to be
taking a fee without having done any work, you should advise that person
or company of the RESPA referral fee prohibitions. You may also speak
with your attorney or complain to a regulator listed in the Appendix to
this Booklet.
Penalties. It is a crime for someone to pay or receive
an illegal referral fee. The penalty can be a fine, imprisonment or
both. You may be entitled to recover three times the amount of the
charge for any settlement service by bringing a private lawsuit. If you
are successful, the court may also award you court costs and your
attorney's fees. |
