| Real Estate Settlement Procedures Act (RESPA) |
| Please Note: RESPA prohibits giving or receiving anything for the referral of settlement services, subject to certain exceptions. Violators of RESPA may receive harsh penalties, including triple damages, fines, and even imprisonment. |
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| Respa DONT's |
| Here are a few of the examples of what RESPA prohibits. |
| - prohibits a title company from regularly providing dinner and reception for real estate agents. |
| - prohibits acceptance of reimbursement of the cost for an open house lunch from a mortgage broker who doesn't display any marketing materials at the event. |
| - prohibits acceptance of a dinner paid for by a home inspector who doesn't attend the dinner to market his/her services to you. |
| - prohibits acceptance of contributions from a title company to offset the cost of a real estate agent's promotional event except to the extent of the value of any marketing done by the title company during that event. |
| - prohibits accepting gifts from mortgage brokers, such as paying your greens fees. |
| - prohibits a mortgage broker or title company from paying for your tickets to a sporting event. |
| - prohibits participation in a tropical "get away" weekend, the cost of which is underwritten by a title company, during which only two hours is dedicated to marketing by the title company and the remainder is recreation. |
| - don't ever accept payment from a mortgage lender just for taking a loan application. |
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| Respa DO's |
| Here are a few examples of what RESPA allows. |
| - allows a title agent to provide, during an open house, a modest food tray in connection with the title company's marketing information indicating that the title company sponsors the refreshments. |
| - allows a home inspection company to sponsor association events when representatives from that company also attend and to post a sign identifying its services and sponsorship of the event. |
| - allows you to jointly advertise with a mortgage broker if you pay a share of the costs in proportion with your prominence in the advertisement. |
| - allows a lender to pay you fair market value to rent a desk, copy machine and phone line in your office to pre-qualify applicants. |
| - allows hazard insurance company to give you marketing materials such as notepads, pens and desk blotters which promote the hazard insurance company's name. |
| - allows a title agent to pay for your dinner when business is discussed, provided that such dinners are not a regular occurrence. |
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| For additional information on RESPA, please click here |
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