Here are some questions that are often asked regarding RESPA. We hope that you find them informative.
Frequently Asked Questions:
Q: What are the penalties for a RESPA violation?
A: Any person who violates RESPA’s provisions may be fined up to $10,000 or imprisoned for up to one year, or both. Additionally, the person violating RESPA is liable to the person charged for the settlement service for three times the amount paid for the settlement service. In addition to criminal penalties, RESPA violations are being combined with other private lawsuit claims such as antitrust violations, exposing violators to additional civil liability.
Q: Can a real estate licensee require a client to use a settlement service provider with which the licensee has a CBA?
A: No. A person making such a referral may not require the use of a particular settlement service provider.
Q: May a broker or salesman rent space to (and collect rent from) a lender for the lender’s use in making loans to the broker’s or salesman’s customers?
A: Yes. However, the rent must reflect the fair market value of the space, without regard to the value or number of loans made through the use of that space. Affiliated licensees and lenders also may need to follow the CBA rules. FHA mortgagees also need to comply with special rules.
Q: Are promotional and educational activities not conditional on the referral of business permissible?
A: Yes. Promotional and educational activities that are not conditional on the referral of business and do not involve defraying expenses that otherwise would be incurred by a person in a position to refer business are permissible.
If you feel that one of these applies to your lending experience, then call our office for a free consultation at (865) 428-6737. We serve clients throughout East Tennessee and in many other states and have had lawsuits over property in the counties of Blount, Knox, and Sevier. Let us help you!