Under RESPA (Real Estate Settlement Procedures Act), what is prohibited?

RESPA (Real Estate Settlement Procedures Act of 1974) regulates settlement services in residential real estate transactions financed by federally-related mortgages. Key prohibitions: (1) Section 8(a) — payment of kickbacks or referral fees in exchange for referrals of settlement services (title insurance, mortgage services, escrow, home warranty, surveys, appraisals, pest inspection); (2) Section 8(b) — fee-splitting where no actual services are rendered (paying someone for a referral and labeling it a 'fee'); (3) Section 9 — sellers cannot require buyers to use a specific title insurance company. Disclosure requirements: (1) Loan Estimate within 3 business days of mortgage application; (2) Closing Disclosure at least 3 business days before closing; (3) Affiliated Business Arrangement disclosure if the broker has financial interest in any settlement service provider being recommended. Penalties: criminal fines up to $10,000 and 1 year imprisonment; civil penalties up to 3x the amount of fees; CFPB enforcement. Practical impact: brokers must be careful about gifts, marketing arrangements, and joint ventures with lenders, title companies, etc. Some 'marketing' arrangements may be prohibited referral fees in disguise.