RESPA REALITIES
The National Association of REALTORS® RESPA Awareness Campaign

In 1974, Congress enacted the Real Estate Settlement Procedures Act (RESPA) to address problems in the real estate settlement process including:

  • abusive practices that increased costs to homebuyers
  • lack of understanding about the settlement process and its costs

RESPA's purpose is twofold:

  • to provide consumers with information about the real estate mortgage transaction and the costs associated with it
  • to prohibit certain practices, such as referral fees between settlement service providers, that result in higher costs and reduced quality to consumers

check out more RESPA information

RESPA CARD

The DO's and DON'Ts examples listed here are just that, only examples. The are not all-inclusive and small variations in the facts can lead to different outcomes. They also do not take into consideration any additional regulations that may have been imposed in your state. Consult a lawyer familiar with RESPA for specific advise.

 

RESPA DO's RESPA DON'Ts
Allows a title agent to provide, during an open house, a modest food tray in connection with the company's marketing information indicating that the refreshments are sponsored by the title company. Prohibits a title company from regularly providing dinner and reception for real estate agents.
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 Prohibits acceptance of discounted or free business equipment, such as a free lock-box
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. 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.
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

Prohibits acceptance of a dinner paid for by a home inspector who doesn't attend the dinner to market his/her services to you.
Allows a hazard insurance company to give you marketing materials such as notepads, pens and desk blotters which promote the hazard insurance company's name. Prohibits acceptance of contributions from a tltle 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.
Allows a title agent to pay for your dinner when business is discussed, provided that such dinners are not a regular occurence.

Prohibits accepting gifts from mortgage brokers, such as paying your green's fee.
  Prohibits a mortgage broker or title company from paying for your tickets to a sporting event.
Speak with a RESPA attorney to make sure you comply with all applicable laws. Some state and local laws prohibit activites that are permissible under RESPA. 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.

For additional information on RESPA visit:
www.realtor.org/RESPA

 DON'T EVER accept payment from a mortgage lender just for taking a loan application.
   
 

RESPA

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Glossary of Terms

 

September 2019
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