Definition
RESPA Section 8
RESPA Section 8 is the part of the Real Estate Settlement Procedures Act that prohibits giving or accepting anything of value for referrals of settlement service business on federally related mortgage loans, and bars splitting fees for services not actually performed. It is the main reason mortgage co-marketing must be structured carefully.
Treat this as a general summary rather than legal advice. Section 8 applies to settlement service providers, including lenders, loan officers, real estate agents, title companies and others involved in closing a federally related mortgage. The prohibited thing of value is broad: cash, gifts, free services, paid trips, below-market rent, or marketing paid on someone's behalf can all count if tied to referrals.
Common risk areas for loan officers include:
- Paying for a real estate agent's advertising, leads or tools without the agent paying a fair share.
- Desk rentals or marketing services agreements priced above fair market value.
- Lead arrangements that function as payment per referral.
Co-marketing is not banned. A joint ad, open house or shared website can be permissible when each party pays its proportionate, fair-market share of the cost and the arrangement is documented. Affiliated business arrangements have their own disclosure requirements.
Example. A loan officer and an agent co-host a homebuyer seminar costing $2,000. If each appears equally and each pays $1,000, the split is proportionate. If the loan officer pays the full $2,000 while the agent refers buyers, that pattern raises Section 8 questions. The CFPB enforces RESPA, and states may have additional rules. Talk to compliance before launching any partner program.
Related terms
FAQ · 2 questions
Questions about RESPA Section 8
Can I give a real estate agent a free mortgage calculator for their website?
It may be treated as a thing of value if tied to referrals. Some arrangements are structured to be compliant, but talk to your compliance team before offering tools or marketing to referral sources.
Is co-marketing with real estate agents legal under RESPA?
It can be, when each party pays its fair, proportionate share and the arrangement is not a disguised payment for referrals. Document the costs and get compliance approval first.
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