NAR Government Affairs

Defending the Mortgage Interest Deduction

RESPA

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

What's New

HUD Announces Three Settlements With Builders Involved In Captive Title Reinsurance Arrangements

(Oct. 13) The department's enforcement effort resulted in nearly $2 million in settlements.
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HUD Settles Cases Against New England Attorney And Property Appraisal Firm

(Sept. 6) The cases involved paying kickbacks for referrals. The settlements follow last year's RESPA actions against a New England lender.
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HUD Reaches RESPA Settlements With Major Lender And Builders For $1.6 Million

(July 18) These agreements are HUD's first settlements involving captive title reinsurance.
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How to Comply

REALTORS® must ensure that they are in compliance with RESPA, as penalties include triple damages, fines and even imprisonment. Learn how to play by the rules here.
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Affiliated Business Arrangements

In 1983, RESPA's Section 8 anti-kickback provision was amended to allow an exception for affiliated business arrangements so long as certain requirements are met. Learn what those requirements are and how to determine whether a business arrangement meets them.
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Marketing Agreements

What is a legitimate marketing agreement? What types of agreements could be misconstrued by RESPA enforcement officials? Understand the differences here.
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