Potential Violations of Section 8 of the
Real Estate Settlement Procedures Act
The Federal Deposit Insurance Corporation (FDIC) has prepared the attached document to alert FDIC-supervised institutions of practices that may result in violations of Section 8 of the Real Estate Settlement Procedures Act (RESPA). Violations of Section 8 carry criminal and civil penalties. Recent compliance examinations have uncovered violations of Section 8 of RESPA and the regulation that implements RESPA, the Department of Housing and Urban Development's (HUD) Regulation X.
Section 8 of RESPA generally prohibits:
The payment and receipt of a fee or thing of value in return for the referral of settlement service business for a federally related mortgage loan, and
Receipt or payment of any portion or splits of charges (including unearned fees) except for settlement services actually performed.
Distribution: FDIC-Supervised Banks (Commercial and Savings)
NOTE: Paper copies of FDIC financial institutions letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room100, Washington, DC 20434 (800-276-6003 or (703) 562-2200).