If a real estate agent receives a $1,000 referral fee from a title company for referrals, this action is:

• A. Legal if disclosed
• B. Allowed under RESPA
• C. Prohibited only if state law requires consent
• D. Violates RESPA

Answer: (D)

This scenario tests RESPA’s rule against kickbacks and referral fees in real estate settlements. RESPA prohibits paying or receiving any fee, kickback, or thing of value in exchange for referrals of settlement services, such as title company referrals. A real estate agent taking money from a title company just for sending business creates bias in referrals and can inflate closing costs for consumers, which RESPA aims to prevent. Therefore, this action is not allowed under RESPA, even if someone claims it’s disclosed or consented to. State law doesn’t override this federal protection, and the arrangement isn’t allowed simply because consent is given.