Definition: In 1974, Congress enacted RESPA, the Real Estate Settlement and Procedures Act. The goal was consumer protection by requiring disclosure of all costs and business relationships related to the closing of a real estate transaction.
RESPA tightly restricts the referral of business between parties providing services to buyers and sellers in the settlement process. It also makes illegal the receipt of kickbacks in any form for the referral of settlement services.
Examples:
It is a violation of RESPA for a title insurance company to sponsor a round of golf for real estate brokers.
