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Who Falls Under RESPA Regulation?

Knowing the Difference is Important for Marketing


Congress enacted RESPA, the Real Estate Settlement and Procedures Act, in order to regulate the activities of vendors involved in the settlement of real estate transactions. The impetus for the Act was abuses of the consumer that resulted from overcharges for services, charges for services of no value, and inflated costs due to AfBA’s, or Affiliated Business Arrangments.

Certain activities and businesses are regulated by RESPA, and others are not. Knowing the difference will help you to stay out of trouble in your marketing efforts. That’s because certain cooperative marketing between regulated businesses is strictly prohibited by RESPA. Services regulated by RESPA include:

  • real estate agents and brokers;
  • insurance agents;
  • appraisers;
  • home warranty companies;
  • mortgage brokers;
  • title companies and title agents;
  • credit reporting agencies;
  • document preparation companies; and
  • home and pest inspectors.
  • Service providers NOT regulated by RESPA include:

  • usually any services that are provided after the closing;
  • building and remodel contractors;
  • service and repair contractors;
  • moving companies;
  • landscapers; and
  • other home improvement or design companies.
  • Knowing the difference is important if you are anticipating doing any cooperative marketing with any of these companies. If you plan on any marketing ventures with a regulated business, you really need to be very careful.

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