12 U.S.C. § 2607

Prohibition against kickbacks and unearned fees

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(a) Business referrals

No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.

(b) Splitting charges

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

Nothing in this section shall be construed as prohibiting (1) the payment of a fee (A) to attorneys at law for services actually rendered or (B) by a title company to its duly appointed agent for services actually performed in the issuance of a policy of title insurance or (C) by a lender to its duly appointed agent for services actually performed in the making of a loan, (2) the payment to any person of a bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed, (3) payments pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and brokers, (4) affiliated business arrangements so long as (A) a disclosure is made of the existence of such an arrangement to the person being referred and, in connection with such referral, such person is provided a written estimate of the charge or range of charges generally made by the provider to which the person is referred (i) in the case of a face-to-face referral or a referral made in writing or by electronic media, at or before the time of the referral (and compliance with this requirement in such case may be evidenced by a notation in a written, electronic, or similar system of records maintained in the regular course of business); (ii) in the case of a referral made by telephone, within 3 business days after the referral by telephone,11 So in original. (and in such case an abbreviated verbal disclosure of the existence of the arrangement and the fact that a written disclosure will be provided within 3 business days shall be made to the person being referred during the telephone referral); or (iii) in the case of a referral by a lender (including a referral by a lender to an affiliated lender), at the time the estimates required under section 2604(c) of this title are provided (notwithstanding clause (i) or (ii)); and any required written receipt of such disclosure (without regard to the manner of the disclosure under clause (i), (ii), or (iii)) may be obtained at the closing or settlement (except that a person making a face-to-face referral who provides the written disclosure at or before the time of the referral shall attempt to obtain any required written receipt of such disclosure at such time and if the person being referred chooses not to acknowledge the receipt of the disclosure at that time, that fact shall be noted in the written, electronic, or similar system of records maintained in the regular course of business by the person making the referral), (B) such person is not required to use any particular provider of settlement services, and (C) the only thing of value that is received from the arrangement, other than the payments permitted under this subsection, is a return on the ownership interest or franchise relationship, or (5) such other payments or classes of payments or other transfers as are specified in regulations prescribed by the Bureau, after consultation with the Attorney General, the Secretary of Veterans Affairs, the Federal Home Loan Bank Board, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Secretary of Agriculture. For purposes of the preceding sentence, the following shall not be considered a violation of clause (4)(B): (i) any arrangement that requires a buyer, borrower, or seller to pay for the services of an attorney, credit reporting agency, or real estate appraiser chosen by the lender to represent the lender’s interest in a real estate transaction, or (ii) any arrangement where an attorney or law firm represents a client in a real estate transaction and issues or arranges for the issuance of a policy of title insurance in the transaction directly as agent or through a separate corporate title insurance agency that may be established by that attorney or law firm and operated as an adjunct to his or its law practice.

(d) Penalties for violations; joint and several liability; treble damages; actions for injunction by Bureau and Secretary and by State officials; costs and attorney fees; construction of State laws(1) Any person or persons who violate the provisions of this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both.(2) Any person or persons who violate the prohibitions or limitations of this section shall be jointly and severally liable to the person or persons charged for the settlement service involved in the violation in an amount equal to three times the amount of any charge paid for such settlement service.(3) No person or persons shall be liable for a violation of the provisions of subsection (c)(4)(A) if such person or persons proves by a preponderance of the evidence that such violation was not intentional and resulted from a bona fide error notwithstanding maintenance of procedures that are reasonably adapted to avoid such error.(4) The Bureau, the Secretary, or the attorney general or the insurance commissioner of any State may bring an action to enjoin violations of this section. Except, to the extent that a person is subject to the jurisdiction of the Bureau, the Secretary, or the attorney general or the insurance commissioner of any State, the Bureau shall have primary authority to enforce or administer this section, subject to subtitle B of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5511 et seq.].(5) In any private action brought pursuant to this subsection, the court may award to the prevailing party the court costs of the action together with reasonable attorneys fees.(6) No provision of State law or regulation that imposes more stringent limitations on affiliated business arrangements shall be construed as being inconsistent with this section.(Pub. L. 93–533, § 8, Dec. 22, 1974, 88 Stat. 1727; Pub. L. 94–205, § 7, Jan. 2, 1976, 89 Stat. 1158; Pub. L. 98–181, title I [title IV, § 461(b), (c)], Nov. 30, 1983, 97 Stat. 1231; Pub. L. 100–242, title V, § 570(g), Feb. 5, 1988, 101 Stat. 1950; Pub. L. 102–54, § 13(d)(4), June 13, 1991, 105 Stat. 275; Pub. L. 104–208, div. A, title II, § 2103(c)(2), (d), Sept. 30, 1996, 110 Stat. 3009–400; Pub. L. 111–203, title X, § 1098(6), (7), July 21, 2010, 124 Stat. 2104.)Editorial NotesReferences in Text

The Consumer Financial Protection Act of 2010, referred to in subsec. (d)(4), is title X of Pub. L. 111–203, July 21, 2010, 124 Stat. 1955. Subtitle B of the Act is classified generally to part B (§ 5511 et seq.) of subchapter V of chapter 53 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of this title and Tables.

Amendments

2010—Subsec. (c)(5). Pub. L. 111–203, § 1098(6), which directed substituting “Bureau” for “Secretary”, was executed by making the substitution for “Secretary” the first time appearing, to reflect the probable intent of Congress.

Subsec. (d). Pub. L. 111–203, § 1098(7)(A), inserted “Bureau and” before “Secretary” in heading that had been supplied editorially.

Subsec. (d)(4). Pub. L. 111–203, § 1098(7)(B), added par. (4) and struck out former par. (4) which read as follows: “The Secretary, the Attorney General of any State, or the insurance commissioner of any State may bring an action to enjoin violations of this section.”

1996—Subsec. (c)(4). Pub. L. 104–208, § 2103(c)(2), substituted “affiliated business arrangements” for “controlled business arrangements”.

Subsec. (c)(4)(A). Pub. L. 104–208, § 2103(d), amended subcl. (A) generally. Prior to amendment, subcl. (A) read as follows: “at or prior to the time of the referral a disclosure is made of the existence of such an arrangement to the person being referred and, in connection with the referral, such person is provided a written estimate of the charge or range of charges generally made by the provider to which the person is referred, except that where a lender makes the referral, this requirement may be satisfied as part of and at the time that the estimates of settlement charges required under section 2604(c) of this title are provided,”.

Subsec. (d)(6). Pub. L. 104–208, § 2103(c)(2), substituted “affiliated business arrangements” for “controlled business arrangements”.

1991—Subsec. (c)(5). Pub. L. 102–54 substituted “Secretary of Veterans Affairs” for “Administrator of Veterans’ Affairs”.

1988—Subsec. (c)(5). Pub. L. 100–242 substituted “clause (4)(B)” for “clause 4(B)”.

1983—Subsec. (c). Pub. L. 98–181, § 461(b), redesignated cl. (4) as (5), added cl. (4) and provisions following cl. (5), as so redesignated, relating to arrangements which shall not be considered a violation of cl. (4)(B).

Subsec. (d)(2). Pub. L. 98–181, § 461(c), substituted provisions setting forth the liability of persons violating the prohibitions or limitations of this section for provisions setting forth liability, in addition to penalties provided in par. (1), of persons violating subsecs. (a) and (b) of this section, plus costs and attorney’s fees.

Subsec. (d)(3) to (6). Pub. L. 98–181, § 461(c), added pars. (3) to (6).

1976—Subsec. (c). Pub. L. 94–205 added cls. (3) and (4).

Statutory Notes and Related SubsidiariesEffective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.

Effective Date of 1983 Amendment

Amendment by Pub. L. 98–181 effective Jan. 1, 1984, see section 461(f) of Pub. L. 98–181, set out as a note under section 2602 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–205 effective Jan. 2, 1976, see section 12 of Pub. L. 94–205, set out as a note under section 2602 of this title.

Effective Date

Section effective 180 days after Dec. 22, 1974, see section 20 of Pub. L. 93–533, set out as a note under section 2601 of this title.

Transfer of Functions

Federal Home Loan Bank Board abolished and functions transferred, see sections 401 to 406 of Pub. L. 101–73, set out as a note under section 1437 of this title.

Notes of Decisions

Cited in 514 cases (53 in the last 5 years), 1979–2025 · leading case: Alston v. Countrywide Fin. Corp., 585 F.3d 753 (3rd Cir. 2009).

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Alston v. Countrywide Fin. Corp., 585 F.3d 753 (3rd Cir. 2009). · cites it 9× “This putative class action was brought by homebuyers who sought to recover statutory treble damages pursuant to section 8(d)(2) of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), codified at 12 U.S.C. § 2607 (d)(2). Plaintiffs alleged that their private mortgage…”

Mullinax v. Radian Guar. Inc., 199 F. Supp. 2d 311 (M.D.N.C. 2002). · cites it 14× “(“Mullinax”) and Perry Pike (“Pike”) (together “Plaintiffs”) 1 allege violations of Section 8 of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607 . For the reasons that follow, Defendants’ Motion to Dismiss is GRANTED in Part and DENIED in part.”

McKell v. Washington Mut., Inc., 49 Cal. Rptr. 3d 227 (Cal. Ct. App. 2006). · cites it 9× “), Civil Code section 1770, subdivision (a)(19)and federal lawRESPA ( 12 U.S.C. § 2607 ), HUD regulations and policy statements interpreting RESPA, Regulation X ( 24 C.”

Fangman v. Genuine Title, LLC, 136 A.3d 772 (Md. 2016). · cites it 7× “7 In the second amended complaint, Appellants alleged that the Genuine Title Appellees and Lender Appellees violated 12 U.S.C. § 2607 (a) and (b), part of the Real Estate Settlement *688 Procedures Act (“RESPA”); 8 RP § 14-127; and Md.”

Marie O. Pedraza v. United Guar. Corp., 313 F.3d 1323 (11th Cir. 2002). · cites it 8× “1 The class claimed that in 1996 UG began systematically paying kickbacks to lenders, which in exchange agreed to steer borrowers to UG for their mortgage insurance needs, and that UG thereby violated the anti-kickback provision contained in the Real Estate Settlement Procedures…”

Cohen v. JP Morgan Chase & Co., 498 F.3d 111 (2d Cir. 2007). · cites it 5× “Sifton, Judge), alleging that Chase’s collection of an unearned “post-closing fee” in connection with its refinancing of her home mortgage violated Section 8(b) of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. § 2607 (b), and New York General Business…”

PHH Corp. v. Consum. Fin. Prot. Bureau, 881 F.3d 75 (D.C. Cir. 2018). · cites it 4× “” 12 U.S.C. § 2607 (c). In this case, the CFPB Director interpreted those provisions of RESPA as applied to PHH’s mortgage insurance and reinsurance transactions.”

Marx v. Gen. Revenue Corp., 133 S. Ct. 1166 (2013). · cites it 3× “, 12 U. S. C. §2607 (d)(5). Finally, the canon is strongest when an interpretation would render superfluous another part of the same statutory scheme.”

Freeman v. Quicken Loans, Inc., 626 F.3d 799 (5th Cir. 2010). · cites it 10× “JONES, Chief Judge: This appeal concerns whether section 8(b) of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607 (b), prohibits lenders and others from charging "unearned, undivided" fees to borrowers at the closing of a mortgage transaction.”

Erick Carter v. Welles-Bowen Realty, Inc., 736 F.3d 722 (6th Cir. 2013). · cites it 8× “12 U.S.C. § 2607 (a). Exempted from this prohibition are “affiliated business arrangements.”

Bettina J. Schuetz v. Banc One Mortg. Corp., 292 F.3d 1004 (9th Cir. 2002). · cites it 6× “RESPA, § 8(a),- (c)(2); 12 U.S.C. § 2607 (a), (c)(2). Bettina J. Scheutz obtained a federally related mortgage loan from Banc One Mortgage Corporation through a mortgage broker, Home Mortgage Financial Corporation.”

David Merritt v. Countrywide Fin. Corporat, 759 F.3d 1023 (9th Cir. 2014). · cites it 8× “12 U.S.C. § 2607 . Civil actions under this section must be brought within one year of the alleged violation.”

Show all 514 citing cases →

— 12 U.S.C. § 2607(a) — 5 cases

John Robert Culpepper v. Inland Mortg. Corp, 491 F.3d 1260 (11th Cir. 2007).

United States v. Graham Mortg. Corp., Richard E. Chapin, Thomas P. Heinz, 740 F.2d 414 (6th Cir. 1984).

Bamba v. Resource Bank, 568 F. Supp. 2d 32 (D.D.C. 2008).

Brasko v. First Nat'l Bank of Pennsylvania (D. Maryland 2022).

New Jersey Title Ins. Co. v. Cecere (D.N.J. 2020).

— 12 U.S.C. § 2607(b) — 2 cases

Krupa v. Landsafe, Inc., 514 F.3d 1153 (11th Cir. 2008).

Moyer v. Mr. Cooper Grp., Inc. (D. Maryland 2023).

— 12 U.S.C. § 2607(c) — 1 case

Moore v. Radian Grp., Inc., 233 F. Supp. 2d 819 (E.D. Tex. 2002).

— 12 U.S.C. § 2607(d)(2) — 1 case

Good v. Deutsche Bank Nat'l Trust Co., 98 So. 3d 1255 (Fla. 4th DCA 2012).

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