Lender referral programs are bounded by RESPA Section 8 (12 U.S.C. §2607). The ten questions below cover the territory most private-lender compliance teams face when designing or reviewing a referral structure.

What does Section 8 actually prohibit?

§2607(a) prohibits giving or accepting any fee, kickback, or thing of value pursuant to an agreement that real estate settlement-service business will be referred. §2607(b) prohibits fee-splitting for any settlement service except for services actually performed. The two prongs together cover both compensation paid for referrals and unearned fees paid in the settlement process.

What does §2607(c)(2) actually permit?

The statute permits “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.” After PHH v. CFPB and the CFPB’s 2020 RESPA FAQ, this permission covers fair-market-value payments for services actually rendered, even between parties that also refer business to each other — as long as the payment is for the service, not the referral.

What is a marketing services agreement (MSA)?

An MSA is a written agreement under which one settlement-service provider pays another for marketing services — co-branded marketing materials, joint advertising, lead-generation campaigns. The MSA sits inside §2607(c)(2) when the payment compensates marketing services actually performed at fair market value, with deliverables documented and the agreement not structured to compensate referrals.

Can a lender pay a real estate agent for a referral?

No, when the payment is for the referral itself. Yes, when the payment compensates services actually performed by the agent — and the agent is licensed and authorized to perform those services. A real estate agent acting in the capacity of a settlement-service provider can be paid for that service; an agent acting only as a referral source cannot.

What is a captive reinsurance arrangement?

An arrangement in which mortgage insurers cede a portion of the premium on policies insuring loans originated by a particular lender to a reinsurer affiliated with that lender. PHH v. CFPB held that captive reinsurance can sit inside §2607(c)(2) when the reinsurance arrangement transfers real risk and the premium reflects fair market value for the risk assumed. The structure fails when the arrangement transfers no real risk or the premium exceeds fair market value for the risk.

Can a lender pay a broker a flat fee on each closed loan?

Yes, when the broker is a licensed mortgage broker performing origination services and the fee compensates services actually performed — origination, packaging, qualification, document collection. The fee should be disclosed on the Loan Estimate and Closing Disclosure for consumer-purpose loans. A flat fee per closed loan for origination services sits inside §2607(c)(2). A flat fee paid for a referral by a non-broker sits outside.

What is a desk-rental arrangement?

A settlement-service provider rents office space from another settlement-service provider at market rent. The arrangement sits inside §2607(c)(2) when the rent reflects fair market value for the space actually used, with no link to referral volume. The arrangement fails when the rent is inflated above market or varies with referrals coming the other direction.

What documentation should a referral structure carry?

A written agreement specifying services, deliverables, and payment terms. A documented fair-market-value analysis supporting the payment level. Time records, deliverable logs, or other evidence of services actually performed. A periodic review — quarterly or annually — confirming the arrangement continues to reflect actual services at fair market value. The discipline protects the structure if the CFPB or a state regulator ever opens an inquiry.

What is the statutory exposure for a Section 8 violation?

12 U.S.C. §2607(d)(1) imposes treble damages — three times the amount of any charge paid for a settlement service. §2607(d)(2) authorizes criminal penalties up to one year and a ten-thousand-dollar fine per violation. The CFPB and state attorneys general can also pursue civil enforcement actions with substantial disgorgement and penalty exposure. Consult qualified counsel on classification at design and at every material change.

Does state law add additional referral restrictions?

Many states have anti-kickback or referral-restriction statutes that parallel or exceed RESPA Section 8. California, New York, Texas, and many others maintain state-level frameworks. Some states regulate real estate referrals more tightly than the federal floor; others mirror RESPA. A national lender running a referral program should map the structure against every state where loans close, not only against federal RESPA.

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