Florida Broker Practice Exam

Kickbacks for what type of fees are prohibited under RESPA?

1. Earned fees for services rendered

2. Unearned fees associated with closing services

3. Fees below a certain threshold

4. Fees charged for administrative services

The correct answer is: Unearned fees associated with closing services

Under the Real Estate Settlement Procedures Act (RESPA), kickbacks for unearned fees associated with closing services are prohibited to ensure transparency and fairness in real estate transactions. The law aims to eliminate any potential conflicts of interest or undisclosed payments that could escalate closing costs for the consumer. Unearned fees are those that are not actually earned for services performed. Kickbacks relating to these fees can lead to higher costs for consumers, as they could raise closing costs through inflated pricing for services that were not legitimately provided. RESPA's regulations are designed to protect consumers by prohibiting these types of kickbacks, thereby promoting ethical practices in the real estate industry. Additionally, it’s important to understand that earned fees for services rendered are not prohibited, as they reflect legitimate compensation for actual work performed. Fees below a threshold or those charged for administrative services could also fall under acceptable practices, provided they are appropriately disclosed and earned. However, the specific prohibition on unearned fees under RESPA is key to preventing unlawful financial incentives that do not correlate with real services provided.