Each card is a key concept. Read it. Internalize it. These are the building blocks of every RESPA scenario question.
FILE 001
Things of Value
Cash · Gift cards · Meals · Golf outings · Travel · Software · Below-market rent · Discounts · Business referrals back. All count. Any of them exchanged for a referral = Section 8 violation.
BROAD DEFINITION
⚡ EXAM NOTE
The one that surprises people: a business referral back is itself a thing of value. Two companies trading referrals with each other — no cash involved at all — still violates Section 8.
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FILE 002
ABA — 3 Requirements
Affiliated Business Arrangements are legal ONLY if: (1) Written disclosure at referral · (2) Consumer has genuine free choice · (3) Only return on ownership — no per-referral payments. Miss any one = violation.
ALL 3 REQUIRED
⚡ EXAM TRAP
The exam often gives you a scenario where the written disclosure IS provided but the borrower is steered or required to use the affiliated company. Written disclosure alone is not enough — all 3 must be met simultaneously.
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FILE 003
MSAs — The Gray Zone
Marketing Services Agreements are legal only if the payment reflects fair market value of actual services performed. Paying $800/month for 2 social media posts = disguised kickback. CFPB scrutinizes heavily.
CFPB FAVORITE
⚡ EXAM NOTE
The CFPB's test: Is the payment proportionate to the actual service provided? Inflated payments for minimal services = disguised referral fee. The label "marketing agreement" doesn't protect it.
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FILE 004
Section 9 — Title
Sellers cannot require buyers to use a specific title company as a condition of sale. Penalty = 3× the title insurance charge. Exam tip: seller dictates title company = Section 9.
3× PENALTY
⚡ EXAM NOTE
Section 9 is short but heavily tested. The penalty formula is 3× the title insurance CHARGE — not 3× the kickback or 3× the savings. If title insurance cost $600, penalty = $1,800.
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FILE 005
Section 10 — Escrow
Maximum escrow cushion = 2 months of projected payments. Annual analysis required. Surplus above 2 months must be refunded within 30 days.
2 MONTHS MAX
⚡ EXAM NOTE
Two numbers to know: 2 months (max cushion) and 30 days (refund deadline if surplus found). Annual analysis is required — lenders can't just hold excess indefinitely.
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FILE 006
Section 6 — QWR
Qualified Written Request from borrower to servicer. Acknowledge: 5 business days. Respond: 30 business days (extendable to 45 with notice). Failure = up to $2,000 damages per violation.
KEY DEADLINES
⚡ EXAM TRAP
These are BUSINESS days — not calendar days. The 30-day window can extend to 45 days only if the servicer sends written notice of the extension BEFORE the 30-day deadline passes. They can't extend after the deadline.
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FILE 007
Exempt — Employer→Employee
A company paying its own employees production bonuses is NOT a Section 8 violation. RESPA targets payments between different companies. Internal compensation = exempt.
EXAM TRAP
⚡ EXAM TRAP
The exam frames this as: "Lender pays MLO a $500 bonus for each closed loan." Sounds like a kickback — but it's exempt. The exemption applies only when it's the SAME company paying its OWN employee. Cross-company payments are never exempt.
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FILE 008
The Pattern Test
One dinner with an agent may be innocent. Eight dinners — each followed by referrals within days — is a kickback arrangement. The CFPB looks at patterns, not individual incidents.
PATTERN MATTERS
⚡ EXAM NOTE
The CFPB examines patterns across time. A single isolated dinner is hard to prove as a kickback. A consistent pattern of entertainment → referrals → entertainment → referrals is strong evidence of an arrangement. Frequency + timing = the tell.
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