Which statement about RESPA kickbacks is correct?

• A. Kickbacks are allowed with disclosure.
• B. Kickbacks are prohibited.
• C. Kickbacks must be paid to the buyer's lender.
• D. Kickbacks are allowed if the seller pays a fee.

Answer: (B)

Kickbacks violate RESPA because the law prohibits paying or receiving any fee, kickback, or thing of value for referrals of settlement services. This rule is meant to prevent steering and to keep settlement costs fair and transparent for consumers. Disclosure does not make a kickback legal, so the idea that kickbacks are allowed with disclosure is incorrect. Likewise, paying a kickback to the buyer’s lender or having the seller pay a fee to justify a kickback misstates how RESPA treats referral compensation. There is a limited safe harbor for affiliated business arrangements, but that involves specific disclosures and consumer understanding, and it’s distinct from a simple kickback. Therefore, kickbacks are prohibited.