HUD recently clarified its rule that rebates are permissible under RESPA as long as they are reported on the HUD-1 form. HUD explains that rebates are permitted by RESPA .

RESPA stands for the Real Estate Settlement Services Procedures Act. RESPA is about closing costs and settlement procedures. RESPA requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by HUD.

Pursuant to RESPA Section 8, "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." This means that any Flat Fee MLS Home Selling Broker who refers business to a settlement service provider, such as a mortgage broker or title insurance company, in return for something of value, as defined by HUD, could potentially be in violation of RESPA Section 8 and therefore subject to treble damages.

RESPA's purpose is twofold:

• to provide consumers with information about the real estate mortgage transaction and the costs associated with it
• to prohibit certain practices, such as referral fees between settlement service providers, that result in higher costs and reduced quality to consumers

  	2601 Congressional Findings and Purpose
  	2602 Definitions
  	2603 Uniform Settlement Statement
  	2604 Special Information Booklets
  	2605 Servicing of Mortgage Loans and Admn. of Escrow Accounts
  	2606 Exempted Transactions
  	2607 Prohibition against Kickbacks and Unearned Fees
  	2608 Title Companies
  	2609 Escrow Accounts
  	2610 Prohibition of Fees for Preparation of Truth-in-Lending, Uniform Settlement, and Escrow Account Statements
  	2611 to 2613 Repealed
  	2614 Jurisdiction of Courts and Limitations
  	2615 Validity of Contracts and Liens
  	2616 State laws unaffected; inconsistent Federal and State provisions
  	2617 Authority of the Secretary
  	Amendment Amends various sections of the Statute.