What law prohibits the payment for referral services between settlement service providers?

The Real Estate Settlement Procedures Act (RESPA) specifically prohibits the payment for referral services between settlement service providers. This legislation aims to protect consumers from unnecessary costs and to ensure transparency in the real estate settlement process. By prohibiting such payments, RESPA prevents conflicts of interest and helps to ensure that consumers receive fair treatment and a clear understanding of the costs associated with their mortgage and closing services. This is crucial for maintaining integrity within the real estate market and providing consumers with accurate information to make informed decisions.

Other laws mentioned, such as the Truth in Lending Act (TILA), primarily focus on ensuring that borrowers receive clear information regarding the cost of credit and the terms of mortgages but do not address referral fees. The Dodd-Frank Act introduced significant reforms in the financial sector but does not specifically target the payment of referral services in the same way as RESPA. Meanwhile, the Housing and Economic Recovery Act (HERA) introduced measures primarily aimed at stabilizing the housing market and addressing issues related to foreclosure and housing finance but does not encompass the specific prohibitions regarding referral payments that RESPA outlines.