Section 8 of the Real Estate Settlement Procedures Act (RESPA) prohibits unearned fees and kickbacks. Prior to July 2011, the Department of Housing and Urban Development (HUD) had primary responsibility for enforcement of RESPA.
The Consumer Financial Protection Bureau (CFPB) assumed control of RESPA, including Section 8, in July 2011. Initially the CFPB was not active in Section 8 enforcement. Since 2013, the CFPB has become a very active but unpredictable enforcer.
The penalties under CFPB enforcement actions range from a few thousand dollars to many millions of dollars. Failure to comply with Section 8 can also lead to jail terms.
The CFPB has provided minimal guidance on Section 8, and that guidance is less than enlightening. Most of the CFPB guidance has been in the form of consent decrees.
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