RESPA Section 8 and lender referrals: what agents and brokers can and can't do

You can recommend a lender. You cannot be paid for it, in cash or in anything else of value.

This is general education, not legal advice. State law can add rules of its own. Sources checked 11/01/2026.

Agents get asked "who should I use for my mortgage?" all the time. Answering is fine. Getting something back for the answer is where trouble starts. Section 8 of the Real Estate Settlement Procedures Act (RESPA) is short, but the gray areas around gifts, shared ads, desk rent and lender lists are where most questions come from. Here is how it works for agents, brokers and the lenders they work with.

What Section 8 says

The statute, 12 U.S.C. 2607, has two core bans for settlement services on federally related mortgage loans, which covers most home loans:

• No kickbacks for referrals. No one may give or accept a fee, kickback or "thing of value" under an agreement to refer settlement business.
• No unearned fees. No one may split a settlement charge unless they actually performed a service for it.

The CFPB's rule, Regulation X section 1024.14, fills in the details. Three points matter most for agents:

What is allowed

• Referral fees between agents and brokers. Regulation X allows payments under cooperative brokerage and referral arrangements between real estate agents and brokers. Your state license law still controls who can receive them.
• Paying fair value for real work. Payment for goods, facilities or services actually provided is allowed if it matches market value. The value of any referrals cannot be counted in that price.
• Normal promotion and education. The CFPB's RESPA Section 8 FAQs say normal promotional and educational activities are fine if they are not tied to referrals and do not cover costs the referral source would otherwise pay. A free seminar open to all local agents is the kind of example given.
• Affiliated businesses, with conditions. A brokerage that owns part of a lender or title company can refer to it only if it gives a written disclosure, the consumer is free to choose someone else, and the only benefit is a return on ownership.

What is not allowed

Co-marketing and shared ads

Joint ads with a lender are not banned. The question is who pays for what. If each side pays its fair share, based on how much space and attention each gets, the ad is just shared marketing. If the lender pays more than its share, the difference is a thing of value going to the agent. Keep a short written record of how costs were split and why. Regulation X says a payment that bears no reasonable relationship to market value is treated as excess, and the excess can be evidence of a kickback.

Lender lists, portals and platforms

Many brokerages and apps show buyers a list of lenders. The CFPB looked at this in a 2023 advisory opinion on digital mortgage comparison platforms. In short:

• A platform that ranks or shows providers in a slanted way, such as paid lenders first, and gets paid for it, is likely taking illegal referral fees.
• Charging every lender the same fee does not cure slanted presentation on its own.
• A platform that uses and presents information neutrally is generally being paid for a real service.

In May 2025 the CFPB withdrew 67 guidance documents. This advisory opinion was not on that list, and neither were the Section 8 FAQs, but agency guidance can change. The lesson holds either way: neutral presentation and a free choice for the buyer matter as much as how the fee is set.

Penalties and who enforces

Section 8 carries criminal penalties: a fine of up to 10,000 dollars, up to one year in prison, or both. People who were charged for the service can sue for three times the amount of the charge. The CFPB, the Secretary of HUD and state attorneys general or insurance commissioners can bring actions to stop violations. Your state real estate commission can discipline a license on top of that.

What brokers should put in place

1. Write a short policy. No payments, gifts or perks from lenders, title or other providers tied to referrals.
2. List every provider relationship. Desk rent, sponsorships, shared ads and affiliated companies, each with its agreement.
3. Prove market value. Keep the rate comparison for any rent or service a provider pays for.
4. Train neutral language. "You can use any lender you like. Here is a list to compare, or keep your own."
5. Use the disclosures. Give the affiliated business disclosure every time it applies.
6. Get legal review. Have your own attorney review any lender agreement before it starts.

Questions

Can I accept a referral fee from a lender?

No. Taking money or anything else of value from a lender in exchange for sending them loans is what Section 8 bans.

Can I pay or receive a referral fee from another agent?

Yes, in general. Regulation X allows cooperative brokerage and referral arrangements between real estate agents and brokers. Your state license law decides who can be paid and how.

Can a lender buy lunch or sponsor an event?

Normal promotional and educational activity is allowed if it is not tied to referrals and does not pay costs you would otherwise cover. The facts matter, so keep it modest, open to many people and unrelated to how many loans you send.

Can a lender pay to be on our brokerage's preferred list?

Paying for placement that steers buyers is a referral fee risk. A flat fee for a neutral listing, where the buyer chooses freely, is a different setup, but have an attorney review it before you start.

Does Section 8 apply to cash purchases?

Section 8 covers settlement services on federally related mortgage loans. A true cash deal with no loan generally falls outside it, but state law and license rules still apply.