What are the Definition of Terms Related to RESPA?
(Violations of Section 8 of RESPA)
* Settlement Services: Borrowers depend on a number of settlement service providers to prepare for closing. Third party services are provided by appraisers, inspectors, credit reporting agencies, title insurers, and loan processors.
* Things of Value: Any payment, advance loan, or service including money, discounts, commisions, salaries, stock, opportunities to participate in a money-making program, special banking terms, tickets to theater orsporting events, services at special rates, and trips at another's expense.
* Agreement or Understanding: A written or verbal agreement or even an agreement established through a practice, pattern, or course of conduct, to offer things of value in exchange for the referral of settlement business.
* Fee Splitting and Kickbacks: The sharing of fees among settlement service providers.
* Markups: A unilateral increase in the cost of a settlement service. HUD's policy on markups is that they violate Section 8.
* Affiliated Business Arrangement: An arragement in which one person refers loan applicants to a settlement service provider with whom the person has an affiliate relationship or ownership interest of more than 1%.
* Sham Affiliated Business Arrangement: A partnership or joint venture created between settlement service providers for the illegal purpose of splitting fees under the guise of a bona fide affiliated business arrangement.
* Yield Spread Premium (YSP): A fee paid to a loan originator by the lender for originating a loan at an interest rate higher than the par rate.