THE SELLER CANNOT FORCE YOU TO USE A SPECIFIC TITLE CO.

THE REAL ESTATE PROTECTION ACT "RESPA" PROHIBITS A SELLER FROM REQUIRING THE HOME BUYER TO USE A PARTICULAR TITLE INSURANCE COMPANY, EITHER DIRECTLY OR INDIRECTLY, AS A CONDITION OF SALE

RESPA
The Real Estate Settlement Procedures Act

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. One of its purposes is to help consumers become better shoppers for settlement services. Another purpose is to eliminate kickbacks and referral fees that increase unnecessarily the costs of certain settlement services.

Section 8: Kickbacks, Fee-Splitting, Unearned Fees

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or any thing of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.

Violations of Section 8's anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.

Section 9: Seller Required Title Insurance

Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.

FOR FURTHER INFORMATION GO TO: RESPA Home Page