Compliance · federalRESPA Section 8 for transaction coordinators
RESPA Section 8 forbids giving or accepting anything of value for referring settlement service business on a federally related mortgage loan, and forbids splitting a settlement charge unless services are actually performed. For a TC the practical rule is simple: be paid for work you actually do, at a price that matches its value – never for steering clients to a title company, lender or other provider.
What Section 8 prohibits
No referral fees
No person may give or accept any fee, kickback or other thing of value under an agreement or understanding that settlement service business will be referred. A referral is not a compensable service.
No unearned fee splits
No portion, split or percentage of a settlement charge except for services actually performed. A charge for no or nominal services, or a duplicative fee, is an unearned fee.
Thing of value
Broadly defined: money, discounts, salaries, commissions, services at special or free rates, trips, payment of another person's expenses, the opportunity to take part in a money-making program and more.
Agreement can be unspoken
An agreement to refer need not be written or said – a pattern of conduct can establish it, especially when a payment is tied to the volume or value of business referred.
What Section 8 permits
Pay for actual services
A bona fide salary or payment for goods, facilities or services actually performed – but any amount above the market value of what was provided is treated as not for services.
Brokerage splits
Cooperative brokerage and referral arrangements between real estate agents and brokers acting in a brokerage capacity.
Promotion and education
Normal promotional and educational activities that are not conditioned on referrals and do not pay expenses the referrer would otherwise bear.
Employer to employee
An employer's payments to its own employees for referral activities.
Practical rules for a TC
- Bill for the coordination work you perform, under a written agreement with the agent or client.
- Be wary of “free TC services” paid by a title company, lender or other provider to agents who send it business.
- Do not accept gifts, credits or marketing money tied to which provider a client chooses.
- Keep a record of the services actually performed on each file.
- When in doubt, ask a RESPA attorney before agreeing to any payment from a settlement provider.
Penalties
A violation can bring a fine of up to $10,000, imprisonment of up to one year, or both, and civil liability of three times the amount of the charge paid for the settlement service (12 U.S.C. 2607(d)). The CFPB, HUD and state officials can sue to stop violations.
Questions about RESPA and transaction coordinators
Can a title company pay a transaction coordinator?
A payment is allowed only for services actually performed for the title company at their market value; a payment for referring business, or for nominal or duplicated work, violates Section 8.
Is a TC a settlement service provider under RESPA?
It depends on the services; but Section 8 applies to any person who gives or accepts a thing of value for referrals of settlement service business, so it matters to TCs either way.
What counts as a thing of value under RESPA?
Almost anything: money, discounts, services at special or free rates, trips, paying someone's expenses, or the opportunity to join a money-making program.
What is the penalty for a RESPA Section 8 violation?
Up to $10,000 in fines, up to one year in prison, or both, plus liability for three times the settlement charge.
Are referral fees between real estate agents allowed?
Yes, Section 8 permits cooperative brokerage and referral arrangements between real estate agents and brokers acting in a brokerage capacity.
Related guides
Each completed task in ClosingCode records who did it and when – a dated record of the work actually performed on every file.
Start free trialSources: 12 CFR 1024.14 (eCFR, read October 24, 2026); 12 U.S.C. 2607(d).
General information, not legal advice. Whether a payment is allowed depends on the facts – ask a RESPA attorney. ClosingCode is software; it is not a law firm, brokerage or settlement provider.