From my experience, almost every real estate professional has unwittingly violated the Real Estate Settlement Procedures Act (RESPA) at some point in their career. You probably want to know what constitutes a violation, which we will get to. First, I find it effective to explain the potential penalties, which include the following:
• Up to a $10,000 fine, or
• Imprisonment for up to one year, or both
• Treble (triple) damages for any actual damages (closing costs)
• Court costs, and reasonable attorneys fees
If that doesnt get your attention, you must value you money and freedom less than I do. In general RESPA applies to real estate professionals in two instances:
1. Prohibition of kickbacks and unearned fees [12 USC 2607]
2. Sellers requiring a specified title company [12 USC 2608]
The first one is pretty straight forward, you are not to "accept any fee, kickback or thing of value pursuant to any agreement or understanding" that is related to or part of a real estate settlement service involving a federally regulated mortgage loan. To put it plainly, you can not get referral fees from your friendly hometown closing company.

The second one, although not directly applicable to the real estate professional, is still important. As a fiduciary (trusted adviser), you have a duty to disclose what you know to your client. Dont let your sellers make the sale conditional on a certain title insurance company, or they will be opening themselves up to treble (triple) damages for the amount paid for the title insurance, and you will have one very unhappy client.

As you often hear, "certain exclusions may apply" which pertains to RESPA as well. There are certain real estate transactions and mortgages that are not covered by RESPA, but to be safe the $50 kickback is hardly worth the risk.