The main U.S. law that prohibits kickbacks and referral fees in real estate and mortgage transactions is the Real Estate Settlement Procedures Act (RESPA), specifically 12 U.S.C. § 2607 and its implementing regulation at 12 C.F.R. § 1024.14.

Core rule in plain language

  • RESPA makes it illegal for anyone to give or receive any fee, kickback, or “thing of value” in exchange for the referral of business related to a real estate settlement service involving a federally related mortgage loan.
  • A “referral” itself is not a compensable service , meaning you cannot get paid just for steering someone to a particular lender, title company, or other settlement service provider.

What counts as a prohibited kickback?

Under RESPA and its regulation:

  • Any payment, discount, credit, or other benefit tied to an agreement (even informal or oral) that certain settlement business will be referred is banned.
  • “Thing of value” is defined very broadly and can include money, gifts, special discounts, free services, or participation in a profit-making program.

Where this law applies

  • It applies to settlement services for federally related mortgage loans , which typically includes most consumer home purchase, refinance, and home-equity loans involving a lender or investor regulated or insured at the federal level.
  • Commonly affected players include real estate brokers, mortgage lenders, title companies, escrow companies, and others involved in closing the transaction.

Related anti‑kickback laws (other contexts)

While your question is most often answered with “RESPA ,” there are other major U.S. anti‑kickback statutes in different industries:

  • Federal Anti‑Kickback Statute : A criminal law that prohibits offering or receiving anything of value to induce referrals for services reimbursed by federal healthcare programs like Medicare and Medicaid.
  • Stark Law : A civil law restricting physician self‑referrals for certain designated health services paid by Medicare or Medicaid.

These are separate from RESPA but follow the same core idea: no pay‑to‑play for referrals.

TL;DR: In the real estate and mortgage world, the law that prohibits kickbacks and referral fees is RESPA § 8 (12 U.S.C. § 2607) and its regulation at 12 C.F.R. § 1024.14 , which broadly bans giving or receiving anything of value for the referral of settlement service business on federally related mortgage loans.