RESPA and Realtor Co-Marketing: What a Loan Officer Can Pay For

Almost every loan officer has heard that RESPA allows gifts up to twenty five dollars. It does not, and the rule they are thinking of does not exist. The actual test has nothing to do with how much something costs and everything to do with what you received in return for it, which is why arrangements that feel modest can be violations and arrangements that involve real money can be fine. This page sets out what Section 8 prohibits, the one exception that matters, and how co-marketing with real estate agents has actually been attacked.

Written for US loan officers and mortgage brokers, current as of September 2026. It is general information about an area where the facts of a particular arrangement decide the answer, not legal advice, and your own compliance team or counsel is the right place to take a specific structure.

Why you and the agent are in the same net

Regulation X defines a settlement service as any service provided in connection with a prospective or actual settlement, and the list of categories includes both loan origination and real estate agent or broker services. So when a loan officer and an agent arrange anything of value between themselves, both sides of the arrangement are settlement service providers, and the whole of Section 8 is in play. That is the structural fact everything else rests on.

Section 8(a) prohibits giving or accepting any fee, kickback or thing of value pursuant to an agreement or understanding that business incident to a real estate settlement service involving a federally related mortgage loan will be referred to any person. Section 8(b) separately prohibits splitting a charge for a settlement service other than for services actually performed.

Three definitions do most of the work, and each one is broader than people expect.

Thing of value

Regulation X defines this openly and gives examples that run well past cash: monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits and franchise royalties. The CFPB's own commentary adds services of all types at special or free rates, trips and the payment of another person's expenses, and lease or rental payments based in whole or in part on the amount of business referred. Paying for something the other party would otherwise have paid for is a thing of value, and so is giving them something for free that ordinarily costs money.

Referral

Any oral or written action directed to a person which has the effect of affirmatively influencing that person's selection of a settlement service provider. Note that it does not require the word recommend, and it does not require the consumer to have been compelled. Influence is enough.

Agreement or understanding

This is the one that defeats the defense people reach for first. Regulation X provides that an agreement or understanding need not be written or verbalized, and may be established by a practice, pattern or course of conduct. Nobody has to have said anything. A pattern of payments flowing one way and business flowing the other is capable of establishing the agreement on its own.

There is also a provision closing off the argument that nobody was harmed. The fact that the transfer of the thing of value does not increase any charge made by the person giving it is stated to be irrelevant to whether the act is prohibited. The consumer paying no more than they otherwise would is not a defense.

There is no twenty five dollar rule

The CFPB addressed this directly in its 2020 RESPA Section 8 FAQs, and the sentence is worth having in front of you: there is no exception to RESPA Section 8 solely based on the value of the gift or promotion. Neither the statute nor Regulation X contains a dollar threshold of any kind. The belief that one exists appears to be a piece of industry folklore that has been passed along for so long that it now gets taught as though it were the rule.

What does exist is an exception for normal promotional and educational activities, and it is conditioned on conduct rather than on amount. The activity must not be conditioned on referrals, and it must not defray an expense the referral source would otherwise have incurred. Broad distribution helps: something offered to the general public, or to all agents rather than to a hand picked few, sits much more comfortably than something aimed at your top three referrers.

Applied, that means a five dollar coffee card given because somebody sent you a deal is a thing of value given for a referral, and the amount does not save it. A seminar open to the public, or a continuing education class offered to every agent in the market at fair market value, can be fine. Paying an agent's mandatory continuing education, licensing or certification costs is the clearest failure of the second condition, because those are expenses they would have borne anyway.

The exception that actually matters

Section 8(c)(2) permits a payment for goods or facilities actually furnished, or for services actually performed. This is the doorway through which every legitimate co-marketing, marketing services and space rental arrangement passes, and the two part test that grew up around it is simple to state.

First, were the goods or facilities actually furnished, or the services actually performed. Second, is the payment reasonably related to the value of what was furnished or performed. HUD's formulation, which is still the operative standard, was that payments must be commensurate with the amount normally charged for similar services, goods or facilities, which calls for careful consideration of fees paid in relation to price structures and practices in similar transactions and in similar markets.

Two refinements do a lot of work in practice. Where somebody performs more than one service, payment for the additional service must be for something actual, necessary and distinct from their primary service, and the CFPB has added that services cannot be nominal and payments cannot be duplicative. And critically, the value of the referral itself, meaning the value of any additional business you obtain through it, is expressly excluded from the fair market value assessment. You may not price the arrangement by what the relationship is worth to you.

The strongest authority in this direction is PHH v. CFPB. The panel decision held that Section 8(c)(2) permits an arrangement where the provider is paid no more than the reasonable value of the services provided, rejecting the Bureau's contrary reading, and the D.C. Circuit sitting en banc reinstated those RESPA holdings in January 2018. A genuine service, fairly priced, survives even where referrals also happen to flow.

Advertising versus endorsement

If you take one line from this page, take this one. You may pay for advertising. You may not pay for endorsement. Almost every co-marketing arrangement that has been attacked failed on that distinction rather than on price.

The CFPB's 2020 FAQs express the underlying test in terms of audience. A referral is directed to a person and affirmatively influences that person's selection of a provider. A marketing service, by contrast, is not directed to a person and is generally targeted at a wide audience, the example given being placing advertisements in widely circulated media. So the question to ask of any arrangement is who the material is aimed at. A flyer distributed to a neighbourhood is marketing. A named borrower being walked toward you by somebody you are paying is a referral, whatever the invoice says.

The FAQs contain no dedicated co-marketing guidance, which is itself worth knowing. There is no safe harbor written for this exact arrangement, so it is analyzed with the general tools above.

Co-marketing in practice: pro rata by prominence

The long standing position, repeated throughout industry compliance material, is that nothing in RESPA prevents joint advertising, but that each party must pay its proportionate share, allocated by the prominence each receives. Where the lender pays more than its share, the excess is a thing of value conferred on a referral source, and it is analyzed as an unearned fee.

Zillow's co-marketing program, whatever else may be said about it, was built around that principle. As described in the litigation, a lender paid a percentage of an agent's advertising cost and appeared on that agent's listings, with a single lender capped at half the agent's advertising cost before 2017 and up to five lenders collectively capped at ninety percent, and listing appearances rotated in proportion to each lender's share. Read that structure carefully, because the cap and the proportionality are the whole point of it.

Be careful about what happened next, because it is widely misreported. The CFPB opened an investigation into the program in 2017 and closed it in June 2018 saying it did not intend to take enforcement action, without ever explaining why, which is not the same thing as a ruling that the program was lawful. The court case that followed was a shareholder securities class action rather than a RESPA action, brought on the theory that Zillow had misled investors about the program. The court dismissed it in October 2018, reasoning in part that the lenders received advertising services in exchange for paying a portion of their agent's advertising costs, then allowed an amended complaint to proceed in 2019 on the basis that the shareholders had plausibly alleged the program did breach anti-kickback law. It settled in April 2023 for fifteen million dollars, on the securities claims, with no admission of wrongdoing. So nobody has ever ruled on whether the program complied with RESPA. What the episode does show is that this kind of arrangement can become very expensive through a door you were not watching.

Practical points that follow from all of this. Allocate by space and prominence rather than by an even split, because a fifty fifty split of a piece in which your logo appears once and the agent's face appears four times is not a pro rata share. Treat free platforms as still carrying real cost, because production and design time has value even where the placement does not. Never let compensation move with conversion or capture rate, since payment that scales with results produced is payment for results rather than for space. And look at the arrangement alongside everything else you have with the same counterparty, because stacking a co-marketing deal on top of a desk rental on top of a lead purchase was a large part of what sank Prospect Mortgage.

What regulators have actually attacked

The single most useful case to understand is the CFPB's January 2017 action against Prospect Mortgage, which carried a three and a half million dollar civil penalty. It is not the largest referral matter the Bureau has brought, since the 2015 Wells Fargo action carried a twenty four million dollar penalty alongside redress, but it is the one that describes the arrangements an ordinary loan officer would recognize. Four structures were attacked, and the brokers and a servicer involved paid a combined four hundred and ninety five thousand dollars alongside it.

The co-marketing structure is the one closest to what most loan officers do. Prospect subsidized portions of agents' advertisements on a third party listing website. In return the agents agreed to exclusively promote Prospect in all of their advertising on that site, and when a consumer ticked a box asking for financing information, Prospect received a copy of that consumer's details. The Bureau's conclusion was that the payments were actually payments for referrals. Two features did the damage: exclusivity, and automatic lead capture. Neither of those is advertising.

The desk license structure involved paying more than a hundred brokerages to place loan officers on site, while the brokers promised to promote Prospect as a preferred lender. The valuation problem was that the arrangements were assessed by reference to the referrals they produced rather than to market rent, and the promise of endorsement was the real consideration. Renting space is not the issue. Renting space with an endorsement attached is.

The lead structure involved paying more than two hundred counterparties per lead and encouraging them to steer consumers to Prospect, including requiring buyers to obtain a preapproval from a Prospect loan officer even where they were cash buyers or already approved elsewhere. Compensation was tied to preapproval counts. Buying data is permitted. Buying an endorsement dressed as data is not. Note also that RESPA governs what you may pay for a lead, while the TCPA governs what you may do once you have it, and both apply to the same purchase. The second half of that is covered in TCPA Rules for Calling and Texting Mortgage Leads.

The fourth structure is the one to hold onto if you have ever been offered a marketing services agreement. Prospect paid monthly marketing fees that were adjusted against its capture rate, meaning the share of that counterparty's business it actually won. Once a fee moves with results produced, it has stopped being payment for a service and become payment for the business, whatever the agreement calls it. This is the single most common way an otherwise reasonable MSA goes wrong.

The second case worth knowing is the CFPB's August 2023 action against Freedom Mortgage and Realty Connect USA Long Island, which produced penalties of one and three quarter million dollars and two hundred thousand dollars respectively. Roughly ninety thousand dollars a month was flowing to more than forty brokerages under marketing services agreements, with Realty Connect receiving six thousand dollars a month while failing to perform the contracted tasks. Alongside that sat free access to paid industry subscription services for more than two thousand agents, conditioned on pairing with a Freedom loan officer, and subsidized parties, catered events and tickets to sporting events and galas. The lesson is that an MSA is judged on what actually happened under it, not on how well the document was drafted.

There is a third case that ought to concentrate the mind of an individual originator. In the Genuine Title matters in 2015, the CFPB and the Maryland Attorney General went after loan officers personally. A title company had provided them with free marketing services, including data analysis and printed letters carrying their own contact details, and funneled cash through shell companies the loan officers controlled. The three loan officers were penalized thirty thousand, thirty seven and a half thousand and sixty five thousand dollars respectively, each with a two year industry ban. Two people on the title company side, its founder and its marketing director, were penalized one hundred and thirty thousand and four hundred thousand dollars with five year bans. Section 8 does not only reach companies, and the amounts are large relative to what an individual originator earns on the business the arrangement produced.

Digital platforms and lead routing

If your arrangement involves a shared website, a co-branded landing page, or anything where a consumer's click routes to a particular lender, the CFPB's February 2023 advisory opinion on digital mortgage comparison-shopping platforms is the governing document. Its test has three elements: the operator presents information about participating providers non-neutrally, that presentation has the effect of steering the consumer, and the operator receives something of value at least in part for that steering.

The practices it flags are worth reading against your own arrangement. Algorithmically boosting lenders who pay more. Prominent placement for payers while competitors are buried. Warm handoffs to the first lender to respond rather than the one that fits. Rotational rankings unrelated to consumer need. Exclusive lead delivery to the highest payer. The Bureau's phrase for all of it was putting a thumb on the scale.

What it costs

The civil exposure is unusual and people misread it. Section 8 provides that violators are jointly and severally liable to the person charged for the settlement service in an amount equal to three times the amount of any charge paid for that settlement service. Note the measure carefully: it is three times the charge for the settlement service, not three times the kickback, and not the consumer's actual loss. Costs and reasonable attorney's fees are available to a prevailing party.

There is a criminal provision as well, at up to ten thousand dollars and up to a year of imprisonment. It is rarely used, but it is there, which is a reason to treat this differently from an ordinary marketing question. It is also worth knowing what is not available. The bona fide error defense in Section 8 is confined to the affiliated business arrangement disclosure requirement. There is no general defense of having acted unintentionally while maintaining reasonable procedures, so good faith and good systems reduce the chance of a problem arising without excusing one that has.

Limitation periods are short on the private side. A private action under Section 8 must be brought within a year of the occurrence of the violation. Actions by the Bureau, the HUD Secretary, a state attorney general or a state insurance commissioner carry three years. The short private window is one reason claims of this shape are often pleaded under state consumer protection statutes, which usually run longer.

Does any of this still get enforced?

It is a fair question to be asking in 2026, and the honest answer has two halves.

Federal enforcement activity has fallen sharply. A GAO report released in January 2026 documented that the CFPB had planned, as of April 2025, to cut its workforce by eighty eight percent, including eighty percent of Enforcement and ninety percent of Supervision, and that supervisory examinations were closed or curtailed and some enforcement actions dismissed or resolved between February and August 2025. Its statutory funding cap was reduced in July 2025. No RESPA referral or kickback action appears on the Bureau's public enforcement list for 2025 or 2026, and the kickback case it had filed against Rocket Homes and a large agent group in December 2024 was voluntarily dismissed with prejudice in February 2025, without being decided on its merits.

The other half is that none of that changes the law. The CFPB said as much itself when it rescinded its marketing services agreement bulletin in 2020: RESPA is unchanged and remains in force and effect. Section 8 carries a private right of action, criminal penalties, and injunctive authority that belongs to state attorneys general and state insurance commissioners as well as to federal regulators, and none of that depends on the size of any agency.

The activity has moved rather than stopped, and some of it is not RESPA at all. The District of Columbia Attorney General recovered more than three million dollars across four title companies in August 2024 over arrangements that recruited agents with discounted ownership interests and profit sharing. That action was brought under the District's own consumer protection statute rather than RESPA, on the footing that District law is stricter and lacks the federal affiliated business arrangement exception, which is a reminder that satisfying RESPA does not finish the analysis in every state. The Maryland Attorney General then settled with a title insurer and its agent joint ventures in January 2026 for eight hundred and fifty thousand dollars in restitution plus two hundred thousand to the state, requiring the joint ventures to be dissolved. Private class actions have been filed in this space through 2026, including matters against large lenders and portals alleging steering, which are allegations rather than findings and remain to be tested. Nobody planning an arrangement they intend to run for years should be pricing in the assumption that nobody is looking.

What makes an arrangement defensible

The structures that hold up share a shape. There is a real service, described with particularity in a written agreement. Its price was set by reference to what that service costs in that market, established before the money started moving rather than reconstructed afterwards, ideally by an independent valuation using both market comparables and the cost of delivering the service. There is evidence the service was actually delivered, in the form of tear sheets, screenshots, distribution records or event material. The invoices describe the service rather than the outcome. And no part of the compensation moves with the volume of business that came back.

Two habits are worth building in beyond that. Look at everything you have with the same counterparty at once, because arrangements that are individually explicable can look very different stacked. And remember that the conduct is what gets examined, not the paperwork; a well drafted agreement describing services nobody performed is evidence against you rather than for you.

The analysis also shifts depending on who is on the other side. Where the counterparty is a title company, both of you are settlement service providers and joint ventures attract particular scrutiny, with affiliated business arrangements permitted only on proper written disclosure, no required use, and returns tied strictly to ownership percentage. Where the counterparty is a builder, incentives are often analyzed under the required use rules instead, because the benefit flows to the consumer rather than to a referral source, and Regulation X expressly provides that offering a package or a discount is not a required use so long as it is optional and the discount is a genuine one that is not made up elsewhere in the settlement.

None of this is an argument against working with agents, which is still one of the most reliable sources of business in this job. It is an argument for structuring the relationship so that it survives being looked at, and for not being so dependent on any single one of them that you cannot walk away from an arrangement you are uncomfortable with. On that second point, the Movie Ticket Method is a way to build a source of business that belongs to you rather than to somebody you are paying.

Common questions

Sources

The statute, the regulation and the consent orders are all public, and they are more readable than their reputation suggests. If an arrangement matters to you, the consent orders in particular are worth an hour, because they describe real structures in detail rather than in the abstract.

• 12 U.S.C. 2607, RESPA Section 8
• 12 CFR 1024.14, Regulation X on prohibited payments
• CFPB RESPA Section 8 FAQs, October 7, 2020
• CFPB rescission of Compliance Bulletin 2015-05 on marketing services agreements
• CFPB consent order, Prospect Mortgage LLC, January 31, 2017
• CFPB action against Freedom Mortgage and Realty Connect, August 17, 2023
• CFPB advisory opinion on digital mortgage comparison-shopping platforms, February 13, 2023
• CFPB and Maryland action on the Genuine Title pay-to-play scheme, April 29, 2015
• Regulation X Appendix B, illustrations of Section 8 in practice
• 12 U.S.C. 2614, limitation periods

This page is general information for loan officers and mortgage brokers, not legal advice, and it does not create any professional relationship. Section 8 questions turn heavily on the facts of a particular arrangement, and state law may add requirements on top. Take a specific structure to your compliance team or to counsel who works in this area before you sign anything.