Is it a RESPA violation?
As a Closing Agent is it a violation to invite many different Realtors and/or Lenders for “drinks and Queso at “said restaurant” from 5-6?
RESPA regulates marketing and business relationships between settlement service providers. As part of that, RESPA prohibits real estate agents from receiving a “thing of value” for referring business to a settlement service provider, like a mortgage banker, mortgage broker, title company, or title agent.
According to the NAR (https://www.nar.realtor/ae/manage-your-association/association-policy/following-respa-rules), the following situations (that may be similar to yours) are prohibited under RESPA:
– A hazard insurance company hosts a “happy hour” and dinner outing for real estate agents.
– A title company hosts a monthly dinner and reception for real estate agents.
– A mortgage lender provides lunch at an open house, but does not distribute brochures or display any marketing materials.
However, note that the NAR provides the following as an example of permissible behavior under RESPA:
– A title agent pays for dinner for a real estate agent during which business is discussed, provided that such dinners are not a regular or expected occurrence.
For more information on RESPA violation examples and penalties, checkout our ultimate guide here: https://fitsmallbusiness.com/what-are-respa-violations/
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