What is a major prohibition under the RESPA?

The correct choice highlights a fundamental aspect of the Real Estate Settlement Procedures Act (RESPA), which is designed to promote transparency and eliminate unethical practices in the real estate settlement process. A major prohibition under RESPA is aimed at preventing referral fees and kickbacks among real estate professionals. This means that individuals involved in the transaction, such as lenders, agents, or settlement service providers, are not allowed to receive compensation for referring clients to one another, as this can create conflicts of interest and drive up costs for consumers. By banning referral fees and kickbacks, RESPA helps ensure that consumers receive fair treatment and clear information regarding the costs and services involved in their real estate transactions.

In the context of RESPA, the other options do touch upon important considerations related to lending and real estate transactions but do not encompass the core prohibitions established by RESPA as effectively. For instance, while charging higher than stated loan interest rates or delayed disclosure of loan costs can be problematic, they fall more under broader lending regulations rather than the specific prohibitions outlined by RESPA. Similarly, advertising kickbacks are not explicitly prohibited by RESPA, which focuses more on the financial transactions between parties involved rather than the marketing strategies they employ.