What is the penalty for violating RESPA?

The penalty for violating the Real Estate Settlement Procedures Act (RESPA) includes civil penalties of up to $10,000 and can extend to a prison term of up to one year. RESPA was enacted to protect consumers from abusive practices during the home buying process, particularly regarding settlement service costs and the provision of kickbacks or referral fees.

By imposing significant civil penalties and the possibility of imprisonment, RESPA ensures that compliance is taken seriously, and it reinforces the importance of ethical practices in the mortgage and real estate industries. This dual approach both deters potential violations and emphasizes the law's role in safeguarding consumer interests.

The other options suggest either lower penalties or no penalties at all, which does not reflect the serious consequences that can arise from violations of RESPA. The correct option underscores the responsibility of mortgage loan originators to adhere to regulatory standards to promote transparency and fairness in real estate transactions.