RESPA arrangement definition
Answer by Mary Beth Guard, BOL Guru Guru BIOS
Question: Where can I find a definition for an affiliated
business arrangement in a RESPA transaction?
Answer: The term affiliated business arrangement is
defined in RESPA at 12 USC 2602(7) as follows:
(7) the term "affiliated business arrangement" means an arrangement in which
(A) a person who is in a position to refer business incident to or a part of a real estate settlement service
involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship
with or a direct or beneficial ownership interest of more than 1 percent in a provider of settlement services;
and
(B) either of such persons directly or indirectly refers such business to that provider or affirmatively influences
the selection of that provider; Since the definition of gassociateh is also important to an understanding of affiliated business arrangements, I have also included the definition of the term "associate" from 12 USC 2602(8):
(8) the term "associate" means one who has one or more of the following relationships with a person in a
position to refer settlement business:
(A) a spouse, parent, or child of such person;
(B) a corporation or business entity that controls, is controlled by, or is under common control with such person;
(C) an employer, officer, director, partner, franchisor, or franchisee of such person; or
(D) anyone who has an agreement, arrangement, or understanding, with such person, the purpose or substantial effect of which is to enable the person in a position to refer settlement business to benefit financially from the referrals of such business.
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