Violations of Section 8, which prohibits kickbacks, referrals, and fee splitting, are subject to RESPA’s most severe penalties including fines of up to $10,000 and one year in prison.

Section 6 of RESPA addresses loan servicing and allows consumers to file individual or class actions against loan servicers for RESPA violations.  In individual actions, loan servicers may be liable for damages.  If a pattern or practice of noncompliance with the servicing requirements of RESPA exists, the loan servicer can be liable for additional penalties of up to $1,000.  In class actions, damages may not exceed $1,000 for each member of the class and total damages may not exceed $500,000 or 1 % of the net worth of the servicer.

Failure to submit an initial or annual escrow statement in compliance with Section 10 of Regulation X can result in a civil penalty of $75, with a limitation of $130,000 on the penalty imposed on one servicer for violations occurring within a consecutive 12-month period.  However, if a loan servicer intentionally disregards the requirements of Section 10, penalties are $110 for each violation, with no limit on the total amount of the penalty.

Penalties for originators seem severe while those for servicers are much less.