According to RESPA, which practice is considered abusive and therefore prohibited?

Kickbacks are considered an abusive practice under the Real Estate Settlement Procedures Act (RESPA) and are explicitly prohibited. RESPA was enacted to promote transparency in the real estate transaction process and to protect consumers from misleading practices that can arise during the closing of real estate transactions.

Kickbacks, in this context, refer to the payment of an unearned fee or commission for the referral of settlement service business. For instance, if a real estate agent receives payment from a mortgage broker for referring clients, it can create a conflict of interest and can often lead to increased costs for consumers, undermining the transparency that RESPA aims to enforce. This prohibition against kickbacks is a central part of RESPA's framework to ensure that consumers are not financially exploited during real estate transactions.

The other options, such as temporary loans and refinance transactions, do not inherently involve abusive practices. Controlled business arrangements can be governed by specific requirements under RESPA, but it’s the kickbacks that directly violate RESPA’s intent to create a fair and honest real estate market.