Which of the following acts is prohibited under RESPA?

The correct answer is the prohibition of paying kickbacks under the Real Estate Settlement Procedures Act (RESPA). RESPA was established to promote transparency in the real estate settlement process and to eliminate abusive practices associated with real estate transactions.

Paying kickbacks refers to the illegal practice where one party compensates another for directing business to them, which can distort the pricing of services and interfere with the consumer's ability to make informed choices. RESPA makes it clear that any such payment or fee for the referral of settlement service business is prohibited, as it can lead to increased costs for consumers and a lack of competition among service providers.

In contrast, offering discounts to first-time buyers, providing free home inspections, and advertising open houses are generally allowed practices under RESPA, as they do not involve the direct exchange of payments for referrals and can benefit consumers by providing them with valuable services or information. Each of these options can enhance the buying experience and provide potential buyers with added incentives without violating federal regulations.