Final answer:
The Real Estate Settlement Procedures Act (RESPA) requires mortgage lenders to provide an estimate of closing costs to borrowers and forbids them from paying kickbacks for referrals.
Step-by-step explanation:
The law that requires mortgage lenders to provide an estimate of closing costs to a borrower and forbids them to pay kickbacks for referrals is the Real Estate Settlement Procedures Act (RESPA).
RESPA is a federal law that aims to protect consumers by providing them with information about the costs associated with getting a mortgage loan. Under RESPA, mortgage lenders are required to provide borrowers with a Loan Estimate, which includes an estimate of the closing costs.
Additionally, RESPA prohibits mortgage lenders from paying kickbacks or referral fees to other parties involved in the mortgage transaction, such as real estate agents or brokers. This helps to ensure that borrowers receive unbiased advice and are not influenced by any financial incentives.