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48 Cards in this Set
- Front
- Back
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What does RESPA stand for |
Real Estate Settlement Procedures Act |
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What regulation is RESPA? |
Regulation X |
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what are the sections RESPA covers? |
Section 6 Section 8 Section 9 Section 10 |
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When did RESPA become effective? |
June 20, 1975 |
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Who promulgated (put into effect) Regulation X? |
Department of Housing and Urban Development (HUD) |
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Who is Regulation X enforced and interpreted by? |
Consumer Financial Protection Bureau (CFPB) |
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What is the purpose of RESPA? |
Help consumers become better shoppers for settlement services and to eliminate unnecessary increase in the costs of certain settlement services due to kickbacks and referral fees |
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What is section 6 of RESPA |
Provides borrowers with important protections relating to servicing of their loans |
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How many days do homeowners need to be given notice that there was a change in loan services? |
15-days prior and post notice |
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How long is the grace period for borrowers to make payments to their new servicer? |
60 days |
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What regulation says there needs to be 15-days prior and post notice on a change in loan services? |
Regulation X section 6 |
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What is a settlement service |
Any service provided in connection with a prospective or actual settlement |
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What service providers are NOT regulated by RESPA or subject to its rules? |
Building/remodeling contractors Service and repair contractors Moving companies Landscaping companies Home Improvement or design companies |
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RESPAS rules apply to what? |
Any federally-related mortgage loan (including refinancing) secured by a first subordinate lien on a residential real property located within a State upon which is constructed or will be constructed a one-to-four families structure (including condos, co-ops and manufactured homes. |
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What do RESPAS rules and regulations apply to in terms of transactions? |
Conventional loans FHA,VA, and other gov-sponsored loans Purchase loans Reverse mortgages Assumptions Refinances Property improvement loans Equity lines of credit |
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What service providers does RESPA include in the settlement services |
Origination of a federally-related mortgage loan Services by a mortgage broker Any services related to the origination, processing, or funding of a federally-related mortgage loan Title services |
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What is a Mortgage servicer |
Company that collects monthly mortgage payments, pays taxes, insurance, and other items as they come due, and notifies the borrower of late payments. |
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What is section 8 of RESPA? |
Kickbacks, Fee-Splitting, and unearned Fees |
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What does section 8 of Regulation X prohibit in terms of kickbacks? |
Giving or accepting a fee, kickback, or anything of value in exchange for referrals of settlement service business involving a federally-related mortgage loan |
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What is a referral? |
Any oral or written action directed to a person, which has the effect of affirmatively influencing the selection by any person of a provider of a settlement service or business |
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What does section 8 of regulation X prohibit in terms of fee-splitting? |
No fee-splitting and receiving unearned fees or a percentage of any charge made or received for services not actually preformed |
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When can there be a required use of specific service providers? |
Where the lender refers a borrower to an attorney, credit reporting agency, or real estate appraiser to represent the lenders interest in the transaction |
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What are the violations for breaking RESPA rules? (Criminal and civil penalties) |
Fines up to $10,000 Imprisonment up to one year Livability up to three times the amount of the charge paid for the service (civil lawsuit) |
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Can a referring party accept anything of value from a settlement service provider? |
They can not accept anything of value in exchange for referrals of settlement business |
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What are Affiliated business arrangements? |
Situation where a person in a position to refer settlement services, or associate of that person, has either an affiliate relationship with or a direct beneficial ownership interest of more than 1% in the provider of settlement services and who then refers business to that provider or in some way influences the selection of that provider |
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What does RESPA section 9 prohibitv |
Prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of the sale unless the seller pays for the title insurance and all other title-related fees |
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How much can a buyer sue a seller who violates section 9 of RESPA? |
Three times all the charges made for the title insurance |
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What does section 10 of RESPA do? |
Sets limits on the amounts a lender may require a borrower to put into an escrow account |
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What is an escrow account? |
Holds money that some mortgage lenders collect every month along with a mortgage payment |
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What loan programs require escrow accounts? |
Mortgage loan that includes mortgage insurance (usually does) All gov-insured or guaranteed loans Loan that meats TILA detention of a “higher-priced” loan (for at least 60 months) Lenders required to collect monthly escrow payments for other mortgage loans for at least 5 years of the mortgage |
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How much can the lender require a borrower to pay into the escrow account each month? |
1/12th of the total of all disbursements payable that year. (Plus amount necessary to lay for any shortage in the account) |
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What is the cushion the lender may ask for a borrower to pay into an escrow account |
1/6th of the total disbursements for the year (two months worth) |
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How often must a lender perform an escrow account analysis? |
Once during the year |
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If there is any excess of _____ or more in the escrow account must be returned to the borrower |
$50 |
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What documents do RESPA and TILA prohibit from being charged to the borrower? |
Loan Estimate Closing discourse Annual escrow account statements |
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When must required disclosures regarding settlement services be provided? |
At the time of loan app Before settlement At settlement After settlement |
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What disclosures must be provided at or within 3 business days of application? |
Special info booklet Home Loan Toolkit Loan Estimate Good Faith Estimate (GFE) Truth in Lending Disclosure (TILA) List of HUD-Approved Home Counselors (RESPA) Affiliated Business Arrangement (AFBA) disclosure |
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What disclosure must be provided BEFORE SETTLEMENT? |
AFBA disclosure (at or before the time of referral) Closing Disclosure: 3 days prior to consummation HUD-1 Settlement Statement |
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What disclosures are required AT SETTLEMENT under RESPA? |
Finalized Closing Disclosure HUD-1 Settlement Statement Final Truth in Lending Disclosure (Final TILA) Initial Escrow Statement- (within 45 days of closing) |
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What is required AFTER SETTLEMENT? |
Annual Escrow Statement Servicing Transfer Statement |
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What does TRID stand for? |
TILA-RESPA Integrated Disclosure Rule |
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What fee can the MLO charge before the LE disclosure and/or required initial disclosures are delivered to the borrower? |
Actual cost of obtaining a credit report |
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Escrow Closing Notice must be provided by the creditor |
Prior to canceling an escrow account |
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Escrow Closing Notice must be provided by the creditor |
Prior to canceling an escrow account |
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Servicer must ensure the borrower receives the Escrow Closing Notice no later than… |
Three business days before the consumers escrow/impound account is closed |
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Escrow Closing Notice must be provided by the creditor |
Prior to canceling an escrow account |
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Servicer must ensure the borrower receives the Escrow Closing Notice no later than… |
Three business days before the consumers escrow/impound account is closed |
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If the escrow account is closed for any other reason, the creditor is required to provide a notice within…. |
30 business days of canceling the consumers escrow account |
