Respa

Front 1

RESPA

Back 1

Real Estate Settlement Procedures Act

Front 2

RESPA is Reg?

Back 2

X

Front 3

Real Estate Settlement Procedures Act passed in what year?

Back 3

1974

Front 4

RESPA has two main goals?

Back 4

1. Provide borrowers with information about closing cost and

2. To eliminate kickbacks and referral fees that unnecessarily increase Settlement costs.

Front 5

RESPA is divided into two groupings ?

Back 5

1. One section manages disclosures and servicing requirements for transactions involving a "federally related residential loan".

2. The second set prohibits the payment or receipts or fees from the BORROWER that were not actually earned. Fee splitting or referral fees are prohibited for anyone, not just the borrower.

Front 6

RESPA insures that the consumer receives certain disclosures in a timely manner. Disclosers should?

Back 6

1. Detail the costs associated with each loan transaction.

2. Provide information on lender servicing and escrow account practices, and

3. Describe business relationships between Settlement providers.

Front 7

RESPA involves?

Back 7

One to four family residential property.

Front 8

RESPA: Included in this grouping is

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1. Purchase loans

2. Assumptions

3. Refinances

4. Property improvement loans

5. Equity lines of credit

6. Reverse mortgages

Front 9

RESPA applies to "federally related" loan transactions if?

Back 9

1. It is secured by a mortgage or deed of trust against

*property with (or $ will be used to build) dwelling of four units or less;

*condominium unit or cooperative apartment; or

*lot with mobile home; AND

2. Lender is federally regulated has federally insured accounts, is assisted by federal government, makes loans in connection with federal program, sells loans to Fannie Mae, Ginnie Mae, or Freddie Mac, or makes real estate loans that total more than $1,000,000 per year

Front 10

RESPA EXEMPTIONS doesn't apply to loans that?

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1. To purchase 26 acres more or less primarily for business, commercial, or agricultural purpose.

2. To purchase vacant land "unless" within 2 yars from the date of Settlement of the loan, a structure or a manufactured home will be constructed or placed on the real property using the loan proceeds.

3. Temporary financing (construction loan)

4. Assumption w/o lender approval.

Front 11

RESPA has certain requirements for federally related loan transactions which are

Back 11

1.Lender must give applicants within 3 business days of application:

* booklet about Settlement Procedures

* good faith estimate

* mortgage servicing disclosure statement

2. Closing agent must itemize loan Settlement charges on Uniform Settlement Statement form

3. If borrower required to make deposits into impound account, lender can't require excessive deposits

Front 12

True or False

RESPA has 2 main goals: to provide borrowers with information about closing cost and to eliminate kickbacks and referral fees.

Back 12

TRUE

Front 13

RESPA Exemptions:

Lender or provider of Settlement services may not

Back 13

* pay kickbacks or referral fees

*accept unearned fees

* charge a document preparation fee

*property seller may not require buyer to use a particular title company

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RESPA------ Definitions

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Origination service means any service involved in the creation of a mortgage loan, including but not limited to the taking of the loan application, loan processing, and the underwriting and funding of the loan, and the processing and administrative services required to perform these functions.

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RESPA---Definitions

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Mortgage broker: means a person ( not an employee of a lender) or entity that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan, including such a person or entity that closes the loan in its own name in a table funded transaction. A loan correspondent approved under 24 CFR 202.8 for Federal Housing Administration programs is a mortgage broker for purposes of this part

Front 16

RESPA--Definitions

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Loan Originator: means a lender or mortgage broker.

Third party: means a Settlement service provider other than a loan originator.

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RESPA--Definitions

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Title service means any service involved in the provision of title insurance (lenders or owners policy), including but not limited to: title examination and evaluation; preparation and issuance of title insurance policy or policies; and the processing and administrative services required to perform these functions. The term also includes the service of conducting a Settlement.

Front 18

RESPA--Disclosures required at Loan Application

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*HUD'S Settlement Cost Booklet

* Must be used with GFE and HUD-1

* The Secretary of (HUD) prepares and distributes these special information booklets

* The booklet enables the consumer to better understand the purpose and expenses involved in a real estate transaction

* Purchase transactions only

"The Secretary of HUD shall prescribe the form used for the booklet

Front 19

Respa--Question : the purpose of HUD'S Settlement Cost Booklet is to?

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Help consumers understand the purpose and cost involved in a real estate transaction

Front 20

RESPA-- Disclosures Required at Loan Application

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*The Special Information Booklet goes on to explain:

**The nature and purpose of escrow accounts

**Choices available when selecting persons to provide necessary services

**An explanation of the unfair practices and unreasonable or unnecessary charges to be avoided by the consumer

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Respa--Disclosures Required at loan Application

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**The HUD Special Information Booklet should be delivered or placed in the mail to the borrower

***Not later than three business days after the application is rec'd or prepared

***Two or more persons apply, only one person needs to be given booklet

***If mortgage broker is used,they may deliver booklet

***Intent is to ensure booklet is rec'd at earliest possible date

Front 22

RESPA-- Disclosures Required at Loan Application

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The HUD Special Information Booklet dies not need to be provided for

***Refinancing transactions

***Closed end loans with subordinate lien

***Reverse mortgages

***Any federally related Mortgage whose purpose is not to purchase a 1-4 family residential property

Front 23

RESPA is codied at Title 12 of the United States Code, and Title 12 (12 CFR) falls under the Code of Federal Regulations Banks and Banking.

Back 23

In this Section 12 CFR 1024 refers to the real Estate Settlement Procedures Act (RESPA) Reg X