Federal Regulations Flashcards
What is the Real Estate Settlement and Procedures Act (RESPA)
is a consumer protection statute that helps consumers become better shoppers for settlement services and seeks to reduce unnecessarily high settlement costs by requiring disclosures to homebuyers and sellers and by prohibiting abusive practices in the real estate settlement process
RESPA outlaws
kickbacks, referral fees and unearned fees, prohibits sellers from requiring borrowers to purchase title insurance from specific companies and does not allow loan services to require excessively large escrow accounts
RESPA prohibits
fee splitting and receiving unearned fees for services not actually performed
Violations of Section 8’s anti-kickback, referral fees and unearned fees provisions of RESPA are
subject to criminal and civil penalties
A person who violates Section 8 may be fined up to
$10,000 and imprisoned up to one year
In a private law suit a person who violates Section 8 may be liable
to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service
Section 9 of RESPA prohibits
a seller from requiring the home buyer to use a title insurance company directly or indirectly as a condition of sale
Buyer can sue seller who violates the provision for amount equal to three times all charges made for the title insurance
The truth in lending RESPA integrated disclosure doesn’t apply to
HELOCs, reverse mortgages and mobile home loans
What is a loan estimate?
a document provided by a mortgage lender to a borrower that outlines the key terms and estimated costs associated with the mortgage loan.
It is designed to help borrowers understand the terms and costs of the loan they are applying for, allowing them to make informed decisions about whether to proceed with the loan
A loan estimate must be given to consumer no later than
three days after submitting a mortgage loan application
Closing Disclosure is a
document designed to provide borrowers with detailed information about the terms, costs, and risks associated with their mortgage loan transaction
A closing disclosure must be given to
consumer at least three days before closing of mortgage loan. if creditor makes changes the consumer must be given a new form and an additional three business day waiting period after the receipt of the new form
The borrower has the right to
inspect the HUD-1 one day prior to the day of settlement
What is HUD-1 used for?
reverse mortgage transactions.
When was the USA Patriot Act signed into law
after the 9/11 terrorist attack
