NATIONAL TEST CONTENT OUTLINE

Question 1

RESPA origins and purpose

Answer 1

The Real Estate Settlement Procedures Act (implemented by Regulation X) was implemented in
1974. RESPA was enacted to protect borrowers in purchases, refinances, home improvement and home equity lines of credit and any other federally related mortgage loans. RESPA covers
properties that are 1-4 family dwellings, condominiums, or manufactured house

Main Purpose: Educate borrowers on the cost of their loans

Question 2

Definition of “mortgage broker”

Answer 2

An individual or organization that markets mortgage loans and brings lenders and borrowers
together. A mortgage broker does not underwrite, fund or service mortgage loans.

Question 3

Knowledge of the prohibitions, limitations and exemptions set by RESPA

Answer 3

RESPA does not cover:
• Vacant Land
• Large Tracts of Land (25 acres or more – even if there is a dwelling on it)
• Commercial or business loans
• The government, its agencies or instrumentalities
• Temporary financing (bridge loans or swing loans)