REAL ESTATE SETTLEMENT PROCEDURES ACT AND REGULATION X Flashcards
In general, RESPA covers all loans secured with a mortgage placed on a one- to-four-family residential property. When first passed, RESPA only covered
first liens on residential real property. Later amendments expanded that coverage to include what types of loans?
Most purchase money loans; assumptions; refinances; property improvement loans; and home equity lines of credit.
The main purpose of an escrow analysis is to determine what is called a “target balance.” Define target balance.
The amount of money needed to pay all necessary disbursements during the year plus any allowed cushion.
If the credit union discovers a deficiency in a member’s escrow account, when must the member be notified of the deficiency and what options are given to the credit union to recover this deficiency?
The member must be notified at least once during the escrow account computation year about the deficiency.
-The credit union can: (1) allow the deficiency to exist; (2) if the deficiency is equal to or greater than the monthly escrow payment, the CU can require
payment in two or more monthly installments; (3) if the deficiency is less than the monthly escrow payment, can require full payment within 30 days or in two or more monthly installments.
How often are credit unions required to reanalyze member escrow accounts?
At least once every 12 months.
The Regulation requires an Initial Escrow Account Statement when an escrow account is established. What is the timing for delivering this statement to the member?
Either at the time the escrow account is established or at settlement or within 45 days of settlement if the account is a condition of the loan.
Members must be given an Annual Escrow Account Statement each year. This statement must contain a history of the account during the prior escrow
computation year and a projection of the expected activity for the next escrow account computation year. This statement is required to contain ten additional items of information. List five of those items.
The amount of the past year’s monthly payment; the portion of that payment that goes into the escrow account; the portion of that payment that goes toward discretionary payments; the total amount paid into the escrow account during the year; the total amount paid out of the account for various escrow items; the balance in the account at the end of the account computation year; how any surplus is being handled; how any shortage or deficiency is to be paid; explanation of why the estimated low monthly balance was not reached; and the amount of the current monthly payment that is going into the escrow account.
What three elements must be present for a fee to be considered a violation of the Antikickback Rules?
There must be a payment or giving of a thing of value; must be pursuant to an agreement to refer business; and a referral must occur.
What is the Error Resolution Procedures?
The borrower must provide a written notice containing the borrower’s name, loan account number, and a description of the alleged error. The CU must acknowledge receipt within 5 days. The CU must investigate and respond the results withing 30 days. May take up to 45 days to respond upon proper notification to the borrower.
