REAL ESTATE SETTLEMENT PROCEDURES ACT (RESP A) Flashcards
What is a Federal Statute that protects borrowers involved
in purchases, refinances, home improvement loans, home
equity lines of credit, or any other federally related residential mortgage loans used in financing the purchase of 1-4 family dwellings, condominiums, or manufactured housing placed on a lot.
Regulation X, the Real Estate Settlement Procedures Act
RESPA
What was behind the creation of RESPA in the 1970’s?
the idea behind RESPA was to combat these “abusive practices” by providing consumers with more accurate and timely information about the settlement process for residential mortgage loans.
What special information booklet provided by the Secretary of Housing and Urban Development for lenders to pass on to purchase applicants?
SETTLEMENT COST INFORMATION BOOKLET
What allows the borrower the opportunity to see the costs that will be associated with the loan and must be sent to the potential borrower within three (3) business days after receiving his application?
GOOD FAITH ESTIMATE (GFE)
What will reflect the actual costs at closing?
Uniform Settlement Statement (or HUD-1)
this discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. and must be send to the borrower 3 days receiving the loan application
Mortgage Servicing Disclosure Statement/NITIAL SERVICING TRANSFER DISCLOSURE
The Real Estate Settlement Procedures Act (RESPA) is a Federal Statute that protects borrowers involved in using residential mortgage loans for the purchases of:
1 to 4 family dwellings & Condominiums
How many business days do lenders have to provide the Settlement Cost Information Booklet (hand deliver or mail) after receiving the application from the potential borrower?
Three(3) business days
The Uniform Settlement Statement must conspicuously and clearly itemize all charges to the borrower and the seller in connection with the settlement, as well as indicating whether any title insurance premium included in the charges covers or insures:
The lender’s interest in the property
The borrower’s interest in the property
Both parties interests in the property
If the servicing lender assigns, sells, or transfers servicing rights to the loan to another servicer, who is required to send a notice of the transfer form?
Both the transferor and the transferee
What is the transfer period window dictated by federal law in which no late fees can be charged to a borrower who sends his or her payment to the original servicer, rather than the new one, before the payment’s actual due date (including any grace period or late date allowed within the loan documents)?
Sixty(60) days
if a servicer receives a “qualified written request” from a borrower for information about an account, the servicer must research the borrower’s inquiry and, when the servicer corrects, if necessary, or communicates the decision as to whether there is indeed an error, within how many business days after receiving the request?
Sixty (60) business days
What is the fine for a GFE violation of Section 5 of RESPA?
The loan originator must reimburse excess charges within thirty (30) days of closing
What is the only fee that can be collected before the GFE is delivered to the borrower?
Credit report fee
Which of the following items would NOT necessarily be needed in order to have a “GFE application”?
A VOD is not necessary to have a “GFE Application”
Many of the changes to the RESPA rule were designed with what purpose in mind?
any of the changes that the new RESPA rules have been made to facilitate the ease of shopping for loan products by providing clear and concise disclosure of loan programs and fees. It has also provided consumer safeguards against Bait and Switch tactics sometimes used in the marketplace.
Which of the following is NOT a RESPA mandated application disclosure?
An Adverse Action Statement is not a RESPA required application disclosure. The other three (3) are required.
What fees cannot increase at settlement?
origination charges, buy-down points, and transfer taxes
What is it when the borrower is promised one set of fees and an interest rate, only to have it change at the closing table?
Bait and Switch
HUD has estimated that the implementation of these measures will possibly save the average borrower how much money in settlement costs per transaction?
$700
