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How Much do you Know NMLS Mortgage? > RESPA > Flashcards

RESPA Flashcards

1
Q

What does RESPA stand for?

A

Real Estate Settlement Procedures ACT

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2
Q

What regulation is RESPA?

A

Regulation X

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3
Q

What is the regulatory agency for RESPA?

A

HUD (The Department of Housing and Urban Development)

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4
Q

Who administers and enforces RESPA?

A

CFPB (Consumer Financial Protection Bureau)

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5
Q

What is the purpose of RESPA? (Name three things RESPA focuses on…)

A
  • Allows consumers to obtain information about closing costs so they can shop for settlement services
  • Protects consumers from excessive costs and unearned fees
  • Limits the amount of funds that creditors can require consumers to deposit into escrow accounts
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6
Q

A loan originator is said to have taken an application when they collect what?

A

P - Property Address A - Address
E - Estimated Value L - Loan Amount
N - Name I - Income
C - Credit (SSN) E - Estimated Value
I - Income N - Name
L - Loan Amount S - SSN

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7
Q

Within how many days does the MLO have to deliver the initial set of disclosures after an application is taken?

A

3 business days

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8
Q

RESPA applies only to federally related mortgage loans. What loans are not covered by RESPA? Name four…

A
  • Loans for 25 acres or more
  • Loans for agricultural, business or commercial purposes
  • Loans secured by vacant land
  • Temporary financing (bridge loans)
  • Loan assumptions
  • Loan conversions
  • Loans sold in the secondary markets
  • All cash sales
  • Seller financing (Seller carry)
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9
Q

What three types of transactions use the Good Faith Estimate (GFE)?

A
  • HELOCS
  • Reverse mortgages (HECM)
  • Closed end loans where the creditor makes 5 or fewer loans annually
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10
Q

What is a Good Faith Estimate (GFE)?

A

It is an estimate of the charges that are due at the time of closing

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11
Q

When is the Good Faith Estimate (GFE) required?

A

It is required within 3 business days of application

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12
Q

For how long must the GFE be retained?

A

3 years

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13
Q

For what types of transactions is a HUD-1 Settlement Statement utilized?

A

-Reverse mortgages (HECM)
- Closed end loans where the creditor makes 5 or fewer loans annually

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14
Q

What is the HUD-1 Settlement Statement?

A

It is a document provided at closing that itemizes the actual costs of settling the loan

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15
Q

How long must the HUD-1 Settlement Statement be retained?

A

5 years

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16
Q

What does section 6 of RESPA cover?

A

Loan servicing

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17
Q

What does section 8 of RESPA cover?

A

Kickbacks, fee-splitting, and unearned fees

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18
Q

What does section 10 of RESPA cover?

A

Escrow accounts

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19
Q

How many days does the lender have to provide the Initial Escrow Statement to the borrower?

A

45 days

*This is typically delivered to the borrower at closing

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20
Q

What is the penalty for a violation of section 8 of RESPA?

A

Fines up to $10,000 and/or 1 year in prison

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21
Q

What identifies and communicates if there is a surplus in a borrower’s escrow account?

A

The Annual Escrow Statement

22
Q

How many days does the lender have to refund an escrow surplus to the borrower?

What is considered a surplus?

A

The lender has within 30 days from the escrow analysis to refund a surplus to the borrower.

A surplus is considered to be more than $50 over the 2 month cushion

23
Q

If the original lender will not be servicing the loan, they must provide what to a borrower within 3 business days of loan application?

A
  • Mortgage Servicing Disclosure Statement (MSDS)
  • Initial Servicing Disclosure Statement (ISDS)
  • Initial Servicing Transfer Disclosure (ISTD)
24
Q

When a loan is transferred to another servicer, what must be provided to the borrower?

A

A servicing transfer statement

25
Q

How many days does the current lender have to provide a notice to the borrower of a servicing transfer?

A

15 days

26
Q

How many days does a new lender have to provide notice to a borrower of a servicing transfer?

A

15 days

27
Q

True or False? A new loan servicer can assess late fees during the first 60 days of a servicing transfer?

A

False

The new loan servicer cannot assess late fees for a period of 60 days after the transfer, as long as the payment is made on time.

28
Q

How many days does a servicer have to respond to a “qualified written request”?

A

They must acknowledge receipt of the “qualified written request” within 5 days of receipt.

29
Q

How many days does a servicer have to investigate and respond to a “qualified written request”?

A

30-45 days

30
Q

True or False? Giving or accepting a fee, kickback, or a “thing of value” in exchange for the referral of settlement business is allowed under RESPA?

A

False

RESPA prohibits all of these things, including fee-splitting and charging unearned fees under section 8

31
Q

What is an ABA Disclosure? When must it be provided?

A

Affiliated Business Arrangement Disclosure

It must be provided if you have an affiliate relationship with or a direct or beneficial ownership interest of more than one (1) percent in a provider of settlement services. It is due at time of referral

32
Q

What is the max cushion a lender can collect for annual tax and insurance payments?

A

2 months or 1/6th of the annual amount

33
Q

How many MLOs can there be on each transaction?

A

You can only have one MLO on a loan transaction

34
Q

What loans are covered by RESPA?

A

1st and 2nd mortgage related transactions on residential real property including:

  • 1-4 unit family dwellings
  • Condo’s
  • Manufactured homes (must be attached to the ground)
35
Q

When is the GFE due?

A

It is due within 3 business days of application

36
Q

What is the SCIB? What are other names for the SCIB?

A

Settlement Cost Information Booklet
-AKA-
Special Information Booklet
-AKA-
“Know Before You Owe”

37
Q

On what type of transaction is the SCIB required?

A

Purchase transaction of residential property

38
Q

If you chose NOT to have an escrow account, the lender will charge you what?

A

A one-time escrow waiver fee of 0.25%

39
Q

On the GFE, the estimate for all settlement charges must be available for how many days?

A

10 days

40
Q

How many days must the interest rate be locked prior to settlement?

A

7 days

This is required due to disclosing the initial LE (reflecting the lock-in) a minimum of 7 days prior to closing.

41
Q

Lender charges fall under what tolerance category?

A

0% Tolerance

42
Q

In what box are lender charges located on the GFE?

A

Box A

43
Q

In what section are lender charges/costs located on the LE/CD?

A

Under “Loan Costs”, section A

44
Q

What does LE stand for?

A

Loan Estimate

45
Q

What does CD stand for?

A

Closing Disclosure

46
Q

In what box are 3rd party fees located on the GFE?

A

Box B

47
Q

IN what section are 3rd party charges located on the LE/CD?

A

*Under “Loan Costs” & “Other Costs” on page 2.

48
Q

What is the penalty for a RESPA violation?

A

A fine up to $10,000 and up to one year in prison, or both

49
Q

What is YSP? What are the two definitions of YSP?

A

Yield Spread Premium

A fee paid to the loan originator by the lender for originating a loan at an interest rate higher than the par rate.

A lender’s rebate received by the borrower when the loan is originated at an interest rate higher than the par rate.

50
Q

A disclosure of 10 HUD approved homeownership counseling organizations in the area must be given to the borrower within how many days of application?

A

3 business days

There is n o requirement for the borrower to attend

How Much do you Know NMLS Mortgage? (2 decks)

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