RESPA

Question 1

What does RESPA stand for

Answer 1

Real Estate Settlement Procedures Act

Question 2

Why did congress pass RESPA

Answer 2

For consumer protection for loans on residential property (1-4 units)(owner occupied)

Question 3

What does RESPA allow

Answer 3

for borrowers to receive timely disclosure regarding nature and cost of settlement service

Question 4

The purpose of RESPA is

Answer 4

To help consumers be better shoppers for settlement services

Question 5

What does section 6 of RESPA deal with

Answer 5

Protecting homeowners against mortage servicing abuses

Question 6

What is section 8 of RESPA

Answer 6

Prohibits kickbacks, fee-splitting ,& receiving unearned fees (nothing of value can be given or received )

Question 7

What is section 9 of RESPA

Answer 7

A seller can’t require the use of a particular title company

Question 8

What is section 10 of RESPA

Answer 8

Set limits on amounts that can be charged to maintain escrow accounts

Question 9

Examples of settlement services include

Answer 9

1. origination of federally related mortgage loan
2. Mortgage broker services
3. Title Services
4. Services such as origination, processing & federal mortgage loan funding

Question 10

RESPA is also known as

Answer 10

Regulation X

Question 11

RESPA doesn’t cover what

Answer 11

1. All cash sales
2. Sells where home seller takes back mortgage
3. Rental property transaction
4. agriculture property (property 25+ acres)
5. Vacant Land
6. commercial properties
7. Temporary financing (such as bridge or construction loans)

Question 12

what is a mortgage servicer

Answer 12

A company that collects monthly mortgage payments such as taxes, insurance, etc. and notifies the borrower of late payments

Question 13

what is fee splitting

Answer 13

splitting money with an unlicensed person

Question 14

RESPA section 9 allows the borrower to sue the lender for

Answer 14

3 times the amount paid for the title insurance if lender forces borrower to use said title insurance
-AKA Treble damages

Question 15

what does an escrow account do

Answer 15

Holds the money that mortgage lenders collect monthly

Question 16

How much does RESPA limit lenders each month when collecting on Escrow Accounts

Answer 16

1/12 of the annual property tax & annual insurance premium

Question 17

How Much does RESPA allow lenders to collect at closing of a deal as a cushion on an escrow account

Answer 17

2 months (1/6) of the property taxes & hazard insurance

Question 18

How often do lenders perform escrow account analysis

Answer 18

once a year & they notify borrowers of any shortages

Question 19

At what point do lenders have to return funds on an escrow account

Answer 19

when the amount exceeds $50 or more