RESPA

Question 1

RESPA

Answer 1

Real Estate Settlement Procedures Act, Regulation X

Ensures consumers can make informed decisions in real estate transactions by understanding the cost of settlement. The borrower can only be charged for actual cost of sermon service.

Question 2

Section 6

Answer 2

Servicing

1. Provide timely and accurate information.
2. Employees must follow procedures and laws.
3. Properly process and evaluate loss mitigation applications.
4. Informs the client regarding the transfer of a loan.

Question 3

Section 8

Answer 3

Referrals

1. Payment of referral fees or kickbacks is prohibited.
2. Unreasonable or excessive charges are illegal.
3. Fee splitting is prohibited.
4. Exchanges of things of value or referrals is illegal.
5. Limit of financial gain.

Question 4

Section 9

Answer 4

The borrower and/or seller has the right to choose their own title agent. A lender cannot require the use of a specific title company as a condition for the loan.

Question 5

Section 10

Answer 5

Escrow

1. Requirements for information that must be provided regarding escrow accounts.
2. Allows the servicer to guard against changes in escrow.
   • Limit is 1/6 (2 months) of total annual disbursement.
   • Surplus of $50 or more is returned to the borrower.

Question 6

MSDS

Answer 6

Mortgage Servicing Disclosure Statement, Section 6

Informs the borrower that their loan may be assigned to another company for servicing. Must be delivered to the consumer ad application or within three days. Must be kept for five years from the date of settlement.

Question 7

NTS

Answer 7

Notice of Transfer Statement, Section 6

Informs the borrower that their loan is being placed with a new servicer. Must be delivered to the borrower at least 15 days prior to transfer by the previous servicer and within 15 days after the transfer by the new servicer. During the 60 day period following the transfer, a late fee cannot be transferred to the power for payment sent to the previous servicer. 15-15-60

Question 8

ABA, AfBA

Answer 8

Affiliated Business Arrangement Disclosure, Section 8

Informs the consumer of the business arrangement between the two parties. Must be delivered to the consumer at the time of referral only if referring to an affiliate company with 1% or more ownership interest. Must be kept for five years from the date of settlement.

Question 9

Initial Escrow Statement

Answer 9

Explains the amount needed for escrow and breaks down each payment. Due at closing or within 45 calendar days of establishment of escrow account.

Question 10

Annual Escrow Statement

Answer 10

Determines any overages or shortages. Due within 30 days of analysis.

Question 11

Homeownership Counseling Organizations List

Answer 11

Informs the borrower of local counseling organizations. Must have at least 10 organizations listed within the vicinity of the subject property. Must be delivered to the consumer at application or within three business days if mailed.

Question 12

GFE

Answer 12

Good Faith Estimate

Informs the consumer of expected cost of the complete transaction and is good for 10 business days. Must be delivered to the consumer at application or within three business days of mailed. This disclosure is for HELOC and reverse mortgages only. Must be kept for three years from the date of settlement.

Question 13

HUD-1 Settlement Statement

Answer 13

Informs the borrower of the final costs for the entire transaction. Must be delivered to the borrower at closing or one day prior, if requested. This disclosure is for HELOC and reverse mortgages only. Must be kept for five years from settlement.