RESPA

Question 1

RESPA stands for?

Answer 1

Real estate settlement procedures act

Question 2

Congress enacted RESPA for what 2 reasons?

Answer 2

1. To allow consumers to obtain information on the cost of closing so that they can shop around
2. To protect consumer from excessive settlement costs and unearned fees

Question 3

What regulation is RESPA?

Answer 3

Regulation X

Question 4

RESPA is governed by who?

Answer 4

The CFPB

Question 5

RESPA’s Good Faith Estimate was replaced with what document?

Answer 5

The Loan Estimate

Question 6

Exempt Loans under RESPA?

Answer 6

• Agricultural, business, and commercial
• Temporary financing/construction loans
• Loans secured by vacant land
• Loan assumptions which are permissible without lender approval
• Loan conversions, when a new note is not required and the provisions are consistent with those of the original mortgage
• Transactions between lenders and investors for the sale of a closed loan to a purchaser in the secondary market, such as the sale of a loan to FMNA/ FHLMC

Question 7

Referral

Answer 7

an action, either written or oral, that influences the selection of a provider of a settlement service

Question 8

Settlement service

Answer 8

any service provided in connection with a real estate settlement

ex: title search, title insurance, preparation of documents, property surveys, the handling of processing and closing or settlement

Question 9

Thing of Value

Answer 9

any payment, advance, loan, or service including money, discounts, commissions, salaries, stock, opportunities to participate in a money making program, tickets to theater or sporting event, can also be a empty gift card

Question 10

Fee splitting and kickbacks

Answer 10

paying or accepting unearned fees, or marking up the fee for a particular settlement service and splitting the overage with another settlement service provider

Question 11

Markup

Answer 11

1. an upcharge in the actual cost of a settlement service and the retention of the additional fee
2. unilateral increase in the cost of settlement services

Question 12

YSP stands for

Answer 12

Yield spread premium

Question 13

Borrower credit is a ?

Answer 13

Fee paid to the borrower by the lender when a loan is originated at a higher interest rate than the lowest rate for which the borrower qualifies for

Question 14

Special information booklet is now known as?

Answer 14

Your home loan toolkit a step by step guide

Question 15

When is the disclosure “your home loan toolkit a step by step guide” due?

Answer 15

3 business days after completion of a loan application for a purchase

Question 16

When shopping for a HELOC you must receive what document ?

Answer 16

-What you should know about your home equity lines of credit

Question 17

Affiliated business arrangement disclosure is due when?

Answer 17

at the time the referral is made

Question 18

RESPA deals with 3 major sections. What are they?

Answer 18

section 6- servicing
section 8- kickbacks/referaal fees
section 10- escrows

Question 19

What 2 disclosures are related to mortgage servicing? when are they due?

Answer 19

transferor of servicer due 15 days before the effective date of the transfer and transferee of servicer due 15 days after the transfer

Question 20

What is the transfer of servicing rule?

Answer 20

15/15/60

Question 21

The initial escrow statement is due when?

Answer 21

45 days from settlement

Question 22

The annual escrow statement is due when?

Answer 22

30 days from completion of the escrow account computation

Question 23

Escrow cushion is limited to?

Answer 23

one sixth of the total annual disbursements

Question 24

An escrow refund is due if the surplus is greater than ?

Answer 24

$50

Question 25

If an escrow account surplus is less than $50 what happens?

Answer 25

The surplus is applied to next years escrow payments

Question 26

For a violation of section 8 of RESPA the penalty is?

Answer 26

$10,000 and one year in prison