RESPA Flashcards
Why was RESPA created
To require lenders, mortgage brokers, and services of home loans to provide borrowers with accurate and timely disclosures of the nature and costs of residential real estate settlement services
Respa protects borrowers from
Abusive practices
Kickbacks
Unfair escrow requirements
What does respa cover
Non temporary 1st or second lean for 1-4 family
Loan guaranteed by HUD or federal agency
Intended for sale to fans, fhlmc, gnma
Refi of federally related mortgage
Residential real property in US territory
A respa refinancing means the
Existing obligation is satisfied and replaced by a new obligation with
When the same lender is involved for a refinancing, the transaction is not considered a refinancing if
No change in terms. Just payment renewal
Apr reduction
Court order
Workout agreement
Renewal of optional insurance
A lender that meets the following criteria should comply with respa if the make respa type loans
Lender has federally insured deposits
Lender regulated by federal agency
Creditors under consumer credit protection act
Can a mortgage broker be an employee of the lender
No
What services does a mortgage broker provide
Take the application
Process the loan
Underwrite the loan
Fund the loan
What is exempted from RESPa
Business purpose loans
Temp loans less than 2 years
Vacant lot loans - unless something will be put on it in two years
Conversion of a federal secured loan if it is consistent with original mortgage
Loans that require a loan Estimate, closing disclosure and a special information booklet under reg z
Loans secured
A GFE, a HUD 1, or special information booklet is not required for what type of loans
Tila loans that require a loan estimate, closing disclosure, and a special information booklet
What six items make up an application
Name Monthly income SSN Property address Estimated value Loan amount sought
Does respa preempt state laws
Yes
Do respa disclosures have to be provided other than English
Yes
What does servicing include
Receiving payments from borrower of loan
Making payments to owner of a loan
How soon must servicing disclosures be give
Within 3 business days of the receipt of an application unless the application is denied
How must a servicing disclosure be delivered
By hand, mail, fax, or other electronic means
Can the broker or lender deliver the servicing disclosure
Yes
What does the servicing disclose let the borrower know
If the loan will be sold or transferred, or kept by the lender, or maybe kept by the lender
I’d there is more than one applicant at the same address, does a servicing disclosure need to be given to both
No
For closed end dealer or broker loans, who is responsible for providing the gfe
The lender unless he makes sure they did it
Does a lender have to provide a gfe if they don’t offer that type of loan
No
How soon should the gfe be provided
Within three days of the complete application
How soon should the estimate for the charges and terms be available
At least 10 days from when the Gfe was provided with the exception of the interest rate
What must the gfe show
Estimate borrowers settlement costs (can use area estimates)
Fees to service provider
Cost that will be listed on HUD 1
Payment that reflects only principal ,interest and mortgage insurance
Origination charges
What disclosures on the gfe can’t be changed before consummation
Origination charge
Transfer taxes
Credit for the interest rate lock
The sum of the following gfe items may not change more than10%
Lender required settlement services where the lender selects the service provider
Lender required services, title services,
If the charges on the original gfe are out of tolerance the loan originator must provide the borrower with what
A new gfe
How does interest dependent changes impact a new gfe
A revised gfe must be provided within 3 days
If the borrower requested changes to the loan that change settlement charges or terms, the. What has to be provided to the customer
A revised gfe
What is a qualified change gfe circumstance
Acts of god. Ie war
Can lenders and mortgage brokers permitted to charge any fees before the delivery of a GFE
No
When can a broker and lender charge additional fees
Once the gfe has been given and the applicant indicates a desire continue with the loan
Can you charge to prepare a gfe
No
Can lenders and brokers require applicants to verify application information prior to issuance of a gfe
No
If lender allows borrower to shop for service providers, what must be given along with the gfe
A list of providers
If the borrower chooses to use a provider not on the lender list, then tolerances levels do or do not apply
Do not
Affliate business arrangement disclosure is required when
There is a referral to an affliate
When does the affiliates arrange tent disclosure have to be given
At the time of referral or with the gfe it should show
Nature of relationship
Estimated charge
Place for borrower to sign
And it must be on a separate piece of paper
The special information booklet also known as the home loan tool kit is only required for what kind of loan
First lien purchase money
When must the home loan tool kit be provided
Deliver or mailed to the applicant within three business days of receiving application
Does the home loan tool kit need to be delivered if the loan is denied or withdrawn
No
Does the mortgage broker deliver the home loan tool kit if a lender is involved
Yes
What type of loan is the HUD disclosure give. Too
All reverse mortgages
When the hud disclosure it be made available
One day in advance of closing
How many copies of the hud must the lender retain
Five years after settlement unless the lender does not service the loan
Does the lender transfer the hud statement as well if they do not retain the servicing on the loan
Yes. And the new person must keep it for 5 years
Can a fee be charged for completion of respa or tila disclosures
No
Lender payments to mortgage brokers are legal when
The payment is good for services actually furnished
The payment is reasonably related to the value of the goods or services furnished
Can a person give or receive a portion of a fee for servicimg connected with a federally related mortgage outside of the services actually performed
No
What does a servicer include
Any person responsible for servicing a federally related mortgage loan
Receiving a payment
Making a payment to owner of loan
Making payment to borrower in case of a reverse mortgage
Servicing disclosures must be what
Clear and conspicuous
Available in other languages
Can be provided in electronic form
May uses common abbreviations
Notice of Transfers is required for
Transfers or Sales or assignment for mortgage loans
What are some exclusions if not delivering a transfer of servicing notice
Transfer between affliates
A transfer because of a merger
When a mortgage is assigned to the FHA
Who must deliver the notice of transfer servicing notice
The transfer servicer and the transfer servicer
In how many days must the transfer deliver the notice
15 days before effective date of the servicing transfer
How soon should the transferee notice be delivered to the borrower
Not more than 15 days after the effective date of the transfer
Can notice of transfer notices be combined
Yes
What are the contents of a notice of transfer of servicing
Effects date of transfer
Name address telephone number of the transferre servicer
Name address telephone number of the transfer error servicer
Date transferee will stop taking payments
Statement that transfer does not impact loan terms
After a loan is transferred, a lender cannot charge a late fee for how many days if the borrower made a payment to the old company
60
Escrow payment accounts should make what type of payments for the borrower
Timely
How many days must the escrower refund the balance of an escrow account when a loan is paid in full
20 business days unless the borrower wants to apply it to a new loan
If a servicer received a wriiten notice with their name, information that allows the servicer to identify the loan, and the error that occurredfrom the borrower it must comply with
The error resolution procedures
A servicer does not have to respond to a notice of error of the
Notice is duplicative
Is overly broad
Specific error can not be determined
Received more than a year after a servicing transfer
How can a servicer respond to a servicing error notice
By correcting the error with a written notice of the correction, the effective date of the correction, contact info
By conducting a reaaonable investigation and providing the borrower with a written statement t that no error has occurred
How soon does the servicer have to contact the borrower after receiving a servicing error notice
5 business days. The borrower must be given a written response
How soon does the servicer have to investigate the error after receiving a servicing error notice
7 business days
If a servicer received a notice less than how many days before a foreclosure sale, does the servicer have to comply with the notice
No, but they must respond in good faith
If a servicer received an error notice for all other errors, the time limit may be extended by how many business days if the servicer notifies the borrower of the extension and the reason for it in writing
15
Does the servicer have to provide the borrower copies of documentation after receiving a servicing error notice
Yes. Within 15 business days at no charge
Can a servicer charge a fee as a condition to respond to a servicing error notice
No
T/f. A servicer can report adverse payment information within 60 days after receiving g the servicing error not rice
False
In what circumstances does a servicer not have to respond to information requests
Information requested before
Information is confidential
Request not related to borrower loan
Request is overly burdensome
The request is untimely
If the servicer does not have to fulfill an information servicing request because of an exception, how soon do they have to let the borrower know
5 business days
During information servicing request, can adverse action information be sent to a credit bureau
Yes
What type of hazard insurance is not considered forced place
Flood insurance
Servicer renewed by the servicer according to Respa information
Insurance renewed by the servicer and borrower discretion
Can a servicer assess a premium charge or fee related to force places insurance
No unless the borrower has failed to maintain hazard insurance
What must the servicer do before they charge a borrower for forced place insurance
Send written notice 45 days in advance
Allow 30 days for borrower to provide evidence it was paid before sending second reminder
Send second notice 15 days before the fee is accessed
Forced place notice requirements include
Date of notice Servicer address Borrower name and address Statement telling borrower insurance expired and we will get it at your expense and our insurance may be more How the bore can resolve
What must the second forced place notice include
This is the final notice
This is what the cost will be
For insurance with no proof of continuous coverage, the servicer mist
Date the notice Servicer name and address Borrower name and address Hey insurance is required Call me at this number if you have questions This is the final notice
Before a servicer can renew forced placed insurance they must
Deliver notice to borrower 45 days in advance
Servicer must maintain policies and procedures that
Are accurate and timely Investigate and respond and make corrections Submit document for foreclosure process Deal with probate Identify loss mitigation
When are early intervention requirements not required
Bankruptcy
When a borrower tells servicer not to contact them after receiving a notice
A servicer must maintain delinquency policies and procedures that
Assign personnel to a delinquent borrower 45 days after delinquency
Make personal available to delinquent borrower by phone and payment options until they made two consecutive payments
Ensure servicer can provide live responses to borrower calls in a timely manner
What is a completed loss mitigation application
One where the servicer has received all of the information that is needed for evaluating purposes
What must the servicer do if it receives a “completed”loss mitigating application in 45 days
Acknowledge the receipt in writing within 5 business days
If loss mitigation application is received more than 37 days before foreclosure sale then within 30 days the servicer must
Evaluate the borrower options
Provide the borrower with a notice of their options and they have the right to appeal
Can a servicer evaluate an incomplete application that was incomplete for a significant amount of time and offer a loss mitigtion option
Yes
A loss mitigation application is considered facially complete when
The borrower submits all documents an information required by the servicer
If a loan mitigation application is denied, what must the servicer do
Send a notice that states the reason for denial
And that the borrower can appeal
What response options do borrowers have for loss mitigation offers
If offer received >90 days than foreclosure, the borrower should respond no earlier than 14 days after offer
If < 90 days but more than 37 days before foreclosure , the borrower should respond no earlier than 7 days
Loss mitigation offers not accepted within the dead line are considered to be what
Rejected unless borrower makes a payment under the plan but still has some outstanding to dos
Servicer can not file for foreclosure unless the borrower is how many days delinquent
120, or they violated a due on sale clause, or a subordinate lien holder is foreclosing
If the borrower completed a complete loss mitigation application during the preforeclorse process the servicer may not make the first notice unless
The servicer let the borrower know he does not qualify
The borrower has not requested an appeal
The borrower rejected all options
The appeal has been denied
What is the probation on a foreclosure sale
Borrower has 37 days before the sale to submit complete application. If so, the servicer cannot move forward with judgement unless:
The servicer let borrower know they don’t qualify
The borrower rejects the options
The borrower fails to perform per the agreement
How many days does the servicer have to answer an appeal
30 days
What must a lender do when they establish an escrow account
Conduct an escrow analysis to determine how much the borrower must deposit into the account
How often should an escrow account analysis be performed
Annually
When does the lender submit an initial escrow account statement to the borrower
At settlement or within 44 days of settlement. It should show:
The monthly payment and what is going to escrow
Itimezatiin of what escrow will pay
The distribution dates
A trail running balance
The annual account statement should contain
The payment amount and what is going to escrow
How it looked last year
Total amount paid to escrow
The account balance at the end of the year
An explanation of how any surplus was handled
What is a escrow short year statement
A statement the borrower gets within 60 days if they payoff a loan
