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RESPA Flashcards

1
Q

Why was RESPA created

A

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

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2
Q

Respa protects borrowers from

A

Abusive practices

Kickbacks

Unfair escrow requirements

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3
Q

What does respa cover

A

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

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4
Q

A respa refinancing means the

A

Existing obligation is satisfied and replaced by a new obligation with

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5
Q

When the same lender is involved for a refinancing, the transaction is not considered a refinancing if

A

No change in terms. Just payment renewal

Apr reduction

Court order

Workout agreement

Renewal of optional insurance

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6
Q

A lender that meets the following criteria should comply with respa if the make respa type loans

A

Lender has federally insured deposits

Lender regulated by federal agency

Creditors under consumer credit protection act

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7
Q

Can a mortgage broker be an employee of the lender

A

No

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8
Q

What services does a mortgage broker provide

A

Take the application
Process the loan
Underwrite the loan
Fund the loan

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9
Q

What is exempted from RESPa

A

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

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10
Q

A GFE, a HUD 1, or special information booklet is not required for what type of loans

A

Tila loans that require a loan estimate, closing disclosure, and a special information booklet

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11
Q

What six items make up an application

A 
Name
Monthly income
SSN
Property address
Estimated value
Loan amount sought
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12
Q

Does respa preempt state laws

A

Yes

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13
Q

Do respa disclosures have to be provided other than English

A

Yes

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14
Q

What does servicing include

A

Receiving payments from borrower of loan

Making payments to owner of a loan

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15
Q

How soon must servicing disclosures be give

A

Within 3 business days of the receipt of an application unless the application is denied

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16
Q

How must a servicing disclosure be delivered

A

By hand, mail, fax, or other electronic means

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17
Q

Can the broker or lender deliver the servicing disclosure

A

Yes

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18
Q

What does the servicing disclose let the borrower know

A

If the loan will be sold or transferred, or kept by the lender, or maybe kept by the lender

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19
Q

I’d there is more than one applicant at the same address, does a servicing disclosure need to be given to both

A

No

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20
Q

For closed end dealer or broker loans, who is responsible for providing the gfe

A

The lender unless he makes sure they did it

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21
Q

Does a lender have to provide a gfe if they don’t offer that type of loan

A

No

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22
Q

How soon should the gfe be provided

A

Within three days of the complete application

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23
Q

How soon should the estimate for the charges and terms be available

A

At least 10 days from when the Gfe was provided with the exception of the interest rate

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24
Q

What must the gfe show

A

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

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25
What disclosures on the gfe can’t be changed before consummation
Origination charge Transfer taxes Credit for the interest rate lock
26
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,
27
If the charges on the original gfe are out of tolerance the loan originator must provide the borrower with what
A new gfe
28
How does interest dependent changes impact a new gfe
A revised gfe must be provided within 3 days
29
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
30
What is a qualified change gfe circumstance
Acts of god. Ie war
31
Can lenders and mortgage brokers permitted to charge any fees before the delivery of a GFE
No
32
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
33
Can you charge to prepare a gfe
No
34
Can lenders and brokers require applicants to verify application information prior to issuance of a gfe
No
35
If lender allows borrower to shop for service providers, what must be given along with the gfe
A list of providers
36
If the borrower chooses to use a provider not on the lender list, then tolerances levels do or do not apply
Do not
37
Affliate business arrangement disclosure is required when
There is a referral to an affliate
38
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
39
The special information booklet also known as the home loan tool kit is only required for what kind of loan
First lien purchase money
40
When must the home loan tool kit be provided
Deliver or mailed to the applicant within three business days of receiving application
41
Does the home loan tool kit need to be delivered if the loan is denied or withdrawn
No
42
Does the mortgage broker deliver the home loan tool kit if a lender is involved
Yes
43
What type of loan is the HUD disclosure give. Too
All reverse mortgages
44
When the hud disclosure it be made available
One day in advance of closing
45
How many copies of the hud must the lender retain
Five years after settlement unless the lender does not service the loan
46
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
47
Can a fee be charged for completion of respa or tila disclosures
No
48
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
49
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
50
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
51
Servicing disclosures must be what
Clear and conspicuous Available in other languages Can be provided in electronic form May uses common abbreviations
52
Notice of Transfers is required for
Transfers or Sales or assignment for mortgage loans
53
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
54
Who must deliver the notice of transfer servicing notice
The transfer servicer and the transfer servicer
55
In how many days must the transfer deliver the notice
15 days before effective date of the servicing transfer
56
How soon should the transferee notice be delivered to the borrower
Not more than 15 days after the effective date of the transfer
57
Can notice of transfer notices be combined
Yes
58
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
59
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
60
Escrow payment accounts should make what type of payments for the borrower
Timely
61
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
62
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
63
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
64
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
65
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
66
How soon does the servicer have to investigate the error after receiving a servicing error notice
7 business days
67
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
68
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
69
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
70
Can a servicer charge a fee as a condition to respond to a servicing error notice
No
71
T/f. A servicer can report adverse payment information within 60 days after receiving g the servicing error not rice
False
72
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
73
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
74
During information servicing request, can adverse action information be sent to a credit bureau
Yes
75
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
76
Can a servicer assess a premium charge or fee related to force places insurance
No unless the borrower has failed to maintain hazard insurance
77
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
78
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 ```
79
What must the second forced place notice include
This is the final notice This is what the cost will be
80
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 ```
81
Before a servicer can renew forced placed insurance they must
Deliver notice to borrower 45 days in advance
82
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 ```
83
When are early intervention requirements not required
Bankruptcy When a borrower tells servicer not to contact them after receiving a notice
84
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
85
What is a completed loss mitigation application
One where the servicer has received all of the information that is needed for evaluating purposes
86
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
87
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
88
Can a servicer evaluate an incomplete application that was incomplete for a significant amount of time and offer a loss mitigtion option
Yes
89
A loss mitigation application is considered facially complete when
The borrower submits all documents an information required by the servicer
90
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
91
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
92
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
93
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
94
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
95
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
96
How many days does the servicer have to answer an appeal
30 days
97
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
98
How often should an escrow account analysis be performed
Annually
99
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
100
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
101
What is a escrow short year statement
A statement the borrower gets within 60 days if they payoff a loan

Additional CRCM (19 decks)

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