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ACES > RESPA > Flashcards

RESPA Flashcards

1
Q

Purpose of RESPA

A
  1. Protect the borrower by educating them on the costs associated with the transaction
  2. Allows the borrower to obtain information about the closing costs so that they can shop for settlement services
  3. Protects the consumer from excess settlement costs and unearned fees
  4. Limits the amount that the lender can collect for escrow
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2
Q

When was RESPA enacted?

A

1974

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3
Q

RESPA applies to…

A

1-4 residential property

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4
Q

What are the RESPA Disclosures?

A
  1. GFE or Good Faith Estimate- within 3 days of application
  2. HUD-1 or Uniform settlement statement- due at closing or 1 day prior if the borrower requests
  3. Homeownership Counseling Organizations- due within 3 business days of application
  4. Mortgage Servicing Disclosure Statement (MSDS) aka Initial Servicing Disclosure Statement (ISDS) - Due within 3 business days of application
  5. Special information Booklet aka Settlement Cost Information Booklet (SCIB) - due within 3 business days of application
  6. Initial Escrow Statement- due within 45 days of closing
  7. Annual Escrow Statement- due annually
  8. Service Transfer Statement- 15 days before transfer and 15 days after transfer
  9. Affiliated Business Arrangement- due at the time of referral
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5
Q

What is the purpose of RESPA?

A
  1. Protect the borrower by educating them on the costs associated with the transaction
  2. Allows the borrower to obtain information about the closing costs so that they can shop for settlement services
  3. Protects the consumer from excess settlement costs and unearned fees
  4. Limits the amount that the lender can collect for escrow
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6
Q

What regulation is RESPA?

A

X; RE”X”PA

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7
Q

RESPA

A

Real Estate Settlement Procedures Act

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8
Q

Who regulates RESPA?

A

HUD

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9
Q

Exceptions to RESPA?

A
  1. Loans for 25 acres or more
  2. ABC- Agricultural, Business, Commercial
  3. Loans that are secured by vacant land
  4. Temporary Financing
  5. Loans sold in the secondary market
  6. All cash sales
  7. Purchases where the seller carries back the mortgage (seller financed)
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10
Q

Business day

A

Any day you are open for business excluding FEDERAL holidays and Sundays

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11
Q

SCIB

A

Special Information Booklet; Mortgage 101; RESPA disclosure. Does not apply to: Refi, HECM, 5 units, or Close end subordinate loans. Cannot be part of Bigger package

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12
Q

Initial Escrow Statement

A

Provides the borrower with an estimate of escrow payments required in the first 12 months. RESPA disclosure

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13
Q

Annual Escrow Statement

A
  1. Annual analysis of the borrower’s escrow account
  2. How a surplus or deficiency is to be paid/handled
    RESPA disclosure
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14
Q

RESPA Disclosures Acronym

A

HIMHASGAS

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15
Q

Escrow accounts under RESPA must…

A
  1. Have 2 month cushion

2. Any amount greater than $50 + cushion returned to borrower (30 cdays)

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16
Q

Transferor

A

Old loan service provider

17
Q

Transferee

A

New loan service provider

18
Q

How many days must a loan servicer let the borrower know of transfer?

A

15 days prior to transfer and 15 days after transfer

19
Q

What is the maximum amount an escrow can hold under RESPA?

A

14 months (12 months + 2 month cushion)

20
Q

MSDS or ISDS

A

Informs the borrower what we plan to do with the servicing of the loan; RESPA Disclosure

21
Q

ABA

A

Affiliated Business Arrangement; Must disclose to the borrower if the lender own 1% or more of the settlement service company that the borrower is being referred to ; RESPA disclosure

22
Q

What is section 6 of RESPA?

A

Servicing the Loan

23
Q

What is section 8 of RESPA?

A

Kickbacks

24
Q

What is section 9 of RESPA?

A

Title Insurance

25
Q

What is section 10 of RESPA?

A

Escrow Accounts

26
Q

What is a loss payee?

A

Lenders must be added to the insurance policy as the “loss payee”- this is known as a mortgage clause

27
Q

What title is forced placed insurance under?

A

Title 6

28
Q

What does section 9 prohibit lenders from?

A

Prohibits a lender from requiring a homebuyer to use a particular title company as a condition of the sale

29
Q

Transactions that still use the GFE and HUD-1

A
  1. Reverse Mortgage (HECM)

2. Closed end loans where the creditor makes 5 of fewer loans annually

ACES (22 decks)

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