RESPA Flashcards
The Real Estate Settlement Procedures Act (RESPA) provides consumer protection for loans on _____________________.
residential properties of 1-4 units
Nothing of value can be given in exchange for _________________.
the referral of business
RESPA is also known as ________________.
Regulation X
The __________________ enforces the RESPA regulations. _____ was the previous enforcer.
Consumer Financial Protection Bureau (CFPB) / HUD
RESPA (Regulation X) is primarily involved with the disclosure of _______________ and the prevention of ___________, which may raise the amount of closing costs to the consumer.
closing costs / kickbacks
RESPA does not apply to loans secured by ___________ properties.
commercial
RESPA does not apply to vacant land unless a dwelling is intended to be constructed on the land within ______.
2 years
RESPA does not apply to properties containing __ or more acres (also known as __________ property).
25 / agricultural
RESPA does not apply to temporary financing, such as ______ loans and ____________ loans.
bridge / construction
RESPA Section 6 deals with the ____________ and _______________ abuses.
mortgage servicer / mortgage servicing
A _______________ is the company that collects monthly mortgage payments, pays taxes, insurance, and other items as they come due, and notifies the borrower of late payments.
mortgage servicer
Homeowners who are having issues with their mortgage servicers may take advantage of a provision of RESPA whereby a borrower may request information relating to the servicing of a loan. This is called a _________________, or ____, and imposes a duty to respond to borrowers’ inquiries.
Qualified Written Request / QWR
A Qualified Written Request (QWR) requires that the lender acknowledge receipt of the request within _________________ and seek to resolve the issue/concern within ______ (with a ______ extension if needed) in connection to notices of error submitted by the borrower.
5 business days / 30 days / 15 day
RESPA Section 6 mandates a creditor to provide a ____________ to a consumer.
monthly statement
RESPA Section 6 states that creditors must promptly post a payment _______________.
the day it is received
RESPA Section 6 requires creditors to respond to a payoff request within ______________.
7 business days
RESPA Section 6 requires creditors to make disclosure to the consumer ___ and ___ days prior to billing for force-placed insurance.
30 / 45
RESPA Section 6 states that creditors must resolve written consumer complaints within ________ of written receipt.
30-45 days
RESPA Section 6 states that the lender must attempt to establish _________ within ______ with a borrower who has missed a mortgage payment.
live contact / 36 days
RESPA Section 6 states that a creditor must notify a borrower within ______ after submission of a complete loan workout application if there is an option to ______________.
30 days / save the home
According to RESPA Section 6 a creditor may not seek judicial foreclosure or a trustee’s sale action for at least ________ for a borrower who is delinquent.
120 days
RESPA Section 6 prohibits _________, which is continuing to seek foreclosure actions while the borrower is being considered for other workout options.
dual tracking
RESPA Section 8 prohibits ________, __________ and __________.
kickbacks / fee splitting / unearned fees
Illegal referral fees are known as _________.
kickbacks
RESPA Section 8 prohibits giving or accepting a ____________ in exchange for the referral of settlement services.
“thing of value”
Despite prohibiting kickbacks, RESPA does NOT prohibit payment of ____________ for goods or services that were actually received or performed.
fair market value
RESPA Section 9 prohibits the seller from requiring the buyer to use a particular __________, as a condition of the sale.
title company
If RESPA Section 9 is violated, the seller could be sued for ____ the amount paid for the service. Also referred to as ___________.
3x / treble damages
RESPA Section 10 requires lenders to conduct an _______________ if the account has impounds (escrow account/reserve account).
annual escrow analysis
The annual escrow analysis summarizes the __________________________.
activity in the impound account
RESPA Section 10 states that the lender can take no more than ____ of the annual amount of the property taxes and insurance premium for the purpose of the escrow account.
1/12th
RESPA Section 10 states that in order to protect itself from escrow shortages, the lender may require a cushion that doesn’t exceed an amount equal to _________ of the total disbursements for the year.
1/6th (2 months)
Overages of ____ or more discovered in a borrower’s escrow account during the annual audit analysis must be refunded to the borrower (as long as the borrower is not delinquent). The refund must be made within ______.
$50 / 30 days
What are the 7 RESPA Disclosures?
- Know-Before-You-Owe Booklet (Home Loan Toolkit)
- Mortgage Servicing Disclosure Statement
- List of HUD Counselors
- AfBA Disclosure Form
- Initial Escrow Statement
- Annual Escrow Statement
- Servicing Transfer Statement.
(Note: the GFE/HUD are also RESPA disclosures – but only used with mobile homes, reverse mortgages, etc.).
The lender must provide the borrower with a list of 10 __________________.
HUD approved counselors
The Mortgage Servicing Disclosure statement _____ the same document as the Mortgage Servicing Transfer Statement.
is not
The Mortgage Servicing Disclosure is the standard form used to disclose to the borrower whether the lender intends to ______________________ of the loan. This must be delivered to the borrower at or within ______ of the loan application.
retain the mortgage servicing / 3 days
The Initial Escrow Statement itemizes the estimated ________, _____________ and _________________ “anticipated to be paid” from the Escrow Account during the loan’s first 12 months.
taxes / insurance premiums / escrow account charges
The _________________ is sometimes referred to as the Hello Letter.
Initial Escrow Statement
This ______________ is often referred to as a Goodbye Letter in the industry.
Servicing Transfer Disclosure
RESPA states that a _________________ is required if the loan servicer sells or assigns the servicing rights to a borrower’s loan to another loan servicer.
Servicing Transfer Statement
The ________________ is required to be provided to the borrower by the servicer no later than ______ BEFORE the servicing rights are transferred to the new servicer.
Servicing Transfer Disclosure / 15 days
According to the servicing transfer disclosure, there is a statutory ______ “grace period” during which any payment mistakenly made to the old servicer must be forwarded to the new servicer, and no late fee can be assessed.
60 day
Per RESPA, a complete application consists of the following 6 items:
- Subject property ADDRESS
- LOAN AMMOUNT
- Borrowers monthly INCOME
- ESTIMATED VALUE AMMOUNT
- Borrower NAME
- SSN
Per RESPA – if a borrower has submitted a complete application, the initial disclosures are “triggered” and must be provided to the borrower within ___________.
3 business days
If the application is withdrawn within the first _____ or the lender denied the application within the first _____, the initial disclosures are NOT required.
3 days / 3 days
The Home Loan Toolkit (Know Before You Owe booklet) is intended to help persons borrowing money to finance residential real estate better understand _________________________.
the nature and cost of real estate settlement services
The The Home Loan Toolkit (Know Before You Owe booklet) is for ____________ only.
purchases
A referring party must give the ____________________ Disclosure to the consumer (immediately) at the time of referral, or prior to loan consummation – if referring business where he/she has more than 1% interest in the referring business/service.
Affiliated Business Arrangement
The GFE and HUD are _____ disclosures, however the Loan Estimate and Closing Disclosure are ______ disclosures.
RESPA / TILA
The ______________ must be delivered 3 business days before loan consummation (doc signing) and a final ________________ must be delivered at the loan consummation (doc signing).
Closing Disclosure / Closing Disclosure
RESPA requires two disclosures that must be given at settlement: The ______________, and the ________________, which may be given within 45 days of closing.
Closing Disclosure / Initial Escrow Statement
___________________ occurs if the lender chooses the hazard insurance company when the borrower allows his policy to lapse.
Force-placed insurance
The ________________ combines the initial TILA disclosure and the GFE.
TRID Loan Estimate (LE)
The ________________ combines the final TILA disclosure and the HUD.
TRID Closing Disclosure (CD)
The Loan Estimate must be delivered or mailed no later than _____________ after a loan application is submitted.
3 business days
The terms on the loan estimate must be available for ____________.
10 business days
When it is necessary to provide a revised Loan Estimate, it must be provided within ____________ of receiving information sufficient to establish a valid change in circumstance. Documentation must be retained regarding the reason for the revision for __________.
3 business days / 3 years
The creditor must make sure that the revised Loan Estimate is received at least _________ prior to consummation of the mortgage loan.
4 business days
*remember, the soonest that a loan can close is 7 days – so 3 days + 4 days = 7 days
If the creditor places the revised loan estimate in the mail as a method of delivery, the creditor must mail the disclosure ___________ prior to consummation of the loan, to allow for the 3 business day receipt rule.
7 business days
A “valid changed circumstance” is defined under RESPA as:
- An Act of God, war, disaster or other emergency
- New information regarding the consumer, the loan or the property
- Information regarding the consumer’s qualification for the loan on which the originator relied in providing the LE that changes or is later found to be inaccurate
The following are NOT considered “valid changed circumstance” as defined under RESPA:
- Errors in disclosing an initial or subsequent LE
2. Delays in underwriting/checking in conditions, leading to locked extension fees
Changes in the ___, __________ or the addition of a ______________ trigger a revised Closing Disclosure and an additional 3 business day waiting period.
APR / loan product / prepayment penalty
When a consumer requests the cancellation of their escrow account, the lender must deliver an ______________ no later than _____________ before closure.
Escrow Closing Notice / 3 business days
Lenders must retain the Closing Disclosure and related documents for ______ after closing.
5 years
Lender must retain the Loan Estimate for _______ after closing.
3 years
The ________________ must be provided by the creditor prior to canceling an escrow account for any consumer who had one established by the creditor.
Escrow Closing Notice
Lender must retain the Escrow Cancellation Notice for _______ after loan consummation.
2 years
A ____________________ is found on the closing disclosure regarding the acceptance of partial mortgage payments by the loan services. The disclosure informs the consumer about the policy and the acceptance of payment less than the full amount due under the note.
partial payment policy disclosure
Lender must retain the Partial Payment Policy for ______ after loan consummation.
2 years
What items have a 10% tolerance between the Loan Estimate and the Closing Disclosure?
Fees that the lender chooses or identifies, such as government recording fees or title insurance.
What items have a NO tolerance limit between the Loan Estimate and the Closing Disclosure?
Fees for services that the owners choose for themselves, such as:
- Hazard insurance
- Title insurance (if the homeowners don’t choose one of the lender-identified selections)
- Fees that are paid per diem (pre-paid mortgage interest)
The lender has _________ after the closing to refund to the borrower any portion of the charges that exceeded the acceptable amount of a stated tolerance level.
60 business days
___________________ and ____________ trigger a new Closing Disclosure that must be delivered within 60 calendar days following loan consumption.
Non-numeric clerical errors / tolerance violations
Closing costs greater than Loan Estimate are considered to be __________________.
not made in good faith
Closing costs less than Loan Estimate are considered to be ____________.
in good faith
TRID rules do not apply to _______, ___________ and mortgages for _____________________.
HELOCS / reverse mortgages / mobile homes not secured by real estate
The Rate Lock information is ONLY found on the ________________.
Loan Estimate form
Although mortgage brokers may provide the loan estimate to the borrower, the _________ is ultimately responsible for the delivery.
creditor
As it relates to the Loan Estimate, a business day is any day in which the creditor is ____________________________. (Note this difference from the definition of a business day for the Closing Disclosure)
open to the public for the purpose of conducting regular business activities
No fee (with the exception of a bona fide and reasonable credit report fee) may be received by the MLO or creditor until the borrower has ____________________.
received the Loan Estimate
The penalty for violating RESPA is _________ and/or up to ___________.
$10,000 / 1 year in jail
The main purpose of RESPA is to help consumers become ___________________.
better shoppers for settlement services
What does RESPA consider settlement services?
- title searches
- title examinations
- title insurance
- attorney services
- preparation of documents
- surveys
- credit reports
- appraisals
- pest inspections
- real estate services
- loan origination
- processing mortgages
- closing or settling mortgages
