RESPA Flashcards
What is the purpose of RESPA?
To ensure that consumers can make informed decisions about real estate transactions by understanding the cost for settlement.
What does RESPA stand for?
Real Estate Settlement Procedure Act
What is RESPA also known as?
Regulation X/Real Estate Settlement Procedure Act
What does RESPA govern?
It governs all federally-regulated mortgage loans that are secured by residential property.
What does RESPA NOT govern?
It does not govern loans on residential property of more than 25-acres, loans for income producing properties like Farms or Commercial buildings like office buildings or store fronts, temporary loans such as construction and bridge loans, and if the property has a business purpose its SAFE to assume the loan is not governed by RESPA.
What is RESPA?
A federal law that governs the oversight of costs associated with mortgage and the entire real estate transaction.
What are the 4 main Sections of RESPA in regards to the Mortgage industry?
Section 6, 8, 9, and 10.
What is Section 6 and what is its purpose?
Section 6 is Servicing and the purpose is to require servicers to set specific policies and procedures within their organization in order to meet certain RESPA-required objectives.
What is objective 1 of Section 6?
Objective 1 is to provide timely and accurate information in relation to an information request, complaint, foreclosure process, or death of a borrower. Ensure that borrowers are well informed about procedures for submitting error notices and requests for information.
What is objective 2 of Section 6?
Properly oversee and ensure compliance of all employees with relation to procedures and laws. Certain procedures must be followed with relation to a borrower’s escrow account and/or hazard insurance policy.
What is objective 3 of Section 6?
Properly process and evaluate loss mitigation applications. Follow proper regulations with regards to the pre-foreclosure process.
What is objective 4 of Section 6?
Ensure that necessary information about probable or actual transfer of servicing are disclosed, and ensure that all the documentation is transferred during actual servicing transfer situations.
Who governs RESPA?
Consumer Financial Protection Bureau(CFPB)
What is Section 8 and what is its purpose?
Section 8 is Referrals and the purpose is to outlaw circumstances in which their is a payment or offer of value in exchange for a referral.
When might there be an exception to Section 8?
The only exception is for MLO’s who work for the same company.
For instance you have a client that you just helped get a mortgage and loved their experience so now they want to refinance their other home, however, you are not licensed in the state of their other home. You can refer the customer to another MLO in your company that can help her and accept a fee for it.
