RESPA (Real Estate Settlement Procedures Act) - Regulation X

Question 1

The Real Estate Settlement Procedures Act (RESPA) provides protection for loans on what kind of properties?

Answer 1

Residential Properties (1-4 units)

Question 2

Nothing of value can be given in exchange for ________ with the exception of real estate brokerage firms that are allowed to exchange referrals between themselves.

Answer 2

in exchange for the referral of business

Question 3

RESPA is what regulation?

Answer 3

Regulation X or Reg X

Question 4

What regulation is primary involved with the disclosure of closing costs and the prevention of kicks backs, which may raise the amount of closing costs to the consumer?

Answer 4

RESPA - Regulation X

Question 5

Who enforces the RESPA regulations? Hint: HUD was the previous enforcer.

Answer 5

CFPB - Consumer Financial Protection Bureau

Question 6

RESPA does not apply to loans secured by what kind of properties?

Answer 6

Commercial properties

Question 7

RESPA does not apply to ______ (unless a dwelling is intended to be constructed on the land within two years).

Answer 7

vacant land aka “raw land”

Question 8

RESPA does not apply to properties containing ____ or more acres (know as agricultural property).

Answer 8

25 or more acres

Question 9

RESPA does not apply to temporary financing. What are two examples of temporary financing?

Answer 9

1. Bridge loans

2. Construction loans

Question 10

What regulation deals with the mortgage servicer and mortgager servicing abuses?

Answer 10

RESPA - Section 6

Question 11

A ______ is the company that collects monthly mortgage payments, pays taxes, insurance, and other items as they come due, and notified the borrower of late payments.

Answer 11

A mortgage servicer

Question 12

Homeowners who are having issues with their mortgage servicers may take advantage of a provision of RESPA whereby a borrower many request information relating to the servicing of a loan. It is called a __________ and imposes a duty to respond to borrowers’ inquiries.

Answer 12

Qualified Written Request or QWR

Question 13

A Qualified Written Request (QWR) requires that the lender acknowledge receipt of the request within how many business days?

And seeks to resolve the issue/concern within how many days?

Answer 13

5 business days

within 30 days (with a 15 day extension if needed)

Question 14

What regulation mandates a creditor to provide a monthly statement to a consumer?

Answer 14

RESPA - Section 6 (Regulation X)

Question 15

What regulation states that creditors must promptly post a payment the DAY it is received?

Answer 15

RESPA - Section 6 (Regulation X)

Question 16

What regulation requires creditors to respond to a payoff request within seven (7) business days?

Answer 16

RESPA - Section 6 (Regulation X)

Question 17

What regulation requires creditors to make a disclosure to the consumer 30 and 45 days prior to billing for force-placed insurance?

Answer 17

RESPA - Section 6 (Regulation X)

Question 18

What regulation states that creditors must resolve written consumer complaints within 30 to 45 days of written receipt?

Answer 18

RESPA - Section 6 (Regulation X)

Question 19

RESPA Section 6 states that the lender must attempt to establish live contact within _____ days with a borrower who has missed a mortgage payment.

Answer 19

within 36 days

Question 20

RESPA Section 6 states that a creditor must provide a borrower with mortgage workout options to the borrower within _____ days of a missed payment

Answer 20

within 45 days

Question 21

What are examples of mortgage workout options?

Answer 21

Loan Modification
Forbearance
Short Sale

Question 22

RESPA Section 6 states a creditor must notify a borrower within _____ days after submission of a complete loan workout application if there is an option to save the home.

Answer 22

within 30 days

Question 23

According to RESPA Section 6 a creditor may not seek judicial foreclosure or a trustee’s sale action for at least how many days for a borrower who is delinquent

Answer 23

120 days

Question 24

What is dual tracking? Hint: it is prohibited under RESPA Section 6.

Answer 24

Dual tracking is continuing to seek foreclosure actions while the borrower is being considered for other workout options.

Question 25

What regulation prohibits kickbacks, face splitting and unearned fees? Unearned fees are also known as advanced fees or upfront fees.

Answer 25

RESPA - Section 8 (Regulation X)

Question 26

Illegal referral fees are also known as what?

Answer 26

Kickbacks

Question 27

RESPA Section 8 prohibits giving or accepting a _______ in exchange for the referral of settlement services.

Answer 27

a thing of value

Question 28

Despite prohibiting kickbacks, what regulation does NOT prohibit payment of Fair market value for goods or services that were actually received or performed.

Answer 28

RESPA Section 8 (Regulation X)

Question 29

A ________ may include gift cards, sports ticket, advertising space or marketing material bearing a real estate agent information to give to his or her client.

Answer 29

thing of value

Question 30

Promotional items with what ARE permitted under REPSA?

Answer 30

promotional items with a company’s logo

Question 31

RESPA Section 9 prohibits the seller from requiring the buyer to use a ___________ as a condition of the sale, unless the seller pays for the title insurance and all other title related fees.

Answer 31

a particular title company

Question 32

If RESPA Section 9 is violated, the seller could be sued for ___________ , the amount paid for the service.

Answer 32

3 times and/or treble damages

Question 33

What regulation requires lenders to conduct an annual escrow analysis if the account has impounds? (escrow account/reserve account)

Answer 33

RESPA Section 10 (Regulation X)

Question 34

The ______ ______ analysis summarizes the activity in the impound account.

Answer 34

annual escrow analysis

Question 35

What regulation states that the lender can take no more than 1/12th of the annual amount of the property taxes and insurance premium for the purpose of the escrow account?

Answer 35

RESPA Section 10 (Regulation X)

Question 36

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). This refund must be made within how many days?

Answer 36

Overages of $50 or more

within 30 days

Question 37

RESPA disclosures include what?

Answer 37

1. Know-Before—You-Owe (aka Home Loan Toolkit)
2. Mortgage Servicing Disclosure Statement
3. List of HUD counselors
4. AfBA Disclosure form
5. Initial Escrow Statement
6. Annual Escrow Statement
7. Servicing Transfer Statement

Question 38

What RESPA disclosures are used with mobile homes and reverse mortgages specifically?

Answer 38

The GFE/HUD

Question 39

How many HUD approved counselors must the lender list and provide to the borrower?

Answer 39

10 (ten)

Question 40

The Mortgage Servicing Disclosure statement is not the same document as the STS. What does STS stand for?

Answer 40

STS is Servicing Transfer Statement

Question 41

What disclosure is the standard form used to disclose to the borrower when the lender intends to retain the mortgage servicing of the loan (handling the monthly payments and paying the taxes and insurance obligations). this must be delivered to the borrower at or within three days of the loan application.

Answer 41

Mortgage Servicing Disclosure

Question 42

This itemizes the estimated taxes, insurance premiums and escrow account charges “anticipated to bbe paid” from the escrow account during the loans first 12 months. Usually given at settlement but the lender has 45 days from settlement to deliver. This is sometimes referred to as the “Hello Letter”. What is the document called?

Answer 42

The Initial Escrow Statement

Question 43

The Servicing Transfer Disclosure is often referred to as a what? The new servicer is also required to send the borrower a notice known as the “welcome” letter AKA a hello letter.

Answer 43

Goodbye Letter

Question 44

RESPA states that a Servicing Transfer Statement is required if the loan servicer sells or assigns the _______ to a borrowers loan to another loan servicer.

Answer 44

assigns the servicing rights

Question 45

The Servicing Transfer Disclosure is required to be provided to the borrower by the servicer no later than how many days BEFORE the servicing rights are transferred to the new servicer?

Answer 45

15 days

Question 46

According to the Servicing Transfer Disclosure, there is a statutory grace period of _______ during which any payment mistakenly made to the old servicer must be forwarded to the new servicer, and no late fee can be assessed.

Answer 46

60-day “grace period”

Question 47

Per RESPA, a complete application consists of what six (6) items?

Answer 47

1. Borrower Name
2. Social Security Number
3. Subject Property Address
4. Borrower’s monthly income
5. Estimate value you amount (of the home)
6. The loan amount

Question 48

Per RESPA - if a borrower has submitted a complete application, the initial disclosures are triggered and must be provided to the borrower within how many days?

Answer 48

3 days

Question 49

If the application is withdrawn in the first three days, or the lender denied the application within the first three day, what is not required to be issued to the borrower?

Answer 49

Initial Disclosures are not required.

Question 50

The Home Loan Toolkit / Know Before You Owe booklet (purchases only required by RESPA), HUD Special Information booklet (non-purchase loans), Affiliate Business Arrangement Disclosure, Loan Estimate and/or GFE if applicable, Mortgage Servicing Disclosure Statement and a list of HUD Counselors are included in what?

Answer 50

These are the Initial Disclosures

Question 51

This is intended to help persons borrowing money to finance residential real estate to better understand the nature and cost of real estate settlement services. It must be delivered at or within three days of the loan application for consumers looking to purchase a property. This is for purchase transactions only. What am I referring to?

Answer 51

The Home Loan Toolkit aka Know Before You Owe booklet

Question 52

A referring party must give what disclosure to the consumer immediately at the time of referral, or prior to loan consummation - if referring business where he or she has more than 1% interest in the referring business or service.

Answer 52

the Affiliated Business Arrangement Disclosure

Question 53

For mortgage transactions, the GFE and the HUD have been replaced by two forms called the ________ and ________.

Answer 53

Loan Estimate

Closing Disclosure

Question 54

Although the GFE and the HUD were replaced with the Loan Estimate and the Closing Disclosure for mortgage transactions, the GFE and the HUD will continue to be provided for __________, ____________, __________________________.

Answer 54

HELOCS (Home Equity Line of Credit)
Reverse Mortgages
Loans securing mobile homes where the owner will not also own the land which the mobile home resides.

Question 55

Although the GFE and the HUD were replaced with the Loan Estimate and the Closing Disclosure for mortgage transactions, the GFE and the HUD will continue to be provided for mobile homes under a certain circumstance. What is the circumstance?

Answer 55

Loans securing mobile homes where the owner will not also own the land which the mobile home resides.

Question 56

The GFE and the HUD are what kind of disclosures?

Answer 56

RESPA disclosures

Question 57

What two disclosures are referred to as RESPA disclosures?

Answer 57

The GFE and the HUD.

Question 58

The Loan Estimate and Closing Disclosure are what type of disclosures?

Answer 58

TILA disclosures

Question 60

What two documents are considered TILA disclosures?

Answer 60

The Loan Estimate and Closing Disclosure

Question 60

Who created TILA

Answer 60

The Federal Reserve

Question 61

Who enforces the Gram Leech Bliley Act

Answer 61

FCC

Question 62

What is another way of saying loan consummation?

Answer 62

loan signing

Question 63

When must the Closing Disclosure be delivered?

Answer 63

3 business days before the loan consummation/loan signing

Question 64

When is the final Closing Disclosure delivered?

Answer 64

At loan signing/loan consummation

Question 65

RESPA requires that two disclosures be given at settlement. What are they?

Answer 65

The Closing Disclosure (CD) and the Initial Escrow Statement

Question 66

RESPA requires the Closing Disclosure (CD) and the Initial Escrow Statement be given at settlement. Which of the two disclosures can be given within 45 days of closing?

Answer 66

Initial Escrow Statement

Question 67

When there is no federally-related loan or no closing costs to the borrower or for most close-end loans, what disclosure is NOT required?

Answer 67

Closing Disclosure (CD)

Question 68

Forced-placed insurance occurs when?

Answer 68

If the lender chooses the hazard insurance company when the borrower allows his policy to lapse.

Question 69

If the lender chooses the hazard insurance company when the borrower allows his policy to lapse, what is this called?

Answer 69

Force-placed insurance

Question 70

The TRID Loan Estimate (LE) combines what two disclosures?

Answer 70

The initial TILA disclosure and the GFE

Question 71

The initial TILA disclosure and the GFE are combined to make what?

Answer 71

The TRID Loan Estimate (LE)

Question 72

The TRID Closing Disclosure (CD) combines what two disclosures?

Answer 72

The final TILA disclosure and the HUD

Question 73

The final TILA disclosure and the HUD are combined to make what disclosure?

Answer 73

The TRID Closing Disclosure

Question 74

The Loan Estimate must be delivered OR mailed no less than how many business days AFTER a loan application is submitted?

Answer 74

3 business days

Question 75

The terms on the Loan Estimate (LE) must be available for how many business days?

Answer 75

10 business days

Question 76

The terms on the Loan Estimate must be available for 10 business days. What is not included?

Answer 76

The interest rate is not included

Question 77

When it is necessary to provide a revised Loan Estimate, it must be provided within how many business days of receiving information sufficient to establish a valid change in circumstance?

Answer 77

3 business days

Question 78

When it is necessary to provide a revised Loan Estimate, it must be provided within 3 business days of receiving information sufficient to establish a valid change in circumstance. Documentation must be retained regarding the reason for the revision for how long?

Answer 78

three (3) years

Question 79

The creditor must make sure that the revised Loan Estimate is received at least how many business days prior to consummation of the mortgage loan? Remember consummation also stands for closing.

Answer 79

At least four (4) business days

Question 80

What is the soonest that a loan can close?

Answer 80

seven (7) days

3 days + 4 days = 7 days

Question 81

Once a borrower receives the Closing Disclosure, a new Loan Estimate cannot be issued. If there is a valid change of circumstance that occurs after the Closing Disclosure has been delivered, the borrower is to receive a revised what?

Answer 81

A revised Closing Disclosure

Question 82

A “valid changed circumstance” is defined under RESPA as: __________ ______________ and ____________.

Answer 82

1. An Act of God, war, disaster or other emergency
2. New information regarding the consumer, the loan or the property
3. Information regarding the consumers qualification for the loan on which the originator relied in providing the LE that changes or is later found to be inaccurate

Question 83

What are not considered “valid changed circumstance” as defined under RESPA?

Answer 83

Errors in disclosing and initial or subsequent LE or delays in underwriting/checking in conditions, leading to lock extension fees.

Question 84

Examples of Change Circumstances could include:

Answer 84

1. Interest rate lock
2. appraised value comes in lower than expected, creating a pricing adjustment for higher LTV
3. Loan program is flipped from Conventional to FHA, adding UFMIP
4. Consumer’s credit score drops, resulting in a pricing increase
5. Consumer requests a change in loan amount, interest rate, loan program or terms, leading to an increase in settlement costs.
6. Seller delay in short sale approval

Question 85

What is UFMIP?

Answer 85

Up Front Mortgage Insurance Premium

Question 86

what loan program requires UFMIP?

Answer 86

FHA

Question 87

Changes in the APR, loan product or the addition of a prepayment penalty, trigger a revised __________ and an additional 3 business day waiting period?

Answer 87

revised Closing Disclosure

Question 88

When a consumer requests the cancellation of their escrow account, the lender must deliver what kind of notice no later than three business days before closure?

Answer 88

An Escrow Closing Notice

Question 89

When is an Escrow Closing Notice supplied to a consumer?

Answer 89

No later than 3 business days after the consumer requests the cancellation of their escrow account.

Question 90

If the escrow account is closed for some other reason except for default or termination caused by refinancing, repayment or rescission, the notice must be sent how many business days prior to the closure/consummation?

Answer 90

The notice must be sent 30 business days prior to closure of the escrow account.

Question 91

How long must lenders retain the Closing Disclosure and related documents after closing?

Answer 91

5 years

Question 92

How long must lenders retain the Loan Estimate after closing?

Answer 92

3 years

Question 93

When must the Escrow Closing Notice be provided?

Answer 93

It must be provided by the creditor prior to cancelling an escrow account for any consumer who had one established by the creditor.

Question 94

Regarding the Escrow Closing Notice, if the consumer requests the closure, the notice must be received at least how many business days before the consumers escrow account is closed?

Answer 94

at least three (3) business days before the consumers escrow account is closed

Question 95

Regarding the Escrow Closing Notice, if the consumer requests the closure, the notice must be received at least three (3) business days before the consumers escrow account is closed. IF the escrow is closed for any other reason, the creditor is required to provide the notice within how many business days?

Answer 95

within 30 business days

Question 96

How long must a lender retain the Escrow Cancellation Notice after loan consummation / closing?

Answer 96

2 years

Question 97

A Partial Payment Policy disclosure is found on the ______ ________ regarding the acceptance of partial mortgage payments by the loan servicer. The disclosure informs the consumer about the policy and the acceptance of payment less than the full amount due under the note.

Answer 97

Closing Disclosure

Question 98

How long must a lender retain the Partial Payment Policy after loan consummation / closing?

Answer 98

2 years

Question 99

A Tolerance is how much of a change a particular item can “tolerate” between the ______ and the ______, before it’s in violation of the law.

Answer 99

the Loan Estimate (LE) and the Closing Disclosure (CD)

Question 100

When referring to Tolerance there are three different types and or levels, what are they?

Answer 100

Zero Tolerance
10% Tolerance
No Limit

Question 101

Real estate transfer taxes, loan origination fees and interest rate have what type of tolerance? Note: Other items subject to this tolerance may also include the appraisal and credit report.

Answer 101

Zero Tolerance

Question 102

Fees that the lender chooses or identifies, such as government recording fees, and title insurance are subject to what tolerance? Additionally, these items cannot vary by more than what percentage between the loan estimate and the closing disclosure?

Answer 102

10% Tolerance

10%

Question 103

Fees for services that the owners choose for themselves, such as hazard insurance, title insurance, and fees that are paid per diem (pre-paid mortgage interest) are subject to what tolerance limit?

Answer 103

NO tolerance limit

Question 104

The lender has how many business days after the closing to refund the borrower any portion of the charges that exceeded the acceptable amount of a stated tolerance level?

Answer 104

60 business days

Question 105

Non-numeric clerical errors and tolerance violations trigger a new Closing Disclosure that must be delivered within how many calendar days following loan consummation / closing?

Answer 105

60 calendar days

Question 106

A Closing Disclosure tolerance refund must be sent within how many days?

Answer 106

60 days

Question 107

Closing costs greater than the loan estimate were or were not made in good faith?

Answer 107

Not made in good faith

Question 108

Closing costs less than the loan estimate were or were not acted in good faith?

Answer 108

Were acted in good faith

Question 109

TRID rules do NOT apply to what types of loans?

Answer 109

Reverse mortgages
Mortgages for mobile homes not secured by real estate
HELOC’s

Question 110

There is only one document that reflects the rate lock information. What am I referring to?

Answer 110

Loan Estimate (LE)

Question 111

Although mortgage brokers may provide the Loan Estimate to the borrower, who is ultimately responsible for the delivery?

Answer 111

The creditor (the lender who is providing the financing)

Question 112

As it relates to the Loan Estimate (LE) a business day is what?

Answer 112

A business day is any day in which the creditor is open to the public for the purpose of conducting regular business activities.

Question 113

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 what?

Answer 113

The Loan Estimate (LE)

Question 114

What is the penalty for violating RESPA?

Answer 114

$10,000 and/or up to 1 year in jail

Question 115

The main purpose of RESPA is to help consumers become better shoppers for _________ ?

Answer 115

Settlement Services

Question 116

RESPA considers the following as _____________: title searches, title examinations, title insurance, attorney services, preparation of documents, surveys, credit reports, appraisals, pest inspections, real estate services, loan origination, processing mortgages and closing or settlement charges.

Answer 116

Settlement Services

Question 117

RESPA considers settlement services as:

Answer 117

Title searches, title examinations, title insurance, attorney services, preparation of documents, surveys, credit reports, appraisals, pest inspections, real estate services, loan origination, processing mortgages and closing or settlement charges.