Section 4 Mortgage Law & Regulations/ Chapter 1

Question 1

Settlement Cost

Answer 1

The cost associated with the purchase of a home.

Question 2

RESPA

Answer 2

Real Estate Settlement Procedures Act
Passed by Congress in 1974, was first enforced by the U.S. Department of Housing and Urban Development but since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, it is now enforced by the Consumer Financial Protection Bureau. (CFPB)
- Regulation X

Question 3

Purpose of RESPA

Answer 3

> Allow consumer to shop for settlement services
To prohibit kickbacks, finder fees, and referral fees
To place limits on escrow fees
To prohibit sellers from requiring to use a certain title company as a condition in the purchase agreement

Question 4

RESPA applies to

Answer 4

Federally related mortgage loans consisting of 1-4 unit properties. As well as

> loans insured or guaranteed by the federal government
Lenders who have federal insurance on their deposits (Banks, Credit Unions, and Savings and Loan Association
Loans sold to Fan or Fred

Question 5

RESPA also covers

Answer 5

> Loans to refinance properties of 1-4 unit
Senior loans (first mortgages)
Subordinated Loans (Second Mortgages)

Question 6

Loans NOT covered by RESPA include

Answer 6

> All cash purchases
Loans where seller finances the purchase (because not a federally related lender)
Short Term loans ( Construction Loans)
Loans for business, commercial or agricultural purposes
Loans on vacant land unless future of building a home
Loans on a parcel of 25 acres or more