What is one protection afforded consumers under the Real Estate Settlement Procedures Act?

The Real Estate Settlement Procedures Act (RESPA) provides consumers with improved disclosures of settlement costs and to reduce the costs of closing by the elimination of referral fees and kickbacks.

What is one protection afforded consumers under RESPA?

RESPA’s Consumer Protections and Prohibited Practices

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or anything of value in exchange for referrals of settlement service business involving a federally related mortgage loan.

What protections does RESPA?

RESPA outlaws kickbacks, referral fees, and unearned fees, prohibits sellers from requiring borrowers to purchase title insurance from specific companies, and does not allow loan servicers to require excessively large escrow accounts.

What is the purpose of the Real Estate Settlement Procedures Act?

The act requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. The act also prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts.

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What is the Real Estate Settlement Procedures Act quizlet?

allow consumers to obtain information on the costs of closing so that they can shop for settlement servicers and protect consumers from excessive settlement costs and unearned fees through mandatory disclosure requirements and established prohibited practices.

What are the 6 RESPA triggers?

The six items are the consumer’s name, income and social security number (to obtain a credit report), the property’s address, an estimate of property’s value and the loan amount sought.

What is the purpose of RESPA quizlet?

What is the purpose of RESPA? To protect consumers by regulating COST and business DISCLOSURES. RESPA provides consumers with the opportunity to shop for their best possible mortgage solution.

What are RESPA disclosures?

RESPA requires that borrowers receive disclosures at various times in the transaction process. … A Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution.

What is a kickback under RESPA?

Other forms of kickbacks illegal under RESPA include gifts, prizes and entries into raffles designed to reward agents for referring business, for example, to a title insurance company, surveyor or attorney.

What type of law is RESPA?

First passed in 1974, the Real Estate Settlement Procedures Act (RESPA) is a federal statute regulated first by the U.S. Department of Housing and Urban Development (HUD) and now by the Consumer Financial Protection Bueau (CFPB) to govern the real estate settlement process by mandating all parties fully inform …

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What is a real estate settlement?

Also referred to as a ‘real estate settlement,’ the closing on a home is the final step before the buyer receives the keys, documents get recorded and proceeds disbursed.

What is the purpose of TILA?

The Truth in Lending Act (TILA) is implemented by the Board’s Regulation Z (12 CFR Part 226). A principal purpose of TILA is to promote the informed use of consumer credit by requiring disclosures about its terms and cost.

What is a real estate settlement service?

Settlement Services means the provision of title, closing, escrow or search-related services for residential real estate transactions and all other mortgage-related transactions (including, without limitation, first mortgage loans, second mortgage loans, home equity lines of credit, other home equity loans and …

Which disclosure is required by the Real Estate Settlement Procedures Act quizlet?

The Real Estate Settlement Procedures Act does require that the applicant be given the Servicing Disclosure Statement at application or within three days of application. It also requires that the Good Faith Estimate be given at application or within 3 days of application.

Which lender’s act is prohibited under RESPA Section 8 quizlet?

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or anything of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.

Which loan is covered by the Real Estate Settlement Procedures Act RESPA )?

RESPA applies to the majority of purchase loans, refinances, property improvement loans, and equity lines of credit. RESPA requires lenders, mortgage brokers, or servicers of home loans to provide disclosures to borrowers concerning real estate transactions, settlement services, and consumer protection laws.

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