Which of the following is subject to Real Estate Settlement Procedures Act?

What is subject to 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.

Which of the following loans is exempt from the Real Estate Settlement Procedures Act?

Exemptions (§3500.5(b))

There are several situations in which coverage of RESPA is not extended. These exemptions include: Twenty-five acres or more: A loan on property of 25 acres or more is exempt. Business purpose loans: Extensions of credit primarily for business, commercial, or agricultural use are exempt.

What is the primary purpose of 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. RESPA was signed into law in December 1974, and became effective on June 20, 1975.

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Which act regulates the closing procedures in a real estate transaction?

The Real Estate Settlement Procedures Act (or RESPA) is a federal regulation that governs certain aspects of the closing and settlement process in a real estate transaction. Designed to protect consumers who are buying houses, the U.S. Department of Housing & Urban Development (HUD) enforces RESPA.

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.

Which of the following is a disclosure that must be provided before settlement?

Disclosures Before Settlement

Another required disclosure before settlement is the HUD-1 Settlement Statement. This is a form that lists all fees that will be charged to the borrower and the seller at closing. The borrower may review the HUD-1 Settlement Statement one day before closing.

What types of loans are exempt from Trid?

Loans Not Covered by TRID

  • Home-equity lines of credit.
  • Reverse mortgages.
  • Mortgages secured by a mobile home or dwelling not attached to land.
  • No-interest second mortgage made for down payment assistance, energy efficiency or foreclosure avoidance.
  • Loans made by a creditor who makes five or fewer mortgages in a year.

What transactions are exempt from RESPA?

Transactions generally not covered under RESPA include: “an all cash sale, a sale where the individual home seller takes back the mortgage, a rental property transaction or other business purpose transaction.”

What is Reg Z in lending?

Regulation Z prohibits certain practices relating to payments made to compensate mortgage brokers and other loan originators. The goal of the amendments is to protect consumers in the mortgage market from unfair practices involving compensation paid to loan originators.

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What types of fees and conditions are prohibited under RESPA?

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.

What types of loans does RESPA apply to?

The RESPA statute covers mortgage loans on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit.

What is the safe act in real estate?

The SAFE Mortgage Licensing Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators and for the Conference of State Bank Supervisors (CSBS) and the American Association of …