Real Estate Settlement Procedures Act Exam Study Guide Solutions
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Course
RESPA
Institution
RESPA
Real Estate Settlement Procedures Act
Exam Study Guide Solutions
RESPA purpose - ANSWER-Real Estate Settlement Procedures Act Regulation X 1974
Allows consumers to obtain information on the costs of closing so that they can shop for settlement
services.
RESPA Covers - ANSWER-Most realestate tr...
Loans for business, commercial, or agricultural purposes
Temporary financing, such as bridge loans
Loans secured by vacant land.
Section 10 RESPA - ANSWER✔✔-protects consumers by ensuring that borrowers know the amount of
funds deposited in escrow accounts and by preventing lenders from overcharging borrowers for escrow
deposits.
Violations of Section 10 Penalties - ANSWER✔✔-can result in a civil penalty of $75, with a limitation of
$130,000 on the penalty imposed on one servicer for violations occurring within a consecutive 12-month
period. However, if a loan servicer intentionally disregards the requirements of Section 10, penalties are
$110 for each violation, with no limit on the total amount of the penalty.
The Initial Escrow Statement - ANSWER✔✔-Required by RESPA and due 45 days after closing, this
disclosure is often provided at the time of closing. The initial escrow statement provides an estimate of
escrow payments (taxes, insurance, etc.) that will be required in the first 12 months of the loan.
Annual Escrow Statement - ANSWER✔✔-Required by RESPA, this disclosure on the amounts needed to
cover escrow disbursements is due annually
Section 6 - ANSWER✔✔-Ensure that borrowers have adequate notice when their loan servicing is
transferred to another institution
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