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Real Estate Settlement Procedures Act
Terms in this set (12)
what's the purpose of respa?
help consumers become better shoppers for settlement services (escrow stuff)
what does respa cover?
1-4 unit residential property (owner occupied)
what doesn't respa cover?
all cash sales, rental properties with more than 4 units, commercial (business) property & agricultural property (more than 25 acres of land)
what's the maximum punishment for violating respa?
$10,000 fine and/or imprisonment up to one year
section 6 of respa
designed to address servicers' obligation to correct errors and work with home buyers if payments are not being made
who are servicers?
companies (sometimes outside of loan/mortgage companies) that collect payments, pay taxes/insurance, handle late fees and stuff along those lines
section 8 of respa
Prohibits kickback fees fee splitting and unearned fees, it prohibits giving or accepting "thing of value" in exchange for referrals of settlement service business, and prohibits upfront payments. if someone sends you stuff with your name on it it's a violation
section 9 of respa
deals with title insurance: under respa it's illegal for a property to use a particular title insurance company, either directly or indirectly, as a condition of sale unless the seller pays for the title insurance and all other title-related fees. allows buyers to sue for an amount equal to three times (treble damages) all charged made for the title insurance.
section 10 respa
Deals with Escrow (Impound/Reserve) Accounts. Section 10 sets limits on the amounts that a lender may require a borrower to put into an escrow account for purposes of paying taxes, hazard insurance, and other related charges.
- Each month-lenders may require borrowers to pay into the escrow account no more than 1/12thof annual disbursement.
- At closing -allows cushionof 2 months (1/6ththe annual amount).Requiresannual escrow analysis.
- If there is any overage -Return excess over $50to consumer (if borrower is not delinquent)
what are the initial 6 items needed for a creditor to make a credit decision?
Name of borrower, SSN for each borrower, gross monthly income of borrower(s), loan amount sought, address of subject property, estimate of property value
once a complete application is obtained and the borrower has indicated their intent to proceed initial disclosures must be provided unless:
the applicant withdraws the application or the lender turns down the loan before the 3 day business period ends
what does trid stand for?
TILA-RESPA Integrated Disclosure
THIS SET IS OFTEN IN FOLDERS WITH...
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