1
Q
- The Real Estate Settlement Procedures Act (RESPA) provides consumer protection for loans on ______________.
A
residential properties (1-4 units).
2
Q
- Nothing of value can be given in _____________ with the exception of __________ that are allowed to exchange referrals between themselves.
A
exchange for the referral of business, real estate brokerage firms
3
Q
- RESPA (Regulation X) is primarily involved with ________________.
A
the disclosure of closing costs and the prevention of kickbacks, which may raise the amount of closing costs to the consumer.
4
Q
- The ______________ enforces the RESPA regulations. _____ was the previous enforcer.
A
Consumer Financial Protection Bureau, HUD
5
Q
- RESPA does NOT apply to loans secured by __________.
A
commercial properties.
6
Q
- RESPA does NOT apply to vacant land (UNLESS ___________________________).
A
A dwelling is intended to be constructed on the land within two years
7
Q
- RESPA does NOT apply to properties containing ___ or more acres ( _______ property).
A
25, agricultural
8
Q
- RESPA does not apply to temporary financing, such as _________________________.
A
bridge loans and construction loans.
9
Q
- RESPA Section _______ deals with the mortgage servicer and mortgage servicing abuses.
A
6
10
Q
- RESPA Section 6 deals with the __________________.
A
mortgage servicer and mortgage servicing abuses.
11
Q
- A ___________ is the company that collects monthly mortgage payments, pays taxes, insurance, and other items as they come due, and notifies the borrower of late payments.
A
mortgage servicer
12
Q
- Homeowners who are having issues with their mortgage servicers may take advantage of a provision of RESPA whereby a borrower may request information relating to the servicing of a loan. It is called a ____________________.
A
Qualified Written Request, or “QWR,” and imposes a duty to respond to borrowers’ inquiries.
13
Q
What is a Qualified Written Request (QWR)?
A
Qualified Written Request (QWR) - Homeowners who are having issues with their mortgage servicers may take advantage of a provision of RESPA whereby a borrower may request information relating to the servicing of a loan. It is called a Qualified Written Request, or “QWR,” and imposes a duty to respond to borrowers’ inquiries.
14
Q
- What section of RESPA mandates a creditor to provide a monthly statement to a consumer?
A
Section 6
15
Q
What section of RESPA states that creditors must promptly post a payment the day it is received?
A
Section 6
16
Q
- What Section of RESPA requires creditors to respond to a payoff request within seven (7) business days?
A
Section 6
17
Q
- RESPA Section 6 requires creditors to respond to a payoff request within _____ business days.
A
seven (7)
18
Q
- RESPA Section 6 requires creditors to make disclosure to the consumer ___ and ___ days prior to billing for force-placed insurance.
A
30 and 45
19
Q
- RESPA Section 6 states that creditors must resolve written consumer complaints within ____ days of written receipt.
A
30-45
20
Q
- RESPA Section 6 states that the lender must attempt to establish live contact with in ___ days with a borrower who has missed a mortgage payment
A
36
21
Q
- RESPA Section 6 states that a creditor must provide a borrower with mortgage workout options (loan modification/forbearance options/short sale options, etc.) to the borrower within ___ days of a missed payment.
A
45
22
Q
- RESPA Section 6 A creditor must notify a borrower within ___ days after submission of a complete loan workout application if there is an option to _______.
A
30, save the home.
23
Q
- According to RESPA Section 6 a creditor may NOT seek judicial foreclosure or a trustee’s sale action for at least ___ days for a borrower who is delinquent.
A
120
24
Q
- RESPA Section 6 prohibits __________, which is continuing to seek foreclosure actions while the borrower is being considered for other workout options.
A
dual tracking
25
24. RESPA Section ___ prohibits kickbacks, fee splitting and unearned fees. Unearned fees are also known as advance fees or upfront fees.
8
26
25. Illegal referral fees are known as ________.
Kickbacks
27
26. RESPA Section 8 prohibits giving or accepting a _________ in exchange for the referral of _________.
“thing of value”, settlement services.
28
27. Despite prohibiting kickbacks, RESPA does NOT prohibit payment of fair market value for ____________________________.
goods or services that were received or performed.
29
28. A “thing of value” may include what?
gift cards, sports ticket, advertising space, marketing material bearing a real estate agent’s information to give to his/her client, etc.
30
What is the only exception to RESPA section 8 that can be given or accepted?
Promotional items (with company logo) are permitted
31
30. RESPA Section 9 prohibits the seller from requiring the buyer to use a ___________, as a condition of the sale, unless the seller pays for the title insurance and all other title-related fees.
particular title company
32
31. If RESPA Section 9 (prohibits the seller from requiring the buyer to use a particular title company, as a condition of the sale, unless the seller pays for the title insurance and all other title-related fees.) is violated, the seller could be sued for how much?
3x’s (treble damages) the amount paid for the service.
33
32. RESPA Section 10 requires lenders to conduct an ____________ if the account has impounds (escrow account/reserve account).
annual escrow analysis
34
RESPA Section 10 requires lenders to conduct an annual escrow analysis if the account has ___________.
impounds (escrow account/reserve account).
35
What is the annual escrow analysis?
The annual escrow analysis summarizes the activity in the impound account
36
34. RESPA Section 10 states that the lender can take no more than ______ of the annual amount of the property taxes and insurance premium for the purpose of the escrow account.
1/12th
37
35. RESPA Section 10 states that to protect itself from escrow shortages, the lender may require a cushion that doesn't exceed an amount equal to _________ of the total disbursements for the year.
1/6th (2 months)
38
36. Overages of ____ or more discovered in a borrower's escrow account during the annual audit analysis must be refunded to the borrower (if the borrower is not delinquent). The refund must be made within _______ days.
$50, 30 days.
39
37. What are the RESPA disclosures?
KAMILAS: Know-Before-You-Own Booklet (Aka Home Loan Toolkit), AfBA, mortgage Servicing Documents, Initial Escrow, List of HUD Approved Counselors (10), Annual Escrow, Serving Transfer Statement (Goodbye Letter)
. (Note: the GFE/HUD are also RESPA disclosures – but only used with mobile homes, reverse mortgages, etc.).
40
38. The lender must provide the borrower with a list of _____ HUD approved counselors.
ten (10)
41
40. The Mortgage Servicing Disclosure is the standard form used to disclose to the borrower whether the lender intends to _____________________________________ This must be delivered to the borrower at or within _________
intends to retain the mortgage servicing of the loan (handling the monthly payments and paying the taxes and insurance obligations).
three days of the loan application.
42
41. Initial Escrow Statement - Itemizes the ___________________________ “anticipated to be paid” from the Escrow Account during the loan’s first 12 months. Usually given at settlement, but lender has 45 days from settlement to deliver. Sometimes referred to as the “HELLO LETTER”.
estimated taxes, insurance premiums and escrow account charges
43
41. What statement itemizes the estimated taxes, insurance premiums and escrow account charges “anticipated to be paid” from the Escrow Account during the loan’s first 12 months? Usually given at settlement, but lender has 45 days from settlement to deliver. Sometimes referred to as the “HELLO LETTER”.
Initial Escrow Statement
44
41. Initial Escrow Statement - Itemizes the estimated taxes, insurance premiums and escrow account charges “anticipated to be paid” from the Escrow Account during the loan’s first 12 months. Usually given at settlement, but lender has ___ days from settlement to deliver. Sometimes referred to as the “_________"
45, HELLO LETTER
45
42. This ____________ is often referred to as a “goodbye letter” in the industry. The new servicer is also required to send the borrower a notice known as a “welcome” letter (aka “hello letter”).
Servicing Transfer Disclosure
46
43. RESPA states that a ________________ is required if the loan servicer sells or assigns the servicing rights to a borrower's loan to another loan servicer.
Servicing Transfer Statement
47
44. The Servicing Transfer Disclosure is required to be provided to the borrower by the servicer no later than ____ days BEFORE the servicing rights are transferred to the new servicer.
15
48
45. According to the servicing transfer disclosure, there is a statutory ____-day “grace period” during which any payment mistakenly made to the old servicer must be forwarded to the new servicer, and no late fee can be assessed.
60
49
46. Per RESPA, a complete application consists of the following six (6) items:
borrower name, Social Security Number, subject property address, borrower’s monthly income, estimated value amount, and the loan amount.
Remember ALIENS: (Address, Loan Amount, Income, Estimated Value, Name, SSN)
50
47. Per RESPA – if a borrower has submitted a complete application, the initial disclosures are “triggered” and must be provided to the borrower within __________ days.
3 business
51
48. If the application is withdrawn within the first 3 days, or the lender denied the application within the first 3 days, the initial disclosures are __________.
NOT required.
52
When are the initial disclosures not required?
If the application is withdrawn within the first 3 days, or the lender denied the application within the first 3 days, the initial disclosures are NOT required.
53
49. Initial Disclosures include: (REMEMBER KAMILAS (G/H)
K- Know before you owe handbook/HUD special information booklet/ Home loan toolkit
A- AfBA (Affiliated Business Arrangement Disclosure, more than 1% ownership)
M- Mortgage servicing agreement
I- Initial Escrow (HELLO LETTER)
L- List of HUD approved counselors (10)
A- Annual Escrow
S- Servicing Transfer Statement (GOODBYE LETTER)
GFE/HUD- (NON- PURCHASE) Reverse Morgate- Tip "Old people get old docs)
54
50. ______________________ – is intended to help persons borrowing money to finance residential real estate better understand the nature and cost of real estate settlement services. It must be delivered at or within ____ days of the applications for consumers looking to purchase a property (for purchases only!!)
The Home Loan Toolkit (Know Before You Owe booklet), three
55
51. A referring party must give the Affiliated Business Arrangement Disclosure to the consumer (immediately) at the time of referral, or prior to loan consummation – if referring business where he/she has more than __% interest in the referring business/service.
1 (one) % interest
56
52. For mortgage transactions occurring after October 3, 2015, the GFE and the HUD have been replaced by two new forms called the “Loan Estimate” (LE) and the “Closing Disclosure” (CD) – however, the GFE and HUD will continue to be provided for ______________________________________________.
HELOCS,
reverse mortgages
loans securing mobile homes where the owner will not also own the land which the mobile home resides.
57
53. The GFE and HUD are ____ disclosures, however the Loan Estimate and Closing Disclosure are ____ disclosures.
RESPA, TILA
58
54. The Closing Disclosure must be delivered ____ business days before loan consummation (doc signing) and a final Closing Disclosure at the ____________
three (3), loan consummation (doc signing).
59
55. RESPA requires two disclosures that must be given at settlement: __________& ______________, which may be given within ___ days of closing.
The Closing Disclosure (CD) and the Initial Escrow Statement, 45
60
56. ________ Disclosure is NOT required when there is no federally related loan or no closing costs to the borrower or for most closed-end loans.
Closing
61
57. _______________ occurs if the lender chooses the hazard insurance company when the borrower allows his policy to lapse.
Force-placed insurace
62
58. The TRID Loan Estimate (LE) combines the initial _________ & __________.
TILA disclosure and the GFE.
63
59. The TRID Closing Disclosure (CD) combines the _______ & _________.
final TILA disclosure and the HUD
64
60. The Loan Estimate must be delivered or mailed no later than___________ days after a loan application is submitted.
(3) three business
65
61. The terms on the loan estimate must be available for _______ days (this does not include the _________).
10 business, interest rate.
66
62. When it is necessary to provide a revised Loan Estimate, it must be provided within _____________ days of receiving information sufficient to establish a valid change in circumstance. Documentation must be retained regarding the reason for the revision for ______ years.
three (3) business, three (3)
67
62. When it is necessary to provide a revised Loan Estimate, it must be provided within three (3) business days of receiving information sufficient to __________________. Documentation must be retained regarding the reason for the revision for three (3) years.
establish a valid change in circumstance
68
63. The creditor must make sure that the revised Loan Estimate is received at least four _________ days prior to consummation of the mortgage loan.
(4) business,
(Remember, the soonest that a loan can close is seven (7) days – so 3 days + 4 days = 7 days).
69
64. If the creditor places the revised loan estimate in the mail as a method of delivery, the creditor must mail the disclosure________ business days prior to consummation of the loan, to allow for the three (3) business day receipt rule.
seven (7)
70
65. Once a borrower receives the Closing Disclosure – a new ________ CANNOT be issued. If there is a valid change of circumstances that occur after the Closing Disclosure is delivered – the borrower is to receive a new revised closing disclosure – NOT a ___________.
Loan Estimate, revised loan estimate
71
66. A “valid changed circumstance” is defined under RESPA as:
(1) An Act of God, war, disaster, or other emergency
(2) New information regarding the consumer, the loan or the property; or
(3) Information regarding the consumer’s qualification for the loan on which the originator relied in providing the LE those changes or is later found to be inaccurate
72
Valid Change in Circumstances for the LE are:
Act of GOD/ War/ Disaster
Appraised Value comes in low
Change in loan program
Credit Score Decline
Change in Loan Amount
Change in loan terms
Seller delay in short sale approval
73
67. The following are NOT considered “valid changed circumstance” as defined under RESPA:
Error(s) in disclosing an initial or subsequent LE or delays in underwriting/checking in conditions, leading to lock extension fees
74
69. Changes in the APR, loan product or the addition of a prepayment penalty trigger a ___________ and an additional _________ day waiting period
revised Closing Disclosure , 3 business
75
70. When a consumer requests the cancellation of their escrow account, the lender must deliver an __________ no later than ________ days before closure
Escrow Closing Notice, 3 business
76
71. If the escrow account is closed for some other reason (except for default or termination caused by refinancing, repayment, or rescission), the notice must be sent ___ business days prior to closure.
30
77
72. Lenders must retain the Closing Disclosure and related documents for __ years after closing.
5
78
73. Lender must retain the Loan Estimate for __ years after closing.
3
79
74. The ___________ must be provided by the creditor prior to canceling an escrow account for any consumer who had one established by the creditor.
Escrow Closing Notice
80
75. Regarding the Escrow Closing notice, if the consumer requests the close - this notice must be received at least ______ business days before the consumers escrow account is closed. If the escrow is closed for any other reason, the creditor is required to provide the notice within ____ business days.
three (3), 30 business days.
81
76. Lender must retain the Escrow Cancellation Notice for _____ after loan consummation.
2 years
82
77. A partial payment policy disclosure is found on the____________ regarding the acceptance of partial mortgage payments by the loan services. The disclosure informs the consumer about the policy and the acceptance of payment less than the full amount due under the note.
closing disclosure
83
78. Lender must retain the Partial Payment Policy for ________ after loan consummation.
2 years
84
79. A ______________ is how much of a change a particular item can “tolerate” between the Loan Estimate (LE) and the Closing Disclosure (CD) before it’s in violation of the law. Some items have a zero tolerance, others may have a 10% tolerance level and some items no limit on how much they can vary.
Tolerance
85
80. The following items have a zero tolerance:
Real estate transfer taxes, loan origination fees and interest rate. Others zero tolerance items include the appraisal and credit report.
86
81. The following items have a 10% tolerance:
Fees that the lender chooses or identifies, such as government recording fees, title insurance. These items cannot vary by more than 10% between the Loan Estimate and the Closing Disclosure.
87
82. The following items have a NO tolerance limit:
Fees for services that the owners choose for themselves, such as hazard insurance, title insurance (if the homeowners
doesn't choose one of the lender-identified selections) and fees that are paid per diem (pre-paid mortgage interest).
88
Items that have ZERO Tolerance (TRAIL)
T- Real Estate Transfer Taxes
R- Report (Credit)
A- Appraisal
I- Interest Rate
L- Loan Origination
89
Items that have 10% Tolerance (TAG)
T- Title Insurance (on Lender's List)
A- Anything that is chosen off the lender's list
G- Government recording fees
90
Items that have NO tolerance (HTTP)
H- Hazard Insurance
T- Title Insurance (not on lenders list)
T- Termite Inspection
P- Per Diem (day) fees (Prepaid mortgage interest)
91
83. The lender has _________ days after the closing to refund to the borrower any portion of the charges that exceeded the acceptable amount of a stated tolerance level.
60 business
92
84. Non-numeric clerical errors and tolerance violations trigger a new _____________ that must be delivered within ____ calendar days following loan consumption. Likewise, Closing Disclosure tolerance refunds must also be sent within ___ days.
Closing Disclosure, 60, 60
93
85. Closing costs greater than Loan Estimate = ___________________
not made in good faith.
94
86. Closing costs less than Loan Estimate = ________________
acted in good faith.
95
87. TRID rules do not apply to ______________, _____________, & ______________________,
HELOCS, reverse mortgages, mortgages for mobile homes not secured by real estate.
96
88. The Rate Lock information is ONLY found on the ____________.
Loan Estimate form.
97
89. Although mortgage brokers may provide the loan estimate to the borrower, the __________ is ultimately responsible for the delivery.
creditor
98
90. As it relates to the Loan Estimate, a business day is any day in which the creditor is open to the public for ________________________________. (Note this difference from the definition of a business day for the Closing Disclosure)
the purpose of conducting regular business activities
99
91. No fee (with the exception of a bona fide and reasonable ______________) may be received by the MLO or creditor until the borrower has received the Loan Estimate.
credit report fee
100
92. Penalty for violating RESPA is _____________.
$10,000 and/or up to 1 year in jail.
101
93. The main purpose of RESPA is to help consumers become better shoppers for ________________
settlement services.
102
94. RESPA considers the following as settlement services:
title searches, title examinations, title insurance, attorney services, preparation of documents, surveys, credit reports, appraisals, pest inspections, real estate services, loan origination, processing mortgages and closing or settling mortgages.
103
RESPA Settlement Services: PAPER CLIP CAST
P- Preparation of Documents
A- Appraisals
P- Pest Inspections
E- Examination (Title Examination)
R-Real Estate Services
C- Credit Report
L- Loan Origination Fee
I- Insurance (Title Insurance)
P- Processing Mortgage
C- Closing Settling Mortgage
A- Attorney Services
S- Surveys
T- Title Searches
104
Creditor must post payment the date _________.
It is recieved
105
How long must a creditor respond to a payoff notice?
Seven (7) Business Days
106
Creditors must disclose forced placed insurance at _____ & ______ days prior to billing?
30 & 45 days
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