Real Estate Settlement Procurement Act of 1974
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HUD-1
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Settlement Statement Form
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Good Faith Estimate
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Itemized estimate of charges likely to be paid at closing
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Affiliated Business
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Business owned or controlled by common parent corporation
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Servicing Disclosure
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Informs borrower that lender intends to transfer servicing of loan to another party
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In what year was the Real Estate Settlement Procedures Act enacted? 1903 1968 1974 2009
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The correct answer is C. RESPA was enacted in 1974.
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In regard to the GFE, the term "changed circumstances" applies to all of the following EXCEPT the borrower asking for a different loan amount or terms. information about the borrower or transaction that was relied on in providing the GFE that has changed or is found to be inaccurate. the loan originator changing the brokerage fee. acts of God, war, disaster or other emergency.
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The correct answer is C. The term "changed circumstances" applies to acts of God, war, disaster or other emergencies; information particular to the borrower or transaction that was relied on in providing the GFE that changed or is found to be inaccurate (e.g., information about the borrower's credit quality, the loan amount, the estimated value of the property); new information particular to the borrower or transaction that was not relied on in providing the GFE; or other circumstances such as boundary disputes, the need for flood insurance, or environmental problems.
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RESPA does not require a loan originator to provide a written GFE if the loan application is denied within three business days of the application. the loan application is approved within three business days of the application. the loan originator has orally disclosed the GFE. the borrower waives it.
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The correct answer is A. A mortgage broker must provide a GFE, even if the exact settlement service fees are not known or if he has orally discussed the GFE with the applicant within the three-business-day disclosure period. He need not provide it if the credit application is denied within three business days.
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Which document advises the consumer not to provide false information in relation to his loan application? The initial TIL Disclosure The HUD special information booklet The ECOA adverse action notice The GFE
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The correct answer is B. The special information booklet (HUD's Settlement Cost Booklet) gives the consumer key information about the home-buying and loan process. It includes a "Do" list and a "Don't" list. The "Don't" list advises the consumer not to provide false documentation; fake co-borrowers; change tax returns; or overstate assets, length of employment or income.
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What federal statute primarily governs settlement of residential mortgage loans? TILA RESPA HMDA ECOA
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The correct answer is B. The Real Estate Settlement Procedures Act is primarily concerned with settlement of residential mortgage loans.
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In completing Block 2 of the Your Adjusted Origination Charges section on Page 2 of the GFE, the loan originator will show any net charges as a negative figure. both charges and credits. charges and credits as positive figures. any net credits as a negative figure.
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The correct answer is D. Box 2 will show only a net credit or net charge, not both. The credits to the borrower appear as negatives, since they are used to reduce his origination charges; the charges (points paid to reduce the interest rate) appear as positives since they add to his charges.
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A Good Faith Estimate must be provided to a loan applicant within how many business days following receipt of the application? 10 3 1 7
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The correct answer is B. If a borrower does not get the Good Faith Estimate when he applies for the loan, the loan originator must mail or deliver it to him within the next three business days.
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In the loan application process, which of the following documents contains a "shopping chart"? GFE HUD-1 TIL HUD-1A
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The correct answer is A. The purpose of the Good Faith Estimate is to allow applicants to shop for lower closing costs. Therefore, the GFE has on Page 3 a shopping chart for use by the applicant in comparing closing costs from different originators.
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According to RESPA, when two applicants jointly apply for a home purchase loan, a special information booklet is given only if requested. need be given to only one. need be given to neither. must be given to both.
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The correct answer is B. When two applicants jointly apply for a loan, the mortgage broker must send the special information booklet to either one of them.
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The loan originator's estimate of the charges and terms must be available for at least what period of time after the GFE is provided? 10 calendar days 10 business days 7 business days 7 calendar days
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The correct answer is B. The estimate of the charges and terms must be available for at least 10 business days from when the GFE is provided.
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HUD's special information booklet can be part of other larger documents. can be reproduced in any form. cannot be stamped with the mortgage broker company name. cannot be translated to other languages.
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The correct answer is B. The special information booklet can be reproduced in any form, translated into other languages and stamped with the mortgage broker company name, but it cannot be part of other larger documents.
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A loan secured by vacant or unimproved property is covered under RESPA only if the loan proceeds will be used to construct or place a structure or a manufactured home on the real property within two years from the date of the settlement of the loan. the loan proceeds are to be used to purchase only the land. any construction is financed separately. None of these, as the property must be improved with a dwelling
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The correct answer is A. A loan secured by vacant or unimproved property is covered under RESPA if a structure or a manufactured home will be constructed or placed on the real property using the loan proceeds within two years from the date of the settlement of the loan. RESPA does not apply to an extension of credit primarily for business, commercial or agricultural purposes.
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The Real Estate Settlement Procedures Act is administered by state banking regulators. the Federal Reserve. the Consumer Financial Protection Bureau. the FTC.
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The correct answer is C. RESPA is administered by the Consumer Financial Protection Bureau.
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When actual charges at settlement exceed the estimates on the GFE by more than the zero or 10% tolerances, the loan originator must pay a fine of up to 100% of the excess charged. must refund the entire charge. has 30 days from settlement to refund the excess to the borrower. may reimburse the borrower the excess not later than at settlement.
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The correct answer is C. The loan originator does have an opportunity to cure a tolerance violation. He can do this by reimbursing to the borrower the amount in excess of the tolerance. He does not have to reimburse the entire amount above the estimate. The reimbursement must be made either at settlement or within 30 calendar days after settlement.
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RESPA does not require lender disclosures of closing costs and procedures for which of the following home loans? Home purchase loans from a lender FHA loans Temporary construction loans Home equity loans
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The correct answer is C. RESPA applies to transactions involving federally related mortgage loans, including loans secured by a first or subordinate lien on residential property, such as home purchase loans; refinances; home equity loans; home equity lines of credit; reverse mortgages; and FHA, VA and conventional loans. However, a construction loan may be subject to the law if it is used as, or may be converted to, permanent financing by the same lender; the lender issues a commitment for permanent financing; the loan is used to finance a transfer of title to the first user; or the loan is for a term of two years or more, unless it is to a bona fide builder.
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Which of the following best defines when a loan originator must provide an Affiliated Business Arrangement (AfBA) disclosure? On the settlement statement At or before the time the referral is made Prior to closing Within three business days after the referral is made
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The correct answer is B. Disclosure of the existence of an affiliated business arrangement must be provided at or before the time of the referral in the case of a referral made face-to-face, in writing, or by electronic media. If the referral is made by telephone, the written disclosure must be provided within three business days after the referral, but during the telephone referral an abbreviated verbal disclosure of the existence of the arrangement and the fact that a written disclosure will be provided within three business days must be provided. If the referral is by a lender, the disclosure must be provided at the time the GFE is provided (as late as three business days from receipt of the application).
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In an affiliated business arrangement, a provider of settlement services cannot refer settlement service business to another settlement service provider. cannot be a real estate agent. has more than one percent ownership interest in another settlement services provider. may not have an affiliate relationship with another settlement service provider.
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The correct answer is C. In an affiliated business arrangement, a provider of settlement services has either an affiliate relationship with another settlement services provider or owns more than one percent of another settlement services provider. The provider can directly or indirectly refer business to another settlement services provider or influence the selection of a services provider.
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An AfBA Disclosure Statement is required whenever a loan is covered by RESPA. as a routine part of any real estate transaction. when a settlement service provider refers a borrower to an affiliate with whom it has beneficial interest. whenever more than one real estate agency is involved in a transaction.
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The correct answer is C. When several businesses offering settlement services are owned or controlled by a common corporate parent, they are known as "affiliates." When a settlement service provider refers a borrower to one or more affiliates with whom it has an ownership or other beneficial interest, an Affiliated Business Arrangement (AfBA) Disclosure Statement is required. One AfBA Disclosure Statement to a borrower may be used to include referrals to more than one affiliate. The AfBA Disclosure Statement is not used for referrals to providers who are not affiliates.
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The Real Estate Settlement Procedures Act provides for all of the following EXCEPT a prohibition against payment of referral fees to other settlement service providers. a prohibition against receipt of referral fees from other settlement service providers. a limit on the amount of origination fees that may be charged in a federally related residential mortgage loan transaction. use of a Good Faith Estimate and HUD-1 Settlement Statement in formats developed by HUD.
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The correct answer is C. RESPA requires disclosure of origination fees, and other settlement costs, but it does not specify a maximum. RESPA does prohibit receipt or payment of referral fees and does require use of a GFE and HUD-1 Settlement Statement in the formats developed by HUD in Regulation X.
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Which regulation requires the issuance of a GFE? Regulation C Regulation X Regulation Z Regulation B
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The correct answer is B. Regulation X is the regulation that applies to RESPA. It requires the GFE. Regulation Z applies to the Truth in Lending Act, which deals with credit advertising and credit cost disclosures. Regulation C relates to the Home Mortgage Disclosure Act. Regulation B relates to Equal Credit Opportunity Act.
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What does RESPA require to be included in an AfBA disclosure? A statement that the use of the affiliated service provider is not required A comparison of the costs of the affiliated service provider with those of its major competitors Disclosure of the percentage of interest the referring company has in the affiliated service provider. The names of all third-party providers in the area providing the same service as the affiliated service provider
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The correct answer is A. When an escrow company and a mortgage broker have common ownership and there is a referral from one to the other, RESPA requires that the AfBA Disclosure contain a statement that the use of the affiliated service is not required. Disclosure of names and costs of competitors is not required.
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Which of the following items may not increase above the estimate in the GFE? Origination fee Title insurance Floating interest rate Appraisal fee
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The correct answer is A. There is zero tolerance (i.e., no increase is allowed above the amounts included on the GFE) for the origination charge; transfer taxes; and, while the interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge. There is a 10% tolerance allowed for increases in the sum of the charges for certain services where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator, including charges involved with appraisal services and title insurance.
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RESPA applies to all the following loans EXCEPT one for construction of a borrower's home that is convertible to permanent financing. one to purchase a three-unit residential building. one that is solely for construction of the borrower's home. one to purchase a single-family home.
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The correct answer is C. RESPA covers loans made by federally related lenders that are secured with a mortgage placed on a one- to four-family residential property, including a condominium unit, a cooperative share, a time share or a manufactured home (mobile home), located on the real property securing the lender's interest. A construction loan is covered if it is used as, or may be converted to, permanent financing by the same lender; its term is two years or more, and it is not to a bona fide builder; or the lender issues a commitment for permanent financing. A temporary construction loan is not covered.
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When an individual applies for a loan at a mortgage company, the mortgage company must provide all of the following within three business days EXCEPT a Good Faith Estimate. a loan approval document. an Annual Percentage Rate. a special information booklet.
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The correct answer is B. There is no specified time period for loan approval. At the time of application or within three business days after an individual applies for a loan, the mortgage company must provide a GFE and special information booklet per RESPA and provide the APR per the Truth in Lending Act.
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Which law requires a loan originator to provide a special information booklet to a borrower? Consumer Protection Act Truth in Lending Act Real Estate Settlement Procedures Act Uniform Settlement Statement
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The correct answer is C. RESPA requires that a lender or mortgage broker provide the borrower with a special information booklet prepared by HUD within three business days of receiving a mortgage loan application.
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RESPA regulations would apply to a loan to purchase a condominium unit. a loan to purchase a 50-acre homestead. a loan secured by an empty lot that will not be developed in the next three years. the sale of a duplex for which the buyer pays in cash.
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The correct answer is A. RESPA covers loans made by federally related lenders that are secured with a mortgage placed on a one- to four-family residential property, including a condominium unit, a cooperative share, a timeshare or a manufactured home (mobile home) located on the real property securing the lender's interest. Transactions not covered under RESPA include an extension of credit primarily for a business, commercial, or agricultural purpose; a loan secured by vacant or unimproved property, unless a structure or a manufactured home will be constructed or placed on property using the loan proceeds within two years from the date of the settlement; and a loan on property of 25 acres or more.
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RESPA requires which of the following to provide the special information booklet to an applicant for a residential mortgage loan? Loan originator Real estate broker Attorney Title company
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The correct answer is A. RESPA requires that the loan originator (its term for the lender or the mortgage broker) provide the borrower with a special information booklet prepared by HUD within three business days of receiving a mortgage loan application.
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A HUD Settlement Cost booklet must be provided in a loan transaction involving all of the above a refinance a loan to purchase a home. a second loan.
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The correct answer is C. The booklet explains the process and costs involved in financing and closing a purchase transaction.
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Which of the fees below has a 10% tolerance for changes on the GFE? Transfer fees Initial escrow deposit Title insurance chosen by the lender Origination fees
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The correct answer is C. Settlement charges can increase prior to closing. If they do, the loan originator may be responsible for paying the increase. Transfer fees and origination fees have a zero tolerance, meaning that the loan originator must pay for any increase. There is no tolerance for the initial escrow fee, meaning that the loan originator has no responsibility for any increase. Title insurance is one of the charges subject to a 10% tolerance, meaning that the loan originator is responsible for any increase greater than 10% above his estimates. When there are acceptable changed circumstances, the estimates can be revised and the lender can avoid having to pay for the increases.
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Dawn Surly-Light is a mortgage broker who has a 10% interest in the Escalade Escrow Company. If Dawn refers borrowers to Escalade, does she have to give them an AfBA disclosure according to RESPA? Yes, because any referral to a settlement service provider necessitates an AfBA Disclosure, regardless of interest. No, because she owns less than 50% of Escalade. Yes, because any interest over 1% in a settlement service provider necessitates an AfBA Disclosure. No, because she is not the owner of Escalade.
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The correct answer is C. According to RESPA, when a settlement service provider refers a borrower to one or more affiliates with whom it has more than a 1% ownership or other beneficial interest, an Affiliated Business Arrangement Disclosure Statement is required.
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At the same time that he obtains his first mortgage loan, a homebuyer obtains a closed-end mortgage loan in order to cover part of his down payment. This second loan is a home equity loan. a subprime loan. a home equity line of credit. a primary mortgage loan.
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The correct answer is A. A home equity loan is a closed-end second mortgage loan that is in addition to a first mortgage and is secured by the owner's equity in the property. A home equity line of credit is also a second mortgage loan secured by the owner's equity, but it is open-ended.
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Borrowers receive information regarding their rights in negotiating the terms of a loan in the mortgage servicing disclosure statement. the Consumer Handbook on Adjustable Rate Mortgages (CHARM). the Good Faith Estimate. the Settlement Cost Booklet.
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The correct answer is D. The Settlement Cost booklet informs borrowers of their rights in negotiating the terms of a loan.
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Within how many business days of receiving a mortgage loan application must a loan originator provide the applicant with the Special Information Booklet? Three One Six Five
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The correct answer is A. RESPA requires that a loan originator provide the borrower with a special information booklet prepared by HUD, along with a GFE, at the time of receipt of a mortgage loan application or within three business days of receipt.
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The special information booklet contains a disclosure of final settlement costs. information regarding real estate settlement services in a refinance. a disclosure of estimated settlement costs. information regarding real estate settlement services in a home purchase.
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The correct answer is D. The special information booklet (Settlement Cost booklet) contains information regarding real estate settlement services in the purchase of a home, but it does not show actual settlement costs.
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Which of the following protects a homeowner from claims of others to legal rights in his property? Purchase of an owner's title insurance policy Purchase of a lender's title insurance policy Purchase of mortgage insurance Assumption of the prior homeowner's insurance policy
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The correct answer is A. A buyer will buy, or have the seller buy for him, an owner's title insurance policy insuring him against loss due to claims of others to the title or to legal rights in the property.
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A mortgage broker rents office space valued at $30 per square foot for $30 per square foot from a real estate broker. Which company is in violation of RESPA? Only the mortgage broker company Only the real estate agent Both are in violation of RESPA Neither is in violation of RESPA
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The correct answer is D. A mortgage broker may enter into a rental agreement with a real estate agent to rent office space if it is at the prevailing market rate.
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The lowest month-end target balance for an escrow account at the end of its computation year is zero plus a two-month cushion. one month's payments. one year's payments. $200.
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The correct answer is A. RESPA sets limits on the amounts a loan servicer may require a borrower to put into an escrow account. At closing, the servicer may require the borrower to pay into the escrow account an amount necessary to pay for any shortage in the account (i.e., an amount sufficient to pay charges for the period from the date they were last paid until the initial loan payment date). This amount is computed so that the lowest month-end target balance projected for the escrow account computation year is zero. In addition, the servicer may hold a cushion of up to 1/6 of the estimated total annual payments (i.e., two months' payments) from the escrow account.
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A title insurance company provides a computer to a mortgage lender. If the computer is used partly to transmit electronic documents from the lender's office to the title insurance company, who is violating RESPA? The title insurance company The mortgage lender Both Neither
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The correct answer is C. Because the computer will defray the mortgage lender's costs and is not used exclusively for transmitting documents to the title company, both parties are in violation of RESPA.
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RESPA requires that a mortgage servicing disclosure statement be provided to a borrower within three business days of the application. at closing. three business days prior to closing. within 15 days after closing.
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The correct answer is A. A mortgage servicing disclosure statement discloses whether the servicing of the loan (i.e., collection of payments) may be assigned, sold or transferred to any other person at any time while the loan is outstanding. It must be provided at the time of the application or within three business days after.
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A loan servicer must deliver an annual escrow statement to the borrower 15 days prior to the end of the escrow account computation year. within 30 days of the end of the escrow account computation year. by January 30 each year. by the end of the lender's fiscal year.
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The correct answer is B. After conducting the analysis, the servicer must deliver an annual escrow statement to the borrower within 30 calendar days of the end of the escrow account computation year. This statement summarizes all escrow account deposits and payments during the servicer's 12-month computation year and notifies the borrower of any shortages or surpluses in the account and the course of action being taken. The borrower must be refunded any surplus greater than $50.
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If a real estate company accepts a mortgage company's flyers and distributes them to prospective buyers during an open house, who is in violation of RESPA? The real estate company only The mortgage company only Both the real estate company and the mortgage company Neither the real estate company nor the mortgage company
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The correct answer is D. It is permissible for service providers to market and promote their services provided they are not offering things of value for referrals.
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If a mortgage broker refers clients to a title company in which he is a 4% owner and receives annual dividends based on the amount of business it refers to the title company, who is in violation of RESPA? The mortgage broker The title company Both the mortgage broker and the title company Neither the mortgage broker nor the title company
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The correct answer is C. Even though the mortgage broker is an owner and can receive dividends based on the title company's profits, the title company cannot pay and the mortgage broker cannot receive any referral fees or dividends based on referrals.
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Which of the following is designed to show all receipts and disbursements by the closing agent in a refinance transaction in which there is no seller? TILA Disclosure HUD-1A HUD-1 GFE
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The correct answer is B. The HUD-1A Settlement Statement is the Optional Form for Transactions without Sellers. For loan transactions without a seller, such as refinancing loans or subordinate lien loans, either the HUD-1A or the HUD-1 may be used by using the Borrower's column only.
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The HUD-1A Settlement Statement is designed for use when there is no mortgage broker in the transaction. the property is located outside the state. the transaction is table-funded. no seller is involved in the transaction.
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The correct answer is D. The HUD-1A is provided to a borrower when there is no seller involved. The standard HUD-1 Settlement Statement is used in every settlement involving a federally related mortgage loan in which there is a borrower and a seller. For loan transactions without a seller, such as refinancing loans or subordinate lien loans, either the HUD-1A may be used or the HUD-1 may be used by using the Borrower's column only.
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A Good Faith Estimate and a HUD-1 differ in that only the HUD-1 shows the yield spread premium. only the HUD-1 shows the Annual Percentage Rate. the GFE settlement cost figures are estimates while the HUD-1 figures are actual costs. in a transaction initiated by a mortgage broker, the mortgage broker must prepare the GFE but the lender must prepare the HUD-1.
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The correct answer is C. The GFE will show estimated settlement costs. The HUD-1 shows the actual settlement costs.
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The aggregate adjustment, which corrects the escrow account deposits the lender is allowed to collect, is always a positive amount. a debit to the borrower. zero or a negative amount. B or C
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The correct answer is C. Escrow account deposits identify the payment of taxes, insurance and other items that must be made at settlement to set up an escrow account. The lender is not allowed to collect more than a certain amount. The individual item deposits may overstate the amount that can be collected. The aggregate adjustment makes the correction in the amount on Line 1007. It will be zero or a negative amount (i.e., a credit to the borrower).
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Which of the following itemizes the same fees as the HUD-1 Settlement Statement? Model disclosure form Good Faith Estimate Rate-lock agreement Adjustable Rate Mortgage Disclosure
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The correct answer is B. The Good Faith Estimate contains the same itemized fees as the HUD-1 but shows them as estimates instead of final actual figures.
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A mortgage lender affiliated with a title company offers its customers the title company's services for $100 below the cost of what the services would be if ordered directly. If the customer is not required to use that title company's services and is given an AfBA Disclosure Statement, who would be in violation of RESPA? The mortgage lender The title company Both Neither
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The correct answer is D. It is permissible for service providers to refer business to affiliated businesses, provided there are written disclosures to the borrower of the business relationship that make it clear that the borrower is not required to use the services of the affiliated business.
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If a mortgage broker conducts a free seminar to inform real estate brokers about its new mortgage products, who is violating RESPA? Only the mortgage broker Only the real estate brokers Both the mortgage broker and the real estate brokers Neither the mortgage broker nor the real estate brokers
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The correct answer is D. It is permissible for service providers to market and promote their services, provided they are not offering things of value for referrals.
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Charges for survey fees appear in which section of the HUD-1 Settlement Statement? Title charges Government recording and transfer charges Additional settlement charges Settlement charges
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The correct answer is C. Charges for survey fees appear in the Additional Settlement Charges section of the HUD-1 (Section 1300).
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A borrower has paid the fee for the credit report before closing. How is this fee noted in a HUD-1 statement? Paid to seller Paid before closing Paid to lender Paid outside of closing
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The correct answer is D. Some fees may be listed on the HUD-1 and marked "POC," for "paid outside of closing." Such fees as those for credit reports and appraisals are usually paid by the borrower before closing/settlement.
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The HUD-1 Settlement Statement is also known as the settlement or closing statement. the credit statement. the finance statement. the operating income statement.
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The correct answer is A. RESPA requires the disclosure of a HUD-1 Settlement Statement, also known as the settlement (closing) statement, in a federally related mortgage loan transaction.
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Which law requires disclosure of settlement costs in a HUD-1 Settlement Statement? Real Estate Settlement Procedures Act Equal Credit Opportunity Act Truth in Lending Act Uniform Settlement Act
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The correct answer is A. RESPA requires disclosure of settlement costs in a HUD-1 Settlement Statement, also known as the closing statement, in a mortgage loan transaction. The HUD-1 is prepared by the settlement agent.
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In the HUD-1, escrow account deposits include a recording fee. a loan origination fee. an assumption fee. flood insurance premiums.
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The correct answer is D. Hazard insurance, including flood insurance premiums to be placed in an escrow account, is listed in Section 1000 (as part of Escrow Account Deposits).
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Funds paid into escrow are shown on the HUD-1 Settlement Statement. the Truth in Lending Disclosure. the Good Faith Estimate. the mortgage servicing disclosure.
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The correct answer is A. On the HUD-1 Settlement Statement, Section 1000 identifies the payment of taxes and/or insurance and other items that must be made at settlement to set up an escrow account.
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On a HUD-1, the money already paid by the borrower that is to be applied against the purchase price of the property is called equity. earnest money. escrow payment. new loan amount.
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The correct answer is B. Section 200 of the HUD-1 lists amounts paid by or on behalf of the borrower, including the deposit of earnest money (which is used to show the buyer's good faith and is applied to the purchase price at closing) made with the buyer's offer to purchase, as well as any financing, whether by a loan or assumption of the seller's existing loan.
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The HUD-1 Settlement Statement is provided to the the buyer and the seller. the seller only. the buyer only. third-party providers.
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The correct answer is A. The HUD-1 is provided to the buyer and the seller. Separate copies of the HUD-1 are prepared for the borrower and the seller. Copies of the same statement need not be given to both. Copies are not required for third-party providers.
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Which fee would appear in Section 800 (Items Payable in Connection with Loan) of the HUD-1? Hazard insurance premium Title insurance charges Appraisal fee Property taxes
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The correct answer is C. Section 800 the fees that lenders charge to process, approve and make the mortgage loan, including the loan origination fee, loan discount, appraisal fee, credit report, lender's inspection fee, mortgage insurance application fee, assumption fee and mortgage broker fee.
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Who is responsible for preparing the HUD-1? Loan originator Mortgage broker Settlement agent Title insurance company
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The correct answer is C. RESPA requires the disclosure of a HUD-1 Settlement Statement, also known as the closing statement, in a mortgage loan transaction. The HUD-1 is prepared by the person responsible for the closing (i.e., the settlement agent).
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The charges in a final HUD-1 statement must be entered as estimated percentages of the loan amount. actual dollar amounts. actual percentages of the loan amount. estimated dollar amounts.
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The correct answer is B. All charges on the final HUD-1 must be entered as actual, not estimated, dollar amounts.
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A consumer has the right to inspect his HUD-1 Settlement Statement how many business days prior to closing? 7 1 5 10
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The correct answer is B. One business day before the settlement, the consumer has the right to inspect the HUD-1 Settlement Statement.
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The maximum amount the charge for a category of settlement costs may exceed the estimated amount is the index. allowance. margin. tolerance.
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The correct answer is D. Tolerance is the maximum amount by which the charge for a category of settlement costs may exceed the estimated amount for that category on a GFE.
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The HUD-1 Settlement Statement includes all of the following EXCEPT down payment. housing expense ratio. property price. title examination fees.
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The correct answer is B. The HUD-1 includes money owed and paid at closing, including title charges, property price and down payment. The housing expense ratio used in evaluating the borrower's application has nothing to do with funds at closing.
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A title company pays for a dinner to be hosted by a mortgage broker and does not use the event to advertise itself. In gratitude, the mortgage broker refers business to the title company. Who has violated RESPA? Only the title company Only the mortgage broker Both the title company and the mortgage broker Neither the title company nor the mortgage broker
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The correct answer is C. The title company did not advertise its services to the public, so what it paid was a thing of value for the broker in return for the broker's referrals. This violates RESPA.
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When a mortgage broker pays for title services on behalf of a developer in return for the developer's agreement to refer prospective buyers to the mortgage broker, who is in violation of RESPA? The mortgage broker The developer Both the mortgage broker and the developer Neither the mortgage broker nor the developer
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The correct answer is C. The mortgage broker violates RESPA by paying for title services on behalf of a developer. The developer violates RESPA by agreeing to refer buyers to the mortgage broker.
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If ABC Mortgage Brokers provides a monthly dinner and reception for real estate brokers in the area, which of the following is violating RESPA? Both ABC and the real estate brokers Neither ABC nor the real estate brokers The real estate brokers The ABC
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The correct answer is B. Hosting a monthly dinner and reception for real estate brokers in the area would be a legal form of marketing.
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An attorney has agreed to provide a lender with free legal services. In return, the lender instructs its residential home loan borrowers to hire the attorney to perform the necessary title searches for them. Who is in violation of RESPA? The lender only The attorney only The lender and the attorney Neither the lender nor the attorney
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The correct answer is C. Sending borrowers to an attorney in return for the attorney providing legal services to the lender cost-free constitutes payment for referrals, placing both parties in violation of RESPA.
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A real estate broker refers a buyer to a mortgage broker. At that time, he gives the buyer a written disclosure of the fact that he has a 3% ownership interest in the mortgage broker and that the buyer is not required to use the services of the mortgage broker. Who is in violation of RESPA? The mortgage broker only Both the real estate broker and the mortgage broker The real estate broker only Neither the real estate broker nor the mortgage broker
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The correct answer is D. It is permissible for service providers to refer business to affiliated businesses provided the referring party provides written disclosure to the borrower of the business relationship and makes it clear that the borrower is not required to use the services of the affiliated business.
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Payment by a mortgage broker for which of the following would constitute giving a thing of value in violation of RESPA? Title research services by an attorney Mortgage insurance from a mortgage insurer Title search services by a title company Referrals from a real estate broker
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The correct answer is D. 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.
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A mortgage broker and a title company share advertising space, with the mortgage broker paying the cost of the entire space in return for a referral from the title company. Who is in violation of RESPA? The mortgage broker The title company Both the mortgage broker and the title company Neither the mortgage broker nor the title company
answer
The correct answer is C. The mortgage broker is paying for the total advertisement space to offset a referral from the title company. Payment for referrals and acceptance of payment for referrals violates RESPA.
question
When a mortgage company provides a real estate brokerage with complimentary notepads with the real estate company's name printed on it, which company is violating RESPA? Both companies The real estate brokerage Neither company The mortgage company
answer
The correct answer is A. Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback, or any thing of value in exchange for referrals of settlement service business involving a federally related mortgage loan. The notepads could be a thing of value given for referral of loan business because they defray a marketing expense the real estate agent would otherwise incur.
question
If a real estate broker offers, for a fee, a mortgage company the names and telephone numbers of all the people who attended an open house, who has violated RESPA? Neither the mortgage company nor the real estate broker Both the mortgage company and the real estate broker Only the real estate broker Only the mortgage company
answer
The correct answer is C. If a real estate licensee offers, for a fee, a mortgage company the names and phone numbers of all people who attended an open house, the real estate broker/salesperson is in violation of RESPA. If the mortgage company had accepted the offer, it too would have been in violation.
question
If a mortgage broker pays a real estate broker for each client referred to him, who is in violation of RESPA? Only the mortgage broker Only the real estate broker Neither the real estate broker nor the mortgage broker Both the real estate broker and the mortgage broker
answer
The correct answer is D. Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback, or any thing of value in exchange for referrals of settlement service business involving a federally related mortgage loan.
