Regulation X - Real Estate settlement procedures act Flashcards

Regulation X - Real Estate settlement procedures act Flashcards Successor in Interest TreatmentTreatment of potential successors interesti. Promptly facilitate communication with potential successor in interest upon receiving notice of death of a borrow or transfer of propertyii. Upon receiving notice of the existence of a potential successor in interest, provide person with a description of documents required to confirm person's identity and ownership interest and information on how the person may submit a formal information request Loans must be made by the followingMade by a lender - with federally insured deposits, os regulated by a federal agency, is a creditor under the consumer credit protection act that makes or invests in residential loans aggregating more than $1 million in any caldendsd year Affliated business arrangement disclosure This disclosure is required when there is a referral of business to settlement service provider in which the person (for RESPA purposes and defined as individuals, corporations, associations, partnerships, trusts) making the referral has an afiliate relationship with or direct or beneficial ownership of more than 1 percentTiming -may be provided at the time of referral or with the GFE Which of the following practices is NOT prohibited by

RESPA?

A lender requiring a consumer to pay for thr preparation of documents by a certain attorney.A lender may require the borrower to use and pay for a certain attorney to prepare or review the loan documents. However, if the bank recieves a thing of value from the attorney in exchange for thr business generated by this arrangement, the transaction is in violation of RESPA Reg X - not a refinanceRenewal of a single payment loan with no change in termsReduction in the APR with a corresponding payment changeAn agreement involving a court proceedingA workout agreement resulting from the consumer's default, unless the rate is increased or the amount financed exceeds the principal, interest, and insurance premiumsThe renewal of optional insurance purchased by the consumer, added to the transaction Timing of disclosuresMust be given within 3 business days of the receipt of the application. If the application is denied or withdrawn by the applicant within 3 business days - NO DISCLOSURE IS REQUIREDDelivery may be by hand, mail, email, fax, or other electronic means with the consumer's consent

Reg X doesn't not include:Business purpose loansTemporary financingLoans secured by vacant land unless a home will be constructed or placed within 2 yearsAssumptions without lender approval Title Co., Inc., has a business relationship with First National Bank in that Title Co. keeps a large certificate of deposit at the bank at an interest rate substantially below the market rate. In return, the bank refers to Title Co. its mortgage loan borrowers for settlement services and to purchase required title insurance. Title Co.'s rates are very competitive. If the bank discloses the relationship to the borrower, is this arrangement legal under RESPA?No. The bank is receiving value in the below-market-rate CD, essentially referral fee for settlement services.Coverage-12Any loan (other than temporary financing such as a construction loan) is secured by a first or subordinate lien on residential property, including a refinancing of any loan secured by residential real property, upon whi ch is located or will be constructed (using the loan proceeds), a structure or structures designed principally for occupancy of from one to four famiilies or upon which is located, or following settlement, will be located using the proceeds of the loan, a manufactured home. Thi includes condominiums and cooperatives but does not include tempo construction loans. These loans must be either Real Estate Settlement Procedures ActThe Real Estate Settlement Procedures Act (RESPA) was enacted in 1 974 to require enders, mortgage brokers, and servicers of home loans to provide borrowers with accurate and timely disclosures of the nature and costs of residential real estate settlement services. RESPA also was designed to prohibit abusive practices such as kickbacks and unfair escrow requirements, and it places limits on the use of escrow accounts.Refinancings of federally related mortgage loans Refinancings occur when an existing obligation is satisfied and replaced by new obligation with the same borrower.When the same lender is involved.