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RESPA
- -REAL ESTATE SETTLEMENT PROCEDURE ACT
- -REGULATION X
- -GOVERNED BY HUD
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PURPOSE OF RESPA?
- - CREATE MORE EFFICIENCY EARLY DISCLOSURES TO HELP CONSUMERS BECOME BETTER SHOPPERS, WHICH ENCOURAGES COMPETITION AMONGST SETTLEMENT SERVICE PROVIDERS
- -ELIMINATE KICKBACKS AND REFERRAL FEES THAT UNNECCESSARILY INCREASE THE COST OF CLOSING
- -REDUCE THE AMOUNT HOMEBUYERS ARE REQUIRED TO PLACE IN ESCROW
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REPSA COVERS?
- 1ST AND 2ND MORTGAGES RELATED TRANSACTION ON RESIDENTIAL REAL PROPERTY DESIGNED AS A PRINCIPAL DWELLING ON 1-4 FAMILY UNITS.
- -INCLUDES: PURCHASES, REFINANCE, LENDER APPS ASSUMPTION, HOME IMPROVEMENTS, HELOCS, REVERSE MORTGAGES, TIME SHARES WITH LIENS, MFG HOMES ATTACHED TO PROPERTY, CONSTRUCTION LOANS USED TO PURCHASE PROPERTY BY THE FIRST USER.
DOES NOT COVER: CASH SALES, SELLER HELD MORTGAGES,RENTAL OR BUSINESS PROPERTY, CONSTRUCTIONS LOANS WITHOUT PERMANENT FINANCING, CONVERSIONS AND HOMES WITH 25+ ACRES.
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REGULATION X REQUIRES DISCLOSURE?
YES BY THE ORIGINATING PARTY.
- AT APPLICATION
- -GFE AT APPLICATION OR WITHIN 3 BUSINESS DAYS OF APPLICATION WITH NO COST OTHER THAN THE COST OF A CREDIT REPORT.
- -SERVICING DISCLOSURE STATEMENT
- -HUD SPECIAL INFORMATION BOOKLET (ON PURCHASE ONLY)
- UPON REFERRAL-AFFILIATED BUSINESS ARRANGEMENT DISCLOSURE (ABA) UPON REFERRAL OF AN AFFILIATED SETTLEMENT SERVICE PROVIDER
- AT CLOSING-HUD1 SETTLEMENT STATEMENT (OR 1 BUSINESS DAY IN ADVANCE IF REQUESTED)
- AFTER CLOSING-INITIAL ESCROW STATEMENT (AT CLOSING OR WITHIN 30 DAYS AFTER CLOSING)
- -ANNUAL ESCROW STATEMENT
- -TRANSFER OF SERVICING STATEMENT( 15 DAYS BEFORE TRANSFER)
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REGULATION X PROHIBITATION?
- 1. LIMITS THE WORKING ESCROW BALANCE TO $50 ABOVE 1/6 OF THE ANNUAL PAYMENT
- 2. VIOLATION OF SECTION 8 ANTI KICKBACK PROVISION FINES UP TO $10,000 AND OR IMPRISONMENT UP TO ONE YEAR
- 3. KICKBACKS IN EXCHANGE FOR REFERRALS
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