Regulation X

• 1) consumers obtain the right info
• 2) Protect consumers from excessive costs

Added in 2015:

• 3) Limit required escrow deposits
• 4) Establish disclosures, policies, procedures

HUD until 2011, now CFPB

Removed and replaced:

• Good Faith Estimate
• Truth in Lending Disclosure
• HUD-1 Settlement Statement

Added in 2015:

• Loan Estimate Form
• Closing Disclosure

Residential Loans:

• insured by Federal Govt
• regulated by federal govt
• intended for sale to Fannie Mae or Freddie Mac
• Creditors/brokers

• Includes home purchase, refinance, lender-approved assumptions, property investment loans, equity lines of credit, reverse mortgages
• Does not include business, commercial, agricultural, construction loans

an action that influences the selection of a provider of a settlement service

any service provided in connection with a real estate settlement

title searches, title examinations, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property surveys, rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, taking loan applications, loan processing, underwriting and funding loans, handling of the processing, and closing.

Any payment, advance, loan, or service including money, discounts, commissions, salaries, stock, tickets, special rates, and trips at another's expense

To offer things of value in exchange for the referral of settlement business

Paying or accepting unearned fees, or marking up the fee for a a particular settlement service and splitting the overage with the provider

An upcharge in the actual cost of a settlement service and retention of the additional fee. Not a violation unless split between two or more parties.

Example: mortgage company may have an ownership interest in a title company. This must include an affiliated business arrangement disclosure.

Partnership or joint venture established by settlement providers illegally in order to fee-split

Yield spread premium. Fee paid by the lender to the borrower to subsidize closing costs, results in a higher interest rate.

• Special Information Booklet
• Affiliated Business Arrangement Disclosure
• Disclosures Related to Mortgage Servicing
• Disclosures Related to Escrow Accounts

• Due three business days after loan application completion. "Your Home Loan Toolkit: A Step-by-Step Guide":
• -explains settlement process
• -tells them they have the right to negotiate the terms of a loan
• -reviews protections that RESPA creates for borrowers
• -warns of use of false information
• -not required for refinancing, reverse mortgage, or a closed-end loan secured by a subordinate lien
• HELOC receives a special brochure

Must be made/given at the time of making the referral

Transferor of service must provide notice no less than 15 days before effective date. Transferee of service must provide notice no less than 15 days after the transfer (unless combined)

• -requiring an annual escrow account analysis
• -limiting the cushion that a borrower must maintain to one sixth of the estimated total annual disbursements
• -requiring refund of any surplus of at least $50 within 30 days after completion of the year

• within 45 days of settlement (60 days if transferred to a new servicer)
• -mortgage payment and the portion deposited into escrow account
• -itemized taxes, insurance, and other payments to be made from the escrow account during the year
• -the cushion amount selected by servicer
• -trial running balance

• within 30 days of completion of the year
• -an account history and projections for next year
• -statment showing both last year and this year's payments
• -total amount 
• -escrow account balance and explanation of any surplus plans
• -explanation of how to pay any deficiency

not allowed to charge for

• Provide accurate and timely disclosures
• investigate and correct borrower complaints
• respond to requests for info
• etc
• etc
• etc