Real Estate Information |
|
RESPA: The Real Estate Settlement Procedures Act
The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. One of its purposes is to help consumers become better shoppers for settlement services. Another purpose is to eliminate kickbacks and referral fees that increase unnecessarily the costs of certain settlement services. RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers. RESPA also prohibits certain practices that increase the cost of settlement services. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company. Generally, RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD's Office of Consumer and Regulatory Affairs, Interstate Land Sales/RESPA Division is responsible for enforcing RESPA. More RESPA Facts DISCLOSURES: Disclosures At The Time Of Loan Application When borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers: a Special Information Booklet, which contains consumer information regarding various real estate settlement services. (Required for purchase transactions only). a Good Faith Estimate (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use of a particular settlement provider, then the lender must disclose this requirement on the GFE. a Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution. If the borrowers don't get these documents at the time of application, the lender must mail them within three business days of receiving the loan application. If the lender turns down the loan within three days, however, then RESPA does not require the lender to provide these documents. The RESPA statute does not provide an explicit penalty for the failure to provide the Special Information Booklet, Good Faith Estimate or Mortgage Servicing Statement. Bank regulators, however, may impose penalties on lenders who fail to comply with federal law. Disclosures Before Settlement (Closing) Occurs A Controlled Business Arrangement (CBA) Disclosure is required whenever a settlement service provider involved in a RESPA covered transaction refers the consumer to a provider with whom the referring party has an ownership or other beneficial interest. The referring party must give the CBA disclosure to the consumer at or prior to the time of referral. The disclosure must describe the business arrangement that exists between the two providers and give the borrower estimate of the second provider's charges. Except in cases where a lender refers a borrower to an attorney, credit reporting agency or real estate appraiser to represent the lender's interest in the transaction, the referring party may not require the consumer to use the particular provider being referred. The HUD-1 Settlement Statement is a standard form that clearly shows all charges imposed on borrowers and sellers in connection with the settlement. RESPA allows the borrower to request to see the HUD-1 Statement one day before the actual settlement. The settlement agent must then provide the borrowers with a completed HUD-1 Settlement Statement based on information known to the agent at that time. Disclosures at Settlement The HUD-1 Settlement statement shows the actual settlement costs of the loan transaction. Separate forms may be prepared for the borrower and the seller. it is not the practice that the borrower and seller attend settlement, the HUD-1 should be mailed or delivered as soon as practicable after settlement. The Initial Escrow Statement itemizes the estimated taxes, insurance premiums and other charges anticipated to be paid from the escrow account during the first twelve months of the loan. It lists the escrow payment amount and any required cushion. Although the statement is usually given at settlement, the lender has 45 days from settlement to deliver it. Disclosures After Settlement Loan servicers must deliver to borrowers an Annual Escrow Statement once a year. The annual escrow account statement summarizes all escrow account payments during the servicer's twelve month computation year. It also notifies the borrower of any shortages or surpluses in the account and advises the borrower about the course of action being taken. A Servicing Transfer Statement is required if the loan servicer sells or assigns the servicing rights to a borrower's loan to another loan servicer. Generally, the loan servicer must notify the borrower 15 days before the effective date of the loan transfer. As long the borrower makes a timely payment to the old servicer within 60 days of the loan transfer, the borrower cannot be penalized. The notice must include the name and address of the new servicer, toll-free telephone numbers, and the date the new servicer will begin accepting payments. Respa's Consumer Protections And Prohibited Practices Section 8: Kickbacks, Fee-Splitting, Unearned Fees 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. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed. Violations of Section 8's anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service. Section 9: Seller Required Title Insurance Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance. Section 10: Limits on Escrow Accounts Section 10 of RESPA sets limits on the amounts that a lender may require a borrower to put into an escrow account for purposes of paying taxes, hazard insurance and other charges related to the property. RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs or lenders may require escrow accounts as a condition of the loan. At settlement, Section 10 of RESPA prohibits a lender from requiring a borrower to deposit more than the aggregate amount needed to cover escrow account payments for the period since the last charge was paid, up until the due date of the first mortgage installment. During the course of the loan, RESPA prohibits a lender from charging excessive amounts for the escrow account. Each month the lender may require a borrower to pay into the escrow account no more than 1/12 of the total of all disbursements payable during the year, plus an amount necessary to pay for any shortage in the account. In addition, the lender may require a cushion, not to exceed an amount equal to 1/6 of the total disbursements for the year. The lender must perform an escrow account analysis once during the year and notify borrowers of any shortage. Any excess of $50 or more must be returned to the borrower. Respa Enforcement Civil law suits Individuals have one (1) year to bring a private law suit to enforce violations of Section 8 or 9. A person may bring an action for violations of Section 8 or 9 in any federal district court in the district in which the property is located or where the violation is alleged to have occurred.HUD, a State Attorney General or State insurance commissioner may bring an injunctive action to enforce violations of Section 8 or 9 of RESPA within three (3) years. Loan Servicing Complaints Section 6 provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer's required payment. A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, against a servicer who fails to comply with Section 6's provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance. Other Enforcement Actions Under Section 10, HUD has authority to impose a civil penalty on loan servicers who do not submit initial or annual escrow account statements to borrowers. Borrowers should contact HUD's Office of Consumer and Regulatory Affairs to report servicers who fail to provide the required escrow account statements. Filing a RESPA Complaint Persons who believe a settlement service provider has violated RESPA in an area in which the Department has enforcement authority (primarily sections 8 and 9), may wish to file a complaint. The complaint should outline the violation and identify the violators by name, address and phone number. Complainants should also provide their own name and phone number for follow up questions from HUD. Requests for confidentiality will be honored. Complaints should be sent to: Director, Interstate Land Sales/RESPA Division Office of Consumer and Regulatory Affairs More information about RESPA, including the complete text of the statute, updates, proposed modifications, etc, can be found at the RESPA Home Page, which is part of the FHA Housing Web site. Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. She can be reached at (800) 536-3806 or visit her website for more information: http://neda.dabestani.pcragent.com/ Prudential Carruthers REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.
MORE RESOURCES: Real estate experts share a message for home buyers as they predict rising home prices through 2025 Fox Business The Folly of China's Real-Estate Boom Was Easy to See, but No One Wanted to Stop It The Wall Street Journal As RREAF CEO Kip Sowden weighs future, son Graham waits his turn The Dallas Morning News Big San Jose manufacturing and industrial project pushes forward The Mercury News Judge Approves $418 Million Settlement That Will Change Real Estate Commissions - The New York Times How real estate commission changes could affect buyers and sellers The Washington Post I'm A Real Estate Agent: Here's What Will Happen to the Housing Market If Rent Keeps Rising Yahoo Finance reAlpha Tech Corp. Launches Claire, Real Estate's First AI-powered, Zero-Commission Smart Buyer's Agent Yahoo Finance Agencies' headquarters in DC remained 'nearly empty' in 2023, real-estate board finds Federal News Network real estate market and insurance Sacramento Appraisal Blog Blackstone's Beleaguered Real-Estate Fund Stems Exodus The Wall Street Journal Public records: Muskingum County, Ohio, real estate transfers Zanesville Times Recorder @properties Christie's International Real Estate Taps Industry Leader to Expand in Fort Worth - CandysDirt.com CandysDirt.com Home in Silver Hills North an oasis in Prattville | REAL ESTATE Montgomery Advertiser Homes for Sale in New York and Connecticut The New York Times Homes for Sale in Manhattan and Queens The New York Times Reversing the Real-Estate Doom Loop Is Possible. Just Look at Detroit. The Wall Street Journal Spokane-based Haven Real Estate Group acquired by Epique Realty Spokane Journal of Business Real Estate Transfers: April 25, 2024 - Riverhead News Review Riverhead News Review Top residential real estate sales for April 8-12 in Sarasota, Siesta Key, Palmer Ranch, Osprey, Nokomis Your Observer Philly's luxury penthouses; Linden Hill Estate in Gladwyne up for auction The Philadelphia Inquirer Real Estate Property Transfers in Franklin for April 1, 2024 Williamson Source Inside Savannah Homes $3.1M Tybee home with panoramic ocean view Savannah Morning News Kevin Owens joins Scottsdale-based Lessen real estate company | Scottsdale Independent Daily Independent ANYWHERE REAL ESTATE INC. REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS Longview News-Journal Pigford marks 50 years as licensed real estate agent Meridian Star Better Homes and Gardens Real Estate Metro Brokers extends affiliation agreement for 10 years Atlanta Agent magazine reAlpha Tech Corp. Launches Claire, Real Estate's First AI-powered, Zero-Commission Smart Buyer's Agent Business Wire Pro boxer Caleb Truax retiring to become Twin Cities real estate agent - Minneapolis / St. Paul Business Journal Minneapolis / St. Paul Business Journal Quebec Real Estate Investor Luc Poirier Looks to South Shore Brossard for Future Growth CoStar Group The Highest Paid Execs in Real Estate Mike DelPrete Who's Who in Residential Real Estate 2024: Berkshire Hathaway agents - Pittsburgh Business Times The Business Journals Tricon Residential Inc. Announces Receipt of Investment Canada Act Approval for Take Private by Blackstone Real ... Yahoo Finance CoStar Group acquires Matterport for digitalizing real estate GIM International Top Transfers: 65,000 sq. ft. Dublin property sells for $7.85 million The Columbus Dispatch Real estate transfers GoDanRiver.com Massachusetts housing crisis: Greater Boston Real Estate Board campaign slams transfer fees Boston Herald Positive week for Mivne Real Estate (K.D) Ltd (TLV:MVNE) institutional investors who lost 6.9% over the past year Simply Wall St Manhattan Real Estate Update: "Embrace the Boredom" westsiderag.com Recent commercial real estate transactions - 4/24/24 BizTimes Milwaukee Bedford board votes to keep real estate tax rate level Lynchburg News and Advance Baltimore City: See how much real estate prices increased the week of Dec. 11 - The Baltimore Banner Baltimore City: See how much real estate prices increased the week of Dec. 11 The Baltimore Banner What changes to real estate industry commissions could mean for you | Dollars & Sense ABC10.com KXTV Invest DSM selects real estate firm to manage mixed-use building in Highland Park Local 5 - weareiowa.com Collierville shopping center sold to Atlanta-based real estate firm - Memphis Business Journal The Business Journals How restaurants can tailor real estate strategies to an uncertain market Restaurant Business Online Rockford Is Now America's Top Housing Market After an Improbable Turnaround The Wall Street Journal California, United States Luxury Real Estate Home California Listings Big changes coming to commissions in July ABC10.com KXTV Real Estate Sales Include Two Falconer Commercial Properties Jamestown Post Journal Choice Properties Real Estate Investment Trust Reports Results for the Three Months Ended March 31, 2024 Business Wire Banks Believe They Are Well-Prepared for Commercial Real Estate Fallout The Wall Street Journal Is The Housing Market Going To Crash? Bankrate.com Fennemore renews Biltmore lease with smaller footprint amid firm's national expansion - Phoenix Business Journal The Business Journals Pod People on KWTX@4: Meet the podcast host of "Mosaic - The Stories of Real Estate." - 4.24.24 KWTX PEA Group buys ASTI Environmental Crain's Detroit Business Sponsor our real estate and development series Racine County Eye Homebuyers and sellers might spend less following major real-estate settlement - Evanston RoundTable Homebuyers and sellers might spend less following major real-estate settlement Evanston RoundTable Woman shocked to learn her Hamptons home was fraudulently listed on Airbnb after call to wire $25K New York Post A 19th Century Real Estate Covenant has Shaped Brooklyn Heights and Incited Litigation Brooklyn Heights Blog Inside Bill Gates' real estate, from his Seattle to Florida houses Business Insider |
RELATED ARTICLES
The Secret to Maximum Real Estate Profits: Lighting Lighting is the most important detail of interior Design Psychology for selling houses. Lighting influences a prospective buyer's feelings within a space more than any other interior design element. The Bubble Effect Turn on the TV at almost any time day or night and you will find news and talk shows informing us that there is a Real Estate bubble. What is a "bubble" and how do they know? The simple principle of what goes up must come down is being applied in general thought now and many in the public are starting to buy it. Home Owner Association Restrictions - Read Before Buying Many communities have associations for homeowners, property owners, condo owners, or similar associations. The presence of a homeowners association, also known as "HOA", introduces another layer of rules and regulations to consider when buying a home. Getting Ready to Sell Your Property We all have had the experience of someone important coming to the house and whether the visitor is an in-law, an old friend, or business associate you know the drill: Have the house in "show" condition.For investors the situation is much the same: First impressions count!!!! Even though you may not be able to tell a book by its cover, you'll probably pay more for a book if the cover is inviting, and attractive. Do I Have To Buy Real Estate Through An Agent? Sometimes when we are very busy professionals and very rich it might be convenient to let an agent do the groundwork for us. Letting them make appointments, drive to the property, roam through house after house sizing them up until they find a few great homes that might be just perfect for us. Tenant/Buyers Have Multiple Options Lease Purchasing affords the tenant/buyer a wonderful opportunity to get into a home today, that he or she can buy tomorrow. But what options are available at the end of the contract? Fortunately, Lease Purchasing provides multiple options here also. Selling by Owner Escrow or Closing Checklist Home sellers should keep on top of their pending sale; especially when selling without the assistance of a real estate agent. Sometimes busy real estate agents forget to monitor all aspects of a pending sale. Selling Your Home Yourself - Pricing It Appropriately When you're selling your own property, whether it's a house, townhouse, condo, apartment, a finished lot, raw land, a farm, a ranch, or whatever, the first thing to get right is the price you ask for it. If you work with a broker, the legwork is done for you. Important Information For Condo Buyers Here is a step by step guide for buyers looking to buy a condo in any area. These are important tactics to make a solid and accurate judgement on the property you're looking to purchase. Find Out If There Are Sexual Predators Nearby Before You Buy A Home or Property! When looking for a new home or property, buyers ask many questions. Typical questions might be about the history of the property, property tax amounts, the school system, proximity to medical facilities, shopping malls, etc. California Home Seller Disclosure Duties Property Condition - Seller's What to Expect During the Inspection ProcessThe Transfer Disclosure Statement (T.D. Title Insurance - Examples of Problems and Advice What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn't the attorney or settlement company handling the closing see to it that you have a clear title? Isn't this just another way for someone to siphon a few coins off a real estate transaction?Title InsuranceTitle insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead. Every mortgage lender I'm aware of requires title insurance be purchased to cover the amount of the mortgage. Homes For Sell By Owner - FSBOs and Buyer Brokers You're selling your home as a FSBO (for sale by owner) and you get annoyed when real estate brokers call you, right? That's a reasonable response when you're doing all the work to market your property to save thousands of dollars in broker commissions. However, when a "buyer broker" calls, you might want to listen. Cheap, Bargain, Real Estate; Good Deals, Below Market, Low Priced Properties Are Available... Cheap, Bargain, Real Estate; Good Deals, Below Market, Low Priced properties are available if you know how to buy them. By Jody Hudson - Realtor since 1972. Dealing With Dual Real Estate Agents Historically, real estate agents have represented the seller of a property. The seller, after all, is usually the one who pays their commission, and agents therefore have a fiduciary relationship with the seller. Where is the Sophisticated Property Investor Putting his Money? The Traditional FavouritesOver the last five to ten years, UK investors buying property abroad have generally stuck to the traditional favourites Spain, France and Italy. With prices a fraction of those in the UK and a guarantee of more sunshine, these markets offered plenty of scope for capital appreciation, rental return and holiday home use. Real Estate Investing: America Rents Most people in America rent a personal dwelling!Just think how many families rent a house or an apartment, a duplex or a condo.Yet, nobody prefers renting. 18 Easy Steps to Buy a Bargain House What is a "distressed" property? What is "bargain" real estate?A distressed property is one with a distressed seller. Job loss or transfer, divorce, death, pending foreclosure, and lack of money cause sellers to sell fast for less. How to Prequalify a Buyer When You Sell Your Home By Owner One questions many "for sale by owner" sellers ask is "how can I determine if a potential buyer can afford to buy my house?" In the real estate industry this is referred to as "pre-qualifying" a buyer. You might think this is a complex process but in reality it is actually quite simple and only involves a little math. Property Investing - Port Melbourne Life on the Edge Property investing prices pick up following a cooler winter last year. Susannah Petty Reports. |
home | site map |
© 2006 TIGER MEDIA |