Real Estate Settlement Procedures Act (RESPA)

Which loan would be subject to the Real Estate Settlement Procedures Act (RESPA) if the property being purchased is security for the loan? A. A mortgage loan to Marcia and Peter for a vacation condo on the beach B. A temporary construction loan to Bridgett and Rita to build their first home C. A loan to Victoria and Max to purchase ten acres of vacant property D. A loan to Mitchell to build a restaurant and gas station

A. A mortgage loan to Marcia and Peter for a vacation condo on the beach

Based on the Real Estate Settlement Procedures Act (RESPA) provisions, which lender or mortgage service practice in real estate transactions is required in order to protect consumers? A. Disclose settlement service fees in advance B. Create referral alliances C. Transfer loans to different mortgage servicers immediately after closing D. Establish escrow accounts to handle tax payments and hazard insurance premiums

A. Disclose settlement service fees in advance

Riley's manager had a reasonable basis to believe Ms. Hamilton had failed to maintain hazard insurance and directed Riley to start the force placement procedures. Riley sent the required notices timely. After receiving the second notice, Ms. Hamilton provided a hazard insurance policy declarations page to the bank that verified she had a hazard insurance policy in place 60 days ago. Which option states one of Riley's appropriate next steps? A. Refund all force-placed insurance premium charges and related fees paid by the borrower within 15 days of receiving evidence that Ms. Hamilton has hazard insurance B. Cancel the force-placed insurance within 60 days of receiving evidence that Ms. Hamilton has hazard insurance C. Refund Ms. Hamilton's overlapping force-placed insurance premium charges by the end of the escrow account computation year D. Offer Ms. Hamilton the force-placed insurance at a discount price as an alternative

A. Refund all force-placed insurance premium charges and related fees paid by the borrower within 15 days of receiving evidence that Ms. Hamilton has hazard insurance

Regarding the Affiliated Business Arrangement Disclosure (AfBA), which statement is true? A. The AfBA must identify the provider of the settlement service B. The AfBA can be combined with other RESPA disclosures C. The AfBA should describe the benefits consumers will gain by doing business with the affiliate D. The AfBA must omit any estimate or range of charges

A. The AfBA must identify the provider of the settlement service

What is the purpose of providing the list of homeownership counseling organizations? A. To educate people about mortgages and home ownership before becoming obligated to a mortgage B. To help borrowers select the homeownership counseling organization closest to the branch where the applicant's loan officer is located C. To ensure homeownership counseling organizations stay in business so they can continue to serve bank customers D. To inform people about the advantages and disadvantages of using a mortgage broker

A. To educate people about mortgages and home ownership before becoming obligated to a mortgage

Within how many days prior to the time the list of homeownership counseling organizations is provided to the loan applicant must the lender obtain the list to minimize the chance that the list will be outdated? A. 45 days B. 30 days C. 20 days D. 10 days

B. 30 days

During the _________ period beginning on the effective date of transfer of the servicing of any mortgage loan, if the transferor servicer (rather than the transferee servicer that should properly receive payment on the loan) receives payment on or before the applicable due date, a payment may not be treated as late for any purpose. A. 30-day B. 60-day C. 90-day D. 120-day

B. 60-day

Which loan would be subject to the Real Estate Settlement Procedures Act (RESPA)? A. An assumption of mortgage loan without lender approval B. A reverse mortgage loan C. A temporary bridge loan D. A loan to purchase a strip mall

B. A reverse mortgage loan

MNO Bank refers applicants and customers to an affiliated settlement service provider but does not require the use of any particular provider. When does the Real Estate Settlement Procedures Act (RESPA) require the bank to provide an Affiliated Business Arrangement Disclosure (AfBA) to their applicants and customers? A. At the time of loan application B. At the time of each referral C. At the time of loan settlement D. At the time of the escrow account creation

B. At the time of each referral

There are numerous prohibitions identified in the Real Estate Settlement Procedures Act (RESPA). Which activity is permissible by a bank? A. Receiving a discount on legal services from an attorney to which the creditor refers exclusive business B. Charging for settlement services actually performed C. Agreeing to refer all business to a settlement service provider for a fee D. Providing activities conditioned on the referral of business

B. Charging for settlement services actually performed

Erin works in the Servicing Department of My Friendly Bank and is responsible for responding to notices of errors and requests for information. How long does Erin have to generally acknowledge the request or notice of error? A. Three business days B. Five business days C. Six business days D. 10 business days

B. Five business days

The Real Estate Settlement Act (RESPA) requires many disclosures. Which disclosure helps consumers calculate how much they can afford for a home, provides consumers questions to ask their lenders, and features worksheets and checklists to complete during the process? A. Good Faith Estimate B. Your Home Loan Toolkit C. HUD-1 Settlement Statement D. Affiliated Business Arrangement Disclosure

B. Your Home Loan Toolkit

Within how many business days after receiving an application must the lender provide a list of homeownership counseling organizations? A. 1 B. 2 C. 3 D. 4

C. 3

By what business day of a borrower's delinquency must a servicer provide a borrower a written notice with information about loss mitigation options? A. 15th day B. 36th day C. 45th day D. 60th day

C. 45th day

Which loan below would be subject to the Real Estate Settlement Procedures Act (RESPA) if the property being purchased is the security for the loan? A. A temporary bridge loan B. A vacant land loan C. A purchase money mortgage D. A business purpose loan

C. A purchase money mortgage

The Real Estate Settlement Act (RESPA) requires that lenders provide loan applicants with a disclosure of their actual settlement costs. What is the name of this disclosure? A. Your Home Loan Toolkit B. Servicing Disclosure Statement C. HUD-1 Settlement Statement D. Good Faith Estimate

C. HUD-1 Settlement Statement

Marci is eager to increase her business referrals as a mortgage loan officer. She has been studying Real Estate Settlement Procedures Act (RESPA) and knows that certain referral activities are prohibited. What is one activity that Marci is allowed to do under RESPA? A. Marci may pay a fee to a realtor that refers her business B. Marci may pay for a seminar for brokers as long as they refer mortgage business to her C. Marci may provide normal promotional brochures to builders not conditioned on the referral of business D. Marci may pay a lump sum to any builder for each referral, as long as there is no explicit agreement

C. Marci may provide normal promotional brochures to builders not conditioned on the referral of business

Justin works in the Servicing Department at Decker Bank and the bank has a reasonable basis to believe that one of its borrower's, Mr. Avalon, has failed to maintain hazard insurance. Justin sent the required initial notice 45 days before charging Mr. Avalon for force-placed insurance. After the initial notice has been sent, when must Justin send the second reminder notice? A. No earlier than 5 days after the first notice and at least 5 days prior to the charge B. No earlier than 10 days after the first notice and at least 10 days prior to the charge C. No earlier than 30 days after the first notice and at least 15 days prior to the charge D. No earlier than 40 days after the first notice and at least 5 days prior to the charge

C. No earlier than 30 days after the first notice and at least 15 days prior to the charge

What is one protection afforded consumers under the Real Estate Settlement Procedures Act (RESPA)? A. Protection from selecting undesirable properties B. Protection from settlement service fees C. Protection from kickbacks and unearned fees D. Protection from mortgage brokers

C. Protection from kickbacks and unearned fees

Which statement is true regarding the provisions in the mortgage servicing rules regarding assistance for delinquent borrowers? A. Servicers must make a good faith effort by the fifth day of their delinquency to establish live contact that inform borrowers of available loss mitigation options B. Servicers must provide borrowers a written notice by the 60th day of a borrower's delinquency with information about loss mitigation options C. Servicers must consider all loss mitigation options for which the borrower may be eligible within 30 days, if a complete loss mitigation application is received more than 37 days before a foreclosure sale D. Servicers must provide the borrower with a verbal decision that includes an explanation of the reasons for denying the borrower's request for any loan mitigation remedy

C. Servicers must consider all loss mitigation options for which the borrower may be eligible within 30 days, if a complete loss mitigation application is received more than 37 days before a foreclosure sale

Manuel works in the Servicing Department at Montana Rural Bank. The bank sold the servicing of a group of loans to New Mexico Standard Bank. Manuel has received a loan payment from one of the borrowers in the sold pool of loans. What must Manuel do with the payment? A. Transfer the payment to New Mexico Standard Bank for application to the borrower's mortgage loan account or wait for the person that made the payment to contact Montana Rural Bank B. Contact New Mexico Standard Bank to ask what it wants Montana Rural Bank to do with the payment or return the payment to the person that made the payment within 60 days C. Transfer the payment to New Mexico Standard Bank for application to the borrower's mortgage loan account or return the payment to the person that made the payment and notify that person of the proper recipient of the payment D. Transfer the payment to New Mexico Standard Bank for application to the borrower's mortgage loan account or contact the person that made the payment within 60 days

C. Transfer the payment to New Mexico Standard Bank for application to the borrower's mortgage loan account or return the payment to the person that made the payment and notify that person of the proper recipient of the payment

According to the Real Estate Settlement Act's (RESPA's) mortgage servicing rules, how many business days do servicers have to correct errors asserted by borrowers and provide borrowers written notification of the correction, or to investigate and provide borrowers written notification that no error occurred? A. 1 to 10 business days B. 10 to 15 business days C. 10 to 30 business days D. 7 to 45 business days

D. 7 to 45 business days

If a servicer has a reasonable basis to believe the borrower has failed to maintain hazard insurance, the servicer may force place hazard insurance in certain instances. In this case, when must a servicer send an initial notice to the borrower before charging the borrower for force-placed insurance? A. At least 15 days B. At least 20 days C. At least 30 days D. At least 45 days

D. At least 45 days

An important disclosure required under the Real Estate Settlement Act (RESPA) is one that informs the customer of the amount of funds required for the establishment of an escrow account. What is this disclosure called? A. Escrow Cancellation Notice B. Optional Escrow Account Notice C. Annual Escrow Account Disclosure D. Initial Escrow Account Disclosure

D. Initial Escrow Account Disclosure

Sally McDaniel is refinancing with a different bank. Sofia in the bank's Servicing Department has received Sally's written request for an accurate payoff balance. How soon after receipt of Sally's written request must Sofia provide the accurate payoff balance? A. Two business days B. Three business days C. Five business days D. Seven business days

D. Seven business days

Which activity below is permitted under RESPA? A. The seller may require homebuyers to purchase title insurance from a particular company B. Payments may be made for normal promotional activities conditioned on the referral of business C. The bank may charge a fee for completion of the Good Faith Estimate and HUD-1 D. The bank may charge a reasonable fee for completion of the note and security agreement

D. The bank may charge a reasonable fee for completion of the note and security agreement

Sharon, a bank loan officer, refers mortgage applicants to the affiliated title insurance company for settlement services. She needs to prepare the Affiliated Business Arrangement Disclosure (AfBA). Which item is required in this disclosure? A. The bank's income statement B. The benefits consumers will gain by doing business with the affiliate C. The range of charges of other similar title insurance companies in the local area D. The nature of the relationship between the bank and the affiliate

D. The nature of the relationship between the bank and the affiliate

Which statement is true about the mortgage servicing transfer notice? A. The transferor servicer must provide the notice of transfer to the borrower not less than 30 days before the date of the transfer B. The transferee servicer must provide the notice of transfer to the borrower not more than 30 days after the effective date of the transfer C. For 90 days after the date of transfer, if the borrower sends a payment to the transferor servicer by the due date (including any applicable grace period), the payment may not be treated as late D. The transferor and transferee servicers may provide a single notice that is provided not less than 15 days before the date of the transfer

D. The transferor and transferee servicers may provide a single notice that is provided not less than 15 days before the date of the transfer