Real Estate Settlement Procedures Act (RESPA)

Question 1

The Real estate settlement procedures act (RESPA) is a consumer protection law administered by the _______

Answer 1

Consumer Financial Protection Bureau

RESPA aims to help consumers understand the costs associated with buying a home.

Question 2

What does RESPA say about affiliated businesses?

Answer 2

Affiliated businesses must disclose their relationship when a referral is made

This requirement helps ensure transparency in real estate transactions.

Question 3

What does RESPA say about having a buyer use a specific title insurance company?

Answer 3

Prohibits seller from requiring the buyer to use a particular title insurance company as a condition of sale

This protects buyers from being forced into potentially unfavorable agreements.

Question 4

What does RESPA say about limits on what to place into escrow?

Answer 4

Limits the amount lenders can require borrowers to place in escrow for property taxes and hazard insurance

This ensures that borrowers are not overcharged for escrow accounts.

Question 5

What other three things are illegal under RESPA?

Answer 5

kickbacks, fee-splitting, and unearned fees

These practices can lead to inflated costs for consumers and are strictly prohibited.