Real Estate Settlement Procedures Act (RESPA)

This is a policy guide to comply with the provisions under the Real Estate Settlement Procedures Act (RESPA) for mortgage lenders and mortgage brokers. This a separate policy guide. Once purchased this guide will be customized to your specifications. You will receive an immediate invoice receipt with a download link to a questionnaire with some simple questions to answer and receive your customized guide within 24-48 hours. This is written for independent mortgage bankers but can be customized for depository financial institutions and credit unions. 

Table of Contents

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) POLICY

• PURPOSE
• SCOPE
• EXEMPTIONS

PROHIBITIONS ON KICKBACKS AND UNEARNED FEES (SECTION 8)

• AFFILIATED BUSINESS ARRANGEMENTS
• KICKBACKS
• UNEARNED FEES
• MARKETING SERVICE AGREEMENTS (MSAS)
• REFERRALS FOR A “THING OF VALUE”
• COMPENSATION TO MORTGAGE BROKERS
• PERMISSIBLE FEES
• SELLER PROHIBITION (SETTLEMENT SERVICE)

ESCROW ACCOUNTS

• INITIAL ESCROW ACCOUNT ANALYSIS
• ESCROW ACCOUNT ESTABLISHMENT AT LOAN CLOSING
• LIMITATION ON PAYMENTS TO ESCROW ACCOUNTS
  • Charges at Closing (or Upon Creation of an Escrow Account)
  • Charges During the Life of the Escrow Account
• ESCROW ACCOUNT ESTABLISHMENT POST-CLOSING
• ANNUAL ESCROW ACCOUNT ANALYSI
  • No Annual Statements in the Case of Default, Foreclosure, or Bankruptcy
• ESCROW ACCOUNT SURPLUS, SHORTAGE OR DEFICIENCY
• TIMELY PAYMENTS
• FORCE-PLACED HAZARD INSURANCE FOR PAST-DUE BORROWERS
• DISCRETIONARY PAYMENTS – CREDIT LIFE

DISCLOSURES

• GOOD FAITH ESTIMATE
• Disclosure Timing
  • Adverse Action within 3 Days of Application
  • Availability of GFE Terms
  • Tolerances for Amounts Included on the GFE
• TOLERANCE CURE
• CHANGED CIRCUMSTANCES
• REQUIRED SERVICE PROVIDERS
• SPECIAL INFORMATION BOOKLET
  • Adverse Action within 3 Days of Application
• ADJUSTABLE-RATE MORTGAGE LOANS
• HELOC LOANS
• HUD-1 OR HUD-1A SETTLEMENT STATEMENT
  • Cure - Inadvertent or Technical Errors
• AFFILIATED BUSINESS ARRANGEMENT DISCLOSURE STATEMENT
  • Required Use of Affiliates
  • Restriction on Payments
• INITIAL MORTGAGE SERVICING TRANSFER DISCLOSURE
• HOMEOWNERSHIP COUNSELING NOTICE
  • Current Information
  • Exemptions
  • Adverse Action within 3 Days of Application
• ESCROW ACCOUNT DISCLOSURES
  • Initial Escrow Account Disclosure Statement
  • Escrow Accounts Established Post-Closing
  • Annual Escrow Account Statements
• FORCE-PLACED HAZARD INSURANCE NOTICE

RECORD RETENTION

• SECTION 8 RECORDS
• GOOD FAITH ESTIMATE
• HUD-1 OR HUD-1A SETTLEMENT STATEMENT
• AFFILIATED BUSINESS ARRANGEMENT DISCLOSURE
• ESCROW ACCOUNTS

APPENDIX A – RESPA DEFINITIONS

• Definition of ‘Application’ Under RESPA versus TRID
• Changed circumstances do not include