• To allow consumers to obtain information on the cost of closing so that they can shop for settlement services.  RESPA uses mandatory disclosure requirements to ensure that consumers  obtain information on closing costs.
•  To protect consumers from excessive settlement costs and unearned fees. RESPA establishes president practices to protect consumers from unearned fees. 

Dodd-Frank Act

•  amends federal lending laws 
•   Authorized the establishment of the consumer financial protection bureau (CFPB), which is focused first and foremost onprotecting consumers in the financial market place 

2010 Dodd–Frank wall street reform and consumer protection act 

  Consumer financial protection bureau

•  Is focused first and foremost on protecting consumers in the financial market place 

 Federal trade commission 

•  A federal agency with responsibilities that include enforcing compliance  with federal lending laws 

 The department of housing and urban development 

•  It's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. 
•  It's commitment to fordable housing communities that are free from discrimination. 

United States code

• Contains federal laws.

 Code of federal regulations

• Contains implementing regulations for federal laws 

• protect consumers from excessive settlement costs and under and fees
•  Limit the amount of funds that creditors can require consumers to deposit into escrow accounts 
•  Establish disclosures, policies, and procedures to facilitate timely communications between loan servicers and consumers 

CFPB (consumer financial protection bureau)

 July 21, 2011 

•  Protect consumers from excessive settlement costs and unearned fees 
•  Limit the amount of funds the creditors can require consumers to deposit into escrow accounts 
•  Establish disclosures policies and procedures to facilitate time we communications between loan servicers and consumers 

•   Made with funds insured by the federal government 
•  Made with collateral insured by the federal gvrnmt 
•  Meet with funds from the lender regulated by the federal government 
•  Intended for sale to Fannie Mae or Freddie Mac 
•  Made by credit or regulated the truth in lending act 
•  Made by a mortgage broker and assigned to a creditor, if they are federally related 

 Most loans secured by Eileen (first or subordinate position) on residential properties.

 Home purchase loans, refinances, lender approved assumptions, property improvement loans, equity lines of credit, and reverse mortgages. 

•  Loans for business, commercial,  agricultural purposes 
•  Temporary financing, such as construction loans ( if the loan may be converted to permanent financing by the same lender, the exemption doesn't apply)
•  Secured by vacant land ( A loan is secured by vacant or unimproved property when noodle proceeds of the loan will be used to construct a 1 to 4 family residential structure. If the proceeds will be used to locate a manufactured home or construct a structure within two years from the settlement day, be balloon is not exempt. )
•  Assumptions which are permissible without lender approval 
•  Transactions between lenders and investors for the sale of a close loan to a purchaser in the secondary market ( such as the sale of the loan to Fannie Mae or Freddie Mac )
•  Loan conversions, when a new note is not required and the provisions are consistent with those of the original mortgage 

 And a charger in the actual cost of the settlement service and retention of the additional fee. The Supreme Court has held that and less of a church split between two parties, a violation of the RESPA has not occurred. 

 While unilateral mark ups without Facebook and do not violate RESPA, the truth in lending act include a rule stating that the amount charged for settlement services may not exceed the amount actually received by the settlement service provider for that service. 

 Mini service providers have a business relationship and an ownership interest in other settlement service providers. For example, a mortgage company may have ownership interest in the title company. Profit-sharing between these affiliate companies is permissible under RESPA.

 Can communicate to borrower, of the relationship, with a "affiliated business arrangement disclosure "

 A partnership or joint venture created between settlement service providers for the legal purpose of splitting fees under the guise of a bona fide affiliated business arrangement.

" policy statement on Cham controlled business arrangements "outlines the factors that are considered in determining whether an affiliated business arrangement is legitimate. How does no longer responsible for implementing and enforcing RESPA, but the CFPB continues to follow the guidelines in HUD's policy statement when evaluating an affiliated business to determine if it is legitimate or a sham.

YSP "Yield spread premium"

 It is a fee paid to the bar were by the lender when alone is originated at a higher interest-rate in the lowest rate for which the bar with qualifies. It is used to subsidize closing cost, such as the origination or broker fee, because it is financed so that out-of-pocket closing costs are "borrowed" from the lender 

 The CFPB in 2015 updated the settlement cost booklet, for home purchase transactions, to: 

 What is provided in this booklet?

"Your home loan toolkit: a step-by-step guide"

•  Explains a settlement process
•  Tells bar where is that they have the right to negotiate the terms of the loan 
•  Reviews the protections that RESPA created for borrowers 
•  Warns borrowers that their use of false information on a loan application can lead to loss of their home, a poor credit rating, and even criminal prosecution for  fraud 

 " your home loan tool kit: a step-by-step guide "

allowances

• creditors are very limited in the changes they can make to the booklet; they are, however, allowed to add their contact information to its cover. 
•  If there are multiple borrowers, such as spouses, only one disclosure is necessary and maybe provided to anyone of the borrowers. 
•  The booklet may also be reproduced into any form,  stamps with a mortgage professionals contact information and translated into any language. 

"What you should know about your home equity line of credit"  are used for what type of loan?

what regulation requires that the special information booklet be provided?

 Open end loan  

 Regulation Z 

•  A refinancing 
•  I closed-end loan secured by a subordinate lien
•  Reverse mortgage loan 

 When should a settlement service provider, who refers an applicant to an affiliated business for settlement services,  disclose to a loan applicant of the affiliated business arrangement? 

 The disclosure must: 

 At the time of making the referral.

•  Describe the business arrangement, including the percentage of ownership of the interests of the referring party and the service provider 
•  Indicate that the referral may result in a financial benefit for the referring party 
•  Estimate the cost that will be charged by the provider to whom the loan applicant is referred 
•  Advise the borrower that he/she is not required to use the service provider to whom he/she was referred and that other providers are available ( note, however, that lenders can require the use of a particular attorney, appraiser, and credit reporting agency )

 What is the requirement that records have to be retained for affiliated business arrangement disclosure's?

Who imposes this requirement? 

 Five year record retention 

 RESPA 

 What is a transferor servicer?

Tranferee servicer? 

 Who imposes their requirements?

  The entity that is making the transfer - must provide notice to the consumer no less than 15 days before the effective date of the transfer of servicing.

 The entity that receives servicing rights – must provide notice to the consumer no less than 15 days after the transfer.

 RESPA and Regulation X 

 Notice of transfer of servicing rights must include all the following: 

* if a consumer sends an on-time payments to the transfer of service are doing a 60 day period that begins on the effective date of the transfer, the payment may not be treated as late for any reason 

•  The effective date of transfer.
•  I name, address, and toll-free phone number that the consumer can use to contact the transferee servicer for any questions about the transfer.
•  The date on which the transferor servicer will no longer except payments and the transferee will except them ( these must be the same day or consecutive dates )
•  And indication of whether the transfer will impact the continued availability of optional insurance products 
•  Statement that the transfer does not change the terms or conditions of the mortgage