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How can RESPA help you avoid needless loan settlement costs?

[b:49935b7cb6]RESPA[/b:49935b7cb6] ([b:49935b7cb6]Real Estate Settlement Procedures Act[/b:49935b7cb6]) is a consumer protection statute passed in 1974 and its main purpose is to help you get equipped with the settlement services. In addition, it also aims to reduce unnecessary costs included in the settlement cost of the loan.

Section 8 of RESPA Statute prohibits consumers from paying a fee or anything of value in exchange for referrals of settlement services involved in mortgage loan.

Section 9 of RESPA states that a seller should not ask a buyer to use a title insurance company, either directly or indirectly, as a condition of sale.

Section 10 of RESPA sets limits on the amounts that a lender may require a borrower to deposit into an escrow account for the purposes of paying taxes, hazard insurance and other fees related to the property.

RESPA gives the buyer a right to receive disclosures which speak out clearly about the costs associated with the settlement. Mortgage broker/lender must provide you with:
[list:49935b7cb6][*:49935b7cb6]An Information booklet - Consists of consumer information regarding different real estate settlement services.

[*:49935b7cb6]A Good Faith Estimate (GFE) - Gives an estimate of the settlement costs that a borrower needs to pay.

[*:49935b7cb6]Mortgage Servicing Disclosure Statement - It informs the borrowers as to whether the lender will service the loan or transfer it to another lender.

[*:49935b7cb6]Disclosure for escrow Account - This statement states how your escrow account will be managed by the lender or whether he will hand over the charge to someone else.[/list:u:49935b7cb6]

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

what are the RESPA required disclosures after settlement/closing

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

colin's picture
colin | Joined: June 30, 2006 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Rattr,

Welcome to MortgageFit forum.

As per RESPA, after settlement your loan servicer is required to provide you with [b:8a80740bd8]Annual Escrow Statement[/b:8a80740bd8] once every year.

This statement would summarize the deposits you had made to the account and the payments out of it. This statement will also provide you information on the balance position of the account at the end of the year.

In addition to the Annual Escrow Statement, the loan servicer will have to provide you with a [b:8a80740bd8]Servicing Transfer Statement[/b:8a80740bd8] if he sells your loan to another servicer or transfers the servicing rights of your loan to any other loan servicer.

Colin

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Rattr,

Under the RESPA Act, lenders should provide borrowers with disclosures during the course of getting a mortgage loan. Some disclosures reveal the closing costs while others give an idea about the escrow account practices. Besides, there is another disclosure which describes the business relationship between professionals involved in conducting the loan closing.

Thanks,
James.

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

Samantha's picture
Samantha | Joined: September 16, 2005 11:59 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Rattr,

The very first disclosure is the Good Faith Estimate which provides an estimated value of the costs the borrower is likely to pay in closing. You will be getting the disclosure either when you apply for a loan or within 3 business days of the application.

Another disclosure is the Servicing Disclosure Statement or the Servicing Transfer Statement. This implies that some other lender or servicer will be collecting monthly payments instead of your lender himself.

Under the RESPA, a borrower will also get an Affiliated Business Arrangement Disclosure if the lender, broker or other party in closing refers him to their affiliates for settlement service. This form will ensure that you need not use the services of the affiliate and can very well shop for other lenders.

Hope this information will help you.

God bless you

Samantha

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I would like to know if someone violates Section 8 of RESPA, what penalties are possible for such violation.

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

blue's picture
blue | Joined: October 21, 2005 09:17 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Drantch,

Welcome to Mortgagefit discussion board.

There are [b:afeebf13b5]criminal and civil penalties[/b:afeebf13b5] which can be imposed if someone violates Section 8 provisions of RESPA.

A fine of up to $10,000 and 1 year imprisonment is possible if a criminal case is filed against a person.

In case a private law suit is started then the person who has violated the Section 8 provisions would be liable to pay 3 times the amount paid for the service to the person who was charged such an amount for the settlement service.

For example, Kary was charged $700 for settlement service by Linda. If a private law suit is started by Kary as per Section 8 of RESPA, then Linda may have pay Kary $2100, three times of what she charged from Kary.

Please let me know if you have any other questions.

Thanks
Blue

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Are 2nd mortgages/or equity loans subject to respa

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Holly,

As far as I know, [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url] or home equity loans are subject to RESPA.

Thanks

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jinosbrovens's picture
jinosbrovens | Joined: May 13, 2010 10:29 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Upto my knowlege RESPA does not cover licensing regulations. It does not prohibit referrals per se, but rather referral fees.If there was a large enough reason for corporations not to violate RESPA laws, then they would be much more reluctant to doing so.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can you tell me where I can find written guidelines for RESPA disclosure requirements in 2007?

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Curtis,

Your query has been replied to in the given page:
http://www.mortgagefit.com/inprocess/about48334.html

Take a look at it. Hope it helps you.

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I hope someone read my question and answer me.

Through out the loan process, I've asked my loan broker to provide me a GFE and other RESPA required documents until 1 days before (12/29/11) my final loan doc is ready (12/30/11). Even though I requested him a specific rate & fees, etc, he verbally promised. (3.875%, no impound, with no point with only $700 broker & lender fee). However, when I showed up to the escrow office to sign my loan doc was with impound and also with $2500+ broker fees.

In addition, whatever GFE and other documents that he sent me was falsified the date. Because I met this broker on 11/23/11 and submit my application on 11/28/11. But such documents was dated 11/15/11. It seems that he was trying to make a story as if he followed a RESPA requirement in a timely manner, but he miscalculated the date.

My escrow was already extended by one week, meaning I don't have any other choice.. sign the loan and close the deal or lose a home. I think the reason to extend my escrow (solely due to slow loan process) was his negligence or his intention to push me into the corner and have me just sign whatever the loan document and pricing regardless what he promised the pricing verbally to me.

Honestly, I don't want to break up my current escrow, so.. I will sign the loan doc as is..

But, after I close the escrow, if I submit my complaint to DRE or any regulatory agency, what kind of penalty he is getting?

And also.. I believe falsifying a date seems to be a felony (maybe not).. can I sue him with above case? Because of such extended escrow, I had to stay 2 more weeks at my current APT paying extra rent. In addition, if changing date is not a big deal here, then.. it can be treated as an identity theft..

Can anyone response to my situation?
To sum up, 1, If I file a complaint, what penalties is he getting? 2, Can I sue him for those loan impound issue w/o my permission, not complying RESPA, falsifying documents, etc??

Thank you,

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I hope someone read my question and answer me.

Through out the loan process, I've asked my loan broker to provide me a GFE and other RESPA required documents until 1 days before (12/29/11) my final loan doc is ready (12/30/11). Even though I requested him a specific rate & fees, etc, he verbally promised. (3.875%, no impound, with no point with only $700 broker & lender fee). However, when I showed up to the escrow office to sign my loan doc was with impound and also with $2500+ broker fees.

In addition, whatever GFE and other documents that he sent me was falsified the date. Because I met this broker on 11/23/11 and submit my application on 11/28/11. But such documents was dated 11/15/11. It seems that he was trying to make a story as if he followed a RESPA requirement in a timely manner, but he miscalculated the date.

My escrow was already extended by one week, meaning I don't have any other choice.. sign the loan and close the deal or lose a home. I think the reason to extend my escrow (solely due to slow loan process) was his negligence or his intention to push me into the corner and have me just sign whatever the loan document and pricing regardless what he promised the pricing verbally to me.

Honestly, I don't want to break up my current escrow, so.. I will sign the loan doc as is..

But, after I close the escrow, if I submit my complaint to DRE or any regulatory agency, what kind of penalty he is getting?

And also.. I believe falsifying a date seems to be a felony (maybe not).. can I sue him with above case? Because of such extended escrow, I had to stay 2 more weeks at my current APT paying extra rent. In addition, if changing date is not a big deal here, then.. it can be treated as an identity theft..

Can anyone response to my situation?
To sum up, 1, If I file a complaint, what penalties is he getting? 2, Can I sue him for those loan impound issue w/o my permission, not complying RESPA, falsifying documents, etc??

Thank you,

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:49 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Leo,

The lender may even lose his license if it is found that he hasn't followed the required rules while giving you the loan. You should contact an attorney and take the required steps to sue him for the wrongdoings.

Thanks

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