2. RESPA background
• 1974
• Implemented by Regulation X
• Consumer Protection Statute
• Requires timely disclosures of the nature and costs of the
real estate settlement process
• Prohibits abusive practices
• Mandates disclosures for escrow accounts at closing and
annually
• Requires disclosures regarding transfer, sale or
assignment of mortgage servicing rights
• Applies to all federally related mortgage loans
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3. RESPA background cont…
• RESPA Disclosures
• At time of Application (or within 3 business days)
• Special Information Booklet – Buying your home
settlement costs and other helpful information
• Good Faith Estimate (GFE) of Amount/Range of Costs
• Particular Providers Required by Lender
• Controlled Business Arrangement
• Mortgage Servicing Transfer Disclosure
• Before Settlement
• Uniform Settlement Statement
• After Settlement
• Escrow accounts, shortages, surpluses, initial statement,
annual statement
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4. RESPA….Prohibition of
Kickbacks and unearned fees…
• Section 8 prohibits any person, pursuant to any
agreement or understanding, giving or receiving a fee
or a thing of value for the referral of settlement
business.
• Payments in excess of reasonable value are considered a
kickback
• No referral fees
• No split of charges except for actual services performed
• Thing of Value – broadly defined as anything of value
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5. RESPA….Penalties
• All Penalties covered under Section 8 of RESPA
• Subject to criminal and civil penalties
• Fines up to $10,000.00 and imprisoned up to one year or
both for each violation
• In a private lawsuit, a person may be liable to the
person charged for the settlement service amount equal
to three times the amount of the charge paid for the
service
• Individuals have one year to bring a private lawsuit to
enforce violations of section 8
• May be brought in any federal court in which the
violation is alleged
• State Attorney General may bring injunctive action
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6. RESPA
Filing a RESPA Complaint
Director, Office of RESPA and Interstate Land Sales
US Department of Housing and Urban Development
Room 9145
451 7th Street SW
Washington, DC 20410
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