Question 1

What does RESPA stand for, and what is its primary purpose?

Accepted Answer

Real Estate Settlement Procedures Act. Its primary purpose is to require disclosures about settlement costs and prohibit kickbacks and referral fees in federally related mortgage transactions.

Question 2

Under RESPA, what is the maximum penalty for a violation of the anti-kickback provision (Section 8)?

Accepted Answer

Up to $10,000 in fines, up to one year in prison, or both, per violation.

Question 3

What is a 'controlled business arrangement' (AfBA) under RESPA, and what must be disclosed?

Accepted Answer

An affiliated business arrangement (AfBA) exists when a settlement service provider refers business to an affiliate. The referrer must disclose the arrangement in writing at or before the time of referral.

Question 4

Under RESPA, within how many business days must a lender provide a Loan Estimate after receiving a loan application?

Accepted Answer

The lender must provide the Loan Estimate within three business days of receiving a completed loan application.

Question 5

What is the maximum amount a lender can require a borrower to maintain in an escrow account as a cushion under RESPA?

Accepted Answer

RESPA limits the escrow cushion to a maximum of two months' worth of escrow payments.

Federal Mortgage Laws – NMLS SAFE Exam Flashcards

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