Loan Officer Federal Laws: RESPA Questions and Answers

Question 1

According to Section 8 of RESPA, which of the following is strictly prohibited?

Accepted Answer

A real estate agent requiring a buyer to use a specific title company in which the agent has an undisclosed ownership interest.

Answer

A mortgage lender providing a borrower with a list of approved appraisers.

Answer

A title company charging a fee for conducting a title search.

Answer

A loan officer paying a marketing firm to create advertising materials.

Question 2

A loan officer at a mortgage company has a close friend who is a real estate agent. The agent regularly sends clients to the loan officer. To show appreciation, the loan officer gives the agent a $100 gift card for every funded loan that the agent refers. This arrangement is a violation of which federal law?

Accepted Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Truth in Lending Act (TILA)

Answer

Equal Credit Opportunity Act (ECOA)

Answer

Fair Housing Act (FHA)

Question 3

Under RESPA, a lender is establishing a new escrow account for a borrower. The lender may collect a cushion at closing that is limited to what amount?

Accepted Answer

One-sixth of the estimated total annual disbursements.

Answer

One month of the estimated total annual disbursements.

Answer

One-twelfth of the estimated total annual disbursements.

Answer

One-quarter of the estimated total annual disbursements.

Question 4

Which of the following is NOT a primary purpose of the Real Estate Settlement Procedures Act (RESPA)?

Accepted Answer

To regulate the interest rates charged on mortgage loans.

Answer

To prohibit kickbacks and unearned referral fees.

Answer

To provide consumers with disclosures regarding settlement costs.

Answer

To place limitations on the use of escrow accounts.

Question 5

An Affiliated Business Arrangement (AfBA) disclosure must be provided to the consumer under RESPA:

Accepted Answer

At or before the time the referral is made.

Answer

Within three business days after closing.

Answer

At least seven business days before closing.

Answer

Only if the consumer questions the relationship.

Question 6

Which of the following transactions is generally exempt from RESPA requirements?

Accepted Answer

A loan to purchase a 25-acre tract of vacant land where no loan proceeds will be used to construct a residence.

Answer

A loan to purchase a four-unit residential property.

Answer

A home equity line of credit (HELOC).

Answer

A refinance of an existing mortgage on a primary residence.