SAFE MORTGAGE LOAN ORIGINATOR EXAM QUESTIONS ANSWERED CORRECTLY GRADED
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RESPA - Answers Real Estate Settlement Procedures Act (Regulation X) was intended to reform
the settlement process "to ensure that consumers throughout the Nation are provided with
greater and more timely information on the nature and costs of the settlement process and are
protected from unnecessarily high settlement charges caused by certain abusive practices..."
Four purposes of RESPA - Answers 1. Require effective advance disclosure of costs.
2. Eliminate kickbacks and referral fees.
3. Limit amount held in escrow or reserve accounts.
4. Reform record keeping of land title information.
What does RESPA apply to? - Answers Any transaction involving a federally regulated mortgage
loan.
What is a federally regulated mortgage loan? - Answers Any loan secured by a first lien on
residential property designed for the occupancy of 1-4 families made by any lender which meets
any of the following criteria:
•has deposits insured by the federal govt.
•regulated by the Federal Government
•insured by HUD
•intends to sell the loan to Fannie Mae, Freddie Mac, or Ginnie Mae
•makes more than $1,000,000 in loans per year.
RESPA affects any settlement service which includes the following: - Answers •Title Searches
•Title Examinations
•Title insurance
•Attorney services
•Preparation of documents
•Surveys
•Credit Reports
•Appraisals
, •Pest inspections
•Real estate services
•Loan origination
•Processing mortgages
•Closing or settling mortgages
When must it be disclosed to the borrower if a loan can or cannot be transferred? - Answers At
the time of application or within three days of application.
When must notice be given to the borrower if servicing IS transferred? - Answers No less than
15 days before the effective date of the transfer.
How long does the borrower have to make payments to either lender without any negative
implications including credit reporting and late charges? - Answers During the 60 days following
the effective date.
What must the initial servicing disclosure include? - Answers Whether or not the lender intends
to transfer the servicing of the loan and the lenders history of transferring servicing.
What must the notice of serving transfer include? - Answers Contact info for both the new
lender and the old lender. As well as the following:
-effective date of the transfer
-phone # for both the transferring servicer and the new servicer.
-name or dept. of both companies for contact to answer questions
-date on which old servicer will cease accepting payments
-any info regarding mortgage life or disability insurance
-a statement advising the borrower that the terms of their loan will not change.
What is the purpose of the aggregate escrow analysis? - Answers To reduce the amount being
held in escrow or reserve accounts (accounts for taxes and ins.)
How much may servicers hold as a cushion for escrow? - Answers Two months of taxes,
insurance and mortgage insurance as applicable.
How much may servicers collect in each payment? - Answers One months worth of escrowed
items unless there is a shortage in the account.
How often must accounts be analyzed? - Answers Once every 12 months.
A+
RESPA - Answers Real Estate Settlement Procedures Act (Regulation X) was intended to reform
the settlement process "to ensure that consumers throughout the Nation are provided with
greater and more timely information on the nature and costs of the settlement process and are
protected from unnecessarily high settlement charges caused by certain abusive practices..."
Four purposes of RESPA - Answers 1. Require effective advance disclosure of costs.
2. Eliminate kickbacks and referral fees.
3. Limit amount held in escrow or reserve accounts.
4. Reform record keeping of land title information.
What does RESPA apply to? - Answers Any transaction involving a federally regulated mortgage
loan.
What is a federally regulated mortgage loan? - Answers Any loan secured by a first lien on
residential property designed for the occupancy of 1-4 families made by any lender which meets
any of the following criteria:
•has deposits insured by the federal govt.
•regulated by the Federal Government
•insured by HUD
•intends to sell the loan to Fannie Mae, Freddie Mac, or Ginnie Mae
•makes more than $1,000,000 in loans per year.
RESPA affects any settlement service which includes the following: - Answers •Title Searches
•Title Examinations
•Title insurance
•Attorney services
•Preparation of documents
•Surveys
•Credit Reports
•Appraisals
, •Pest inspections
•Real estate services
•Loan origination
•Processing mortgages
•Closing or settling mortgages
When must it be disclosed to the borrower if a loan can or cannot be transferred? - Answers At
the time of application or within three days of application.
When must notice be given to the borrower if servicing IS transferred? - Answers No less than
15 days before the effective date of the transfer.
How long does the borrower have to make payments to either lender without any negative
implications including credit reporting and late charges? - Answers During the 60 days following
the effective date.
What must the initial servicing disclosure include? - Answers Whether or not the lender intends
to transfer the servicing of the loan and the lenders history of transferring servicing.
What must the notice of serving transfer include? - Answers Contact info for both the new
lender and the old lender. As well as the following:
-effective date of the transfer
-phone # for both the transferring servicer and the new servicer.
-name or dept. of both companies for contact to answer questions
-date on which old servicer will cease accepting payments
-any info regarding mortgage life or disability insurance
-a statement advising the borrower that the terms of their loan will not change.
What is the purpose of the aggregate escrow analysis? - Answers To reduce the amount being
held in escrow or reserve accounts (accounts for taxes and ins.)
How much may servicers hold as a cushion for escrow? - Answers Two months of taxes,
insurance and mortgage insurance as applicable.
How much may servicers collect in each payment? - Answers One months worth of escrowed
items unless there is a shortage in the account.
How often must accounts be analyzed? - Answers Once every 12 months.
