RESPA does not apply to extensions of credit to the government, government agencies, or instrumentalities, or in situations where the borrower plans to use property or land primarily for business, commercial, or agricultural purposes.
"A sale that is all cash is not subject to RESPA." “RESPA specifically provides that it does not affect the validity or enforceability of any sale or contract for the sale of real property, or any agreement arising in connection with a federally-related mortgage loan.”
RESPA, the Real Estate Settlement Procedures Act, prohibits kickbacks. Kickbacks involve giving or receiving something of value in exchange for referrals of settlement services. 2. Reasonable fees paid for services actually performed are not prohibited by RESPA.
Construction loans are not covered by The Real Estate Settlement Procedures Act.
Final answer: The statement that is not a requirement of RESPA is that loan advertisements must include the annual percentage rate, which is actually a requirement of TILA, not RESPA.
NAR's Legal Affairs staff explains the Real Estate Settlement Procedures Act (RESPA) and how it affects REALTORS®. RESPA generally prohibits kickbacks and offering a thing of value in exchange for the referral of business to a settlement service provider.
Transactions not covered by RESPA include cash transactions, commercial and business loans, vacant land, and construction-only loans.
Summary. The Real Estate Settlement Procedures Act (RESPA) is applicable to all “federally related mortgage loans,” except as provided under 12 CFR 1024.5(b) and 1024.5(d), discussed below.
RESPA violations include bribes between real estate representatives, inflating costs, the use of shell entities and referrals in exchange for settlement services.
RESPA also governs the form of closing documents that can be used. The purpose of the law is to protect homebuyers from being deceived and buying a house that is dangerous or uninhabitable. RESPA does not apply to commercial real estate transactions.
Since its enactment, RESPA has been amended several times to cover, among other things, subor dinate loans; required disclosures for the transfer, sale, or assignment of mortgage servicing; rules for mortgage escrow accounts, including the account ing method to be used for these accounts; required disclosures; and the ...
The TILA-RESPA rule applies to most closed-end consumer credit transactions secured by real property, but does not apply to: HELOCs; • Reverse mortgages; or • Chattel-dwelling loans, such as loans secured by a mobile home or by a dwelling that is not attached to real property (i.e., land).
RESPA specifies “No person shall give and no person shall accept any fee, kickback or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person.”
The following transactions are not covered by RESPA: An all-cash sale; • A sale where the individual home seller takes back the mortgage; and • Business, Commercial, or Agricultural purpose loans. RESPA requires disclosures to be given to applicants for a federally related mortgage loan.
RESPA, however, does not apply to credit transactions involving extensions of credit primarily for business, commercial, or agricultural purposes or extensions of credit to government or governmental agencies. 12 USC § 2606(a).
Services that are provided after closing typically are not covered by RESPA and are not considered settlement services. RESPA prohibits any person from giving or receiving a fee, kickback, or "a thing of value" for referring business to a mortgage broker or banker, or a title company.
RESPA regulations apply to any residential mortgage loan made to finance the purchase of a one- to four-family home or to refinance an existing mortgage.
Final answer: Among the loan types listed, the one that is exempt from RESPA requirements is loans on vacant land. RESPA primarily applies to transactions involving residential properties. Other loans, such as those insured by the federal government, usually fall under RESPA regulations.
The Act requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. The Act also prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts.
Final answer: Out of steering, paying of kickbacks, blockbusting, and redlining, the Real Estate Settlement Procedures Act (RESPA) directly prohibits the paying of kickbacks. Other acts are prohibited under Fair Housing Act and the Community Reinvestment Act.
RESPA also prohibits a lender from charging excessive amounts for the escrow account. The lender may require a borrower to pay into the escrow account no more than 1/12 of the total of all disbursements payable during the year, plus an amount necessary to pay for any shortage in the account.
Explanation: Business purpose loans are exempt from RESPA coverage.