Real Estate Settlement Procedures Act (RESPA)
Frequently Asked Questions (FAQS)
I made an application for a loan, but I did not get a Settlement Costs Booklet or a Good Faith Estimate. What should I do?
You should contact the lender or mortgage broker and ask for them. The lender or mortgage broker is required by RESPA to send these documents out within three days of receiving the application. The lender is only required to give you a booklet if you are purchasing a home. If the lender denies your application within three days, it is not required to give you these documents.
Should I expect the Good Faith Estimate to list the exact charges that I will pay at settlement?
No. The Good Faith Estimate is only an estimate or range of charges. For example, the lender may not know the costs for a settlement agent that you choose, or the exact amount that will be collected for an escrow account for taxes and insurance.
What rights do I have if the charges I must pay at settlement are higher than those listed on the Good Faith Estimate?
RESPA does not give a consumer the right to sue in this circumstance. The best protection is to let the lender and settlement agent know that you will want to see the HUD-1 Settlement Statement one day in advance. You should question any amount that you do not understand.
A builder is offering to pay my closing costs or give me an upgrade package only if I agree to use his mortgage company. Is this legal under RESPA?
Yes. While a builder cannot require you to use a mortgage company with whom he is affiliated, a builder is allowed to offer you a discount if you use a specific company. Under RESPA, the builder cannot charge you more for the home if you do not use his affiliated mortgage company.
I applied for a loan at 7.5 percent, but when I got to settlement the lender charged me 8 percent. Is this a RESPA violation?
No. However, the Truth-in Lending Act (TILA) requires that you get a disclosure concerning the interest rate. TILA is administered by the Board of Governors of the Federal Reserve System. To make a complaint, see File
a Complaint: The Federal Reserve Board.
I asked my lender for a copy of the real estate appraisal but the lender has not sent it. Is this covered under RESPA?
No. Under the Equal Credit Opportunity Act (ECOA) the mortgage broker or lender must tell you how and when you can ask for a copy of your appraisal. ECOA is administered by the Board of Governors of the Federal Reserve System. To make a complaint, see File
a Complaint: The Federal Reserve Board.
My lender says the home I am buying is located in a flood zone and I must purchase flood insurance. What can I do if I do not believe this information is correct?
The National Flood Insurance Reform Act of 1994 provides for lenders to purchase flood insurance on behalf of borrowers/owners of properties in a special flood hazard area. It is administered by the Federal Emergency Management Agency (FEMA). If you disagree with the lender about whether the property is located in a special flood hazard area, you may make a request to the FEMA Map Assistance Center to determine whether the property is located in such an area.
My loan was transferred to a new lender. I made my loan payment on time, but to the old lender. Can I be charged a late fee?
No. For 60 days, neither lender may charge a late fee as long as you make your payment on time to the previous lender or to the new lender. Your lender must send you a notification 15 days before your payment is due to the new lender. Both lenders must provide you with certain information about the loan transfer, including: when the payment is due to the new lender, the new lender's address, toll-free telephone numbers, etc.
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