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Source: www.federalreserve.gov
Tags: Mortgage Settlement
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PDF File Real Estate Settlement Procedures Act Consumer Compliance Handbook . a revised HUD-1 Settlement Statement that was required as of January 1, 2010. Technical changes, including streamlined mortgage servicing disclo- …
Real Estate Settlement Procedures Act (RESPA)
Background
The Real Estate Settlement Procedures Act of 1974 (RESPA) (12 USC 2601 et seq.) (the “Act”) became effective on June 20, 1975. 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 protects borrowers against certain abusive practices, such as kickbacks, and places limitations upon the use of escrow accounts. The Department of Housing and Urban Development (HUD) promulgated Regulation X (24 CFR 3500), which implements RESPA. The National Affordable Housing Act of 1990 amended RESPA to require detailed disclosures concerning the transfer, sale, or assignment of mortgage servicing. It also requires disclosures for mortgage escrow accounts at closing and annually thereafter, itemizing the charges to be paid by the borrower and what is paid out of the account by the servicer. In October 1992, Congress amended RESPA to cover subordinate lien loans. HUD, however, decided not to enforce these provisions until Regulation X was amended to cover these loans. On February 10, 1994, Regulation X was amended to extend coverage to
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