Respa Pre-course Knowledge Check

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BJULIANNAM
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Respa Pre-course Knowledge Check - Quiz

Questions and Answers
  • 1. 

    RESPA stands for Real Estate Settlement Procedures Act.

    • A. 

      True

    • B. 

      False

    Correct Answer
    A. True
    Explanation
    RESPA stands for Real Estate Settlement Procedures Act. This federal law was enacted to protect consumers from unethical practices in real estate transactions, particularly during the mortgage settlement process. It requires lenders to provide borrowers with certain disclosures regarding loan terms and costs, and prohibits certain practices such as kickbacks and referral fees. The purpose of RESPA is to promote transparency and fairness in the real estate settlement process, ensuring that consumers are fully informed and protected when purchasing or refinancing a home.

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  • 2. 

    Regulations covered in RESPA include all of the following EXCEPT:

    • A. 

      Required disclosures to consumers

    • B. 

      NMLS Registration

    • C. 

      Kickbacks and unearned fees

    • D. 

      Escrow account maintenance

    Correct Answer
    B. NMLS Registration
    Explanation
    The correct answer is NMLS Registration. This is because NMLS Registration is not covered under the Real Estate Settlement Procedures Act (RESPA). RESPA primarily focuses on regulations related to disclosures to consumers, kickbacks and unearned fees, and escrow account maintenance. NMLS Registration, on the other hand, is a separate requirement for mortgage loan originators and is governed by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act).

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  • 3. 

    Which of the following is a key piece of data required to trigger the creation of an application?

    • A. 

      Subject property address

    • B. 

      Type of loan

    • C. 

      Occupancy status

    • D. 

      Borrower date of birth

    Correct Answer
    A. Subject property address
    Explanation
    The subject property address is a key piece of data required to trigger the creation of an application because it is necessary to identify the specific property for which the loan application is being made. The address is used to determine the location of the property, which can affect various aspects of the loan process such as eligibility, appraisal, and underwriting. Without the subject property address, it would not be possible to accurately assess and process the loan application.

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  • 4. 

    How many days does NAM have to send out disclosures once an application is created?

    • A. 

      5

    • B. 

      3

    • C. 

      30

    • D. 

      No limit as long as we disclose by closing

    Correct Answer
    B. 3
    Explanation
    Once an application is created, NAM has a time frame of 3 days to send out disclosures. This means that within 3 days of creating the application, NAM must provide all necessary disclosures to the relevant parties.

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  • 5. 

    Which of the following disclosures is not required by RESPA?

    • A. 

      Affiliated Business Arrangement

    • B. 

      Service Providers List

    • C. 

      Servicing Disclosure

    • D. 

      Fair Lending Disclosure

    Correct Answer
    D. Fair Lending Disclosure
    Explanation
    The Fair Lending Disclosure is not required by RESPA. RESPA, the Real Estate Settlement Procedures Act, is a federal law that governs the disclosure of information in real estate transactions. It requires certain disclosures to be made to borrowers, such as the Affiliated Business Arrangement disclosure, which informs borrowers of any business relationships between the lender and other service providers. The Service Providers List is also required to be provided to borrowers, which lists all the service providers that the borrower can shop for. The Servicing Disclosure is another required disclosure that informs borrowers about the transfer of their loan servicing. However, the Fair Lending Disclosure is not a requirement under RESPA.

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