- A mortgage broker's kickback to a Realtor and why a broker would do it.
- A mortgage broker's kickback to an appraiser and why a broker would do it.
2.) In 1974, Congress enacted RESPA to protect home buying consumers. Explain how RESPA affected loan disclosures and lender/broker kickbacks.
3.) Name two documents required under RESPA and explain how each protects consumers from predatory lending.
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Q1
ReplyDeleteSection 8 regulates kickbacks -
If the broker has a mutual business umbrella with either of the two scenarios, the providers could each benefit from the referral. Because the Act protects borrowers from referral fees, the selection of that provider would still give them a benefit financially.
Q2
RESPA protects borrowers by providing information about all costs associated with a loan transaction. There was a lot of abusive practices when it came to home loans, and it prevents kickbacks and referral fees that raise costs during settlement.
Q3
Uniform Settlement Statement - itemizes all charges to the borrower and seller in connection with the settlement
Initial Servicing Transfer Disclosure - lets the borrower know whether the lender intends to transfer the loan to another lender.
1.)
ReplyDeleteSection 8
I believe in either situation they would have to be an ABA.
2.)
RESPA requires disclosures to the applicant before, upon, and after acceptance of an application regarding the terms and costs associated with the loan. RESPA prohibits kickbacks excluding ABAs.
3.)
Service Disclosure Statement. This statement lets the borrower know if they will service the loan or transfer it to another lender.
Good Faith Estimate. The GFE lets borrowers shop for a loan by comparing the settlement costs and terms.
1 or 3:
ReplyDeleteSection 8 regulates kickbacks. The mortgage broker's offer of a kickback to either a realtor or appraiser would be done in an attempt to gain more business for the mortgage broker. RESPA regulates this through Section 8 which prohibits kickbacks and requires ABAs for legitimate business relationships.
2 or 3:
RESPA requires disclosures to applicants in order to educate borrowers of accurate costs associated with the purchase as well as eliminating kickbacks
3 of 3:
Good faith estimate which provides borrowers with the costs involved, allowing them to compare rates and shop for the best rates.
1 of 3
ReplyDeleteSection 8
A kickback would occur only if both Broker and Agent are under same umbrella and would require an ABA Disclosure.
A kickback from Broker to Appraiser which would be prohibited could be given to adjust the property value or speed the appraisal timing up.
2 of 3
Because of abusive practices it requires the MLO to disclose all fees and charges included in a loan. Preventing kickbacks and requiring ABA disclosures.
3 of 3
Servicing Disclosure Statement
States if the lender intends to service the loan.
Transfers
States if the lender intends to transfer loan.
1. Section 8
ReplyDelete2. ABA disclosures were implemented and kickbacks prevented
3. Loan Estimate - list fees for loan
ABA disclosures - list companies that mortgage company is affiliated with and fees
1 of 3
ReplyDeleteKickbacks are under Section 8 of RESPA & I feel like there needs to be an ABA in these situations
2 of 2
ReplyDeleteRESPA protected borrowers in that they require MLO/Lenders to be transparent in all fees, costs and charges with the loan transaction as well as implemented the ABAs and eliminating kickbacks
3 of 3
ReplyDeleteGood Faith Estimate (GSE) is used to show borrower the terms & costs the best they can to give a clear picture
Loan Estimate is a list of the fees and payment amount of loan
1 of 1:
ReplyDeleteSection 8
1 B:
If they are under the same umbrella company they would need an ABA. Also to continue to get the Realtors costumers for the future.
1 C:
Kickbacks to appraiser is not tolerated, looking to push the appraiser for a price on a home to close a deal or make more money.
2 of 2:
ReplyDeletePuts restraints on lenders and MLO's from padding their pockets with high cost's and to disclosure what is expected from the mortgage industry when it comes to fee's and charges that educate the consumer.
3 of 3:
ReplyDeleteLoan Estimate: Itemize all cost to consumer.
Closing Disclosure: Who will service the loan.
1 of 3
ReplyDeleteSec 8 Regulates.... Ex 1 mtg broker takes the realtor out to baseball games few times a year in exchange for referrals
Ex 2 MTG broker takes appraiser out to dinner every month to ensure the appraisal comes in by the MTG brokers request
2 of 3
All relevant disclosures to RESPA need to be transparent about all costs associated in detail and restricts kickbacks and fees for anything of value on all federally related mortgages
3 of 3
LE - shows estimated costs to close itemized for borrower to be aware of
CD - shows actual costs to close with exact charges for borrower to see if any extra charges were done