Under which section of RESPA are escrow collection and other requirements covered?

Under which section of RESPA are escrow collection and other requirements covered?

• A. Section 6
• B. Section 8
• C. Section 10
• D. Section 5

Answer: (C)

The correct choice addresses Section 10 of the Real Estate Settlement Procedures Act (RESPA), which specifically regulates the requirements related to escrow accounts. This section outlines how lenders can collect and manage escrow payments that are set aside for property taxes and insurance, ensuring that lenders do not collect excessive amounts. It establishes limits on the amount that can be required to be maintained in escrow accounts and mandates that lenders provide borrowers with an annual statement detailing the escrow account activity. In contrast, Section 6 of RESPA mainly deals with servicing and the requirements for how servicers must manage and communicate about loans, while Section 8 addresses the prohibition against kickbacks and referral fees in real estate transactions. Section 5 does not cover escrow accounts specifically but often relates to mortgage insurance disclosures. Thus, Section 10 is the only section that directly pertains to the rules surrounding escrow collections and requirements.

The correct choice addresses Section 10 of the Real Estate Settlement Procedures Act (RESPA), which specifically regulates the requirements related to escrow accounts. This section outlines how lenders can collect and manage escrow payments that are set aside for property taxes and insurance, ensuring that lenders do not collect excessive amounts. It establishes limits on the amount that can be required to be maintained in escrow accounts and mandates that lenders provide borrowers with an annual statement detailing the escrow account activity.

In contrast, Section 6 of RESPA mainly deals with servicing and the requirements for how servicers must manage and communicate about loans, while Section 8 addresses the prohibition against kickbacks and referral fees in real estate transactions. Section 5 does not cover escrow accounts specifically but often relates to mortgage insurance disclosures. Thus, Section 10 is the only section that directly pertains to the rules surrounding escrow collections and requirements.