Which of the following is a requirement of the Real Estate Settlement Procedures Act (RESPA)?

Which of the following is a requirement of the Real Estate Settlement Procedures Act (RESPA)?

• A. Clear disclosure of loan terms
• B. Reporting of borrower credit data
• C. Regulations for servicing disclosures
• D. All of the above

Answer: (C)

The requirement of the Real Estate Settlement Procedures Act (RESPA) to focus on is the regulation of servicing disclosures. RESPA was established to ensure transparency in the real estate settlement process and to protect consumers from abusive practices. Servicing disclosures under RESPA require lenders to provide information about the servicing of the loan, including the possibility of the loan being sold to another lender and the rights of the borrower. This is crucial for borrower awareness regarding who to contact for questions about the loan and how the loan may be serviced after it closes. In contrast, while clear disclosure of loan terms and reporting of borrower credit data are important aspects of the lending process, they are governed by different laws and regulations, including the Truth in Lending Act and the Fair Credit Reporting Act, rather than directly under RESPA. Therefore, focusing specifically on the requirement for servicing disclosures demonstrates an understanding of how RESPA functions within the broader context of residential mortgage lending regulations.

The requirement of the Real Estate Settlement Procedures Act (RESPA) to focus on is the regulation of servicing disclosures. RESPA was established to ensure transparency in the real estate settlement process and to protect consumers from abusive practices.

Servicing disclosures under RESPA require lenders to provide information about the servicing of the loan, including the possibility of the loan being sold to another lender and the rights of the borrower. This is crucial for borrower awareness regarding who to contact for questions about the loan and how the loan may be serviced after it closes.

In contrast, while clear disclosure of loan terms and reporting of borrower credit data are important aspects of the lending process, they are governed by different laws and regulations, including the Truth in Lending Act and the Fair Credit Reporting Act, rather than directly under RESPA. Therefore, focusing specifically on the requirement for servicing disclosures demonstrates an understanding of how RESPA functions within the broader context of residential mortgage lending regulations.