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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®
  

QUIZ: RESPA

 The Real Estate Settlement Procedures Act (RESPA) is a consumer disclosure and anti-kickback statute designed to inform consumers of their settlement costs and to prohibit kickbacks that can increase the cost of obtaining a mortgage. Take this quiz to find out how well you know about this important issue to stay on the right side of the law.

1.Which of the following is NOT a settlement service that is covered by RESPA?
Mortgage loan origination
Furniture moving
Real estate brokerage services
Lender’s credit report


2.Under RESPA, a real estate professional may give in return for the referral of real estate settlement service business:
A thank you
A thing of value
A kickback
A fee


3.To provide consumers with cost information about the mortgage process, RESPA created the good faith estimate (GFE) and the HUD-1 closing document. RESPA requires that the HUD-1 form be provided to the:
Tax assessor
Next-door neighbor
Real estate salesperson
Buyer


4.Substantially revised versions of the GFE and HUD-1 took effect at the beginning of 2010. Among other things, HUD's goal was to reduce surprises to consumers at the closing table by restricting how much some costs could change between the GFE and the HUD-1. What is included among the costs that are allowed to change?
Loan origination fee
Title insurance
Transfer taxes
Credit charges such as points


5.In addition to reducing consumer surprises at the closing table, the revised GFE and HUD-1 are intended to make comparison shopping easier for consumers. To do that, the GFE lets consumers look at a proposed loan under all but one of these different scenarios:
The loan as proposed
The loan with a lower interest rate
The loan with different underwriting terms
The loan with lower settlement charges


6.To combat higher costs in real estate transactions, Section 8 of RESPA makes it a criminal act for settlement service providers to pay fees for the referral of business. One exception to this rule allows a real estate professional to pay a referral fee to:
A mortgage broker who refers a buyer who has been pre-approved
A previous customer who refers a neighbor
Another licensed real estate broker who refers a buyer from another part of the country
A relative who overhears a customer saying he or she is moving


7 .Another exception to the RESPA rules contained in Section 8 allows real estate professionals to receive compensation for:
Filling out a mortgage application
Telling the home inspector the address of the property to be inspected
The reasonable value of goods and services actually provided or performed
Doing the same thing they have been paid to do as a real estate professional


8 .RESPA allows title companies to provide real estate professionals:
$50 for every client referred to the title company by the real estate professional
An entry in a contest to win a car for every $1,000 in premiums paid by the real estate professional’s clients
Tickets to a baseball game once a week for the entire season
Notepads that have been imprinted with the title company’s name and phone number


9 .Two companies that provide settlement services and have some degree of common ownership are considered affiliated businesses under RESPA. When there is a referral from one of these companies to the other, RESPA requires the customer receive an affiliated business disclosure that contains specific information, including:
A statement that use of referred service is not required
Names of other providers of the same service
A statement that the property is pest-free
The commission being paid by the property seller


10.The affiliated business provision, which is an exception to the general RESPA rule regarding compensation for referrals, allows:
The real estate professional making the referral to receive a small referral fee
The party making the referral to receive a return on its ownership interest in the company receiving the referral
The buyer to avoid having to pay real property transfer tax
The seller to require buyers to use the seller’s attorney


11.RESPA is interpreted and enforced by the:
U.S. Department of Justice
Local U.S. Attorney
U.S. Department of Housing and Urban Development
State Association of REALTORS®


12.The penalty for illegally giving or receiving a kickback, which is covered in Section 8 of RESPA, is:
Up to 90 hours of community service
Loss of real estate license
Requirement to attend a RESPA education program
A fine of up to $10,000 or up to one year in prison or both