RESPA, Regulation X, ECOA, and Regulation B Vocabulary Review

Comprehensive vocabulary flashcards covering mortgage settlement procedures, escrow rules, servicing standards, and credit non-discrimination laws under RESPA (Regulation X) and ECOA (Regulation B).

Real Estate Settlement Procedure Act (RESPA)

A federal statute designed to protect consumers from excessive costs and fees, establish disclosures, and regulate mortgage settlement practices.

Regulation X

The implementing regulation for RESPA that limits the funds creditors can require consumers to deposit in escrow and establishes disclosures, policies, and procedures to facilitate timely communication.

Consumer Financial Protection Bureau (CFPB)

The primary regulator of the mortgage industry created by the Dodd-Frank Act, carrying much of the regulatory responsibility for RESPA and ECOA enforcement.

Federally Related Mortgage Loans

Loans covered by RESPA, including residential transactions secured by mortgage with funds insured by FHA, collateral insured by the federal government, funds from federally-regulated lenders, intended sale to Fannie Mae or Freddie Mac, TILA-regulated creditors, or mortgage broker assignments.

RESPA Exempt Loans

Loan categories not covered by RESPA, including Business, Agricultural (Ag), and Commercial loans, temporary financing, loans secured by vacant land, loan assumptions, loan conversions, and closed-loan secondary market sales.

Home Loan Toolkit

A special information booklet required under RESPA, due no later than $3$ days post-application to inform borrowers and legally require true information from clients.

Affiliated Business Arrangement Disclosure

A disclosure required by RESPA where third-party affiliation does not need to be disclosed until the borrower decides to follow through with the lender, with required record retention for $5$ years.

Servicing Transfer Disclosure Timelines

RESPA requirement where a transferring company must notify the borrower no less than $15$ days before transfer, and the receiving company must send a 'hello letter' no more than $15$ days after transfer.

Initial Escrow Account Statement

An escrow disclosure provided at settlement or within $45$ days from settlement by the lender, or within $60$ days of transfer by a new servicer.

Annual Escrow Account Statement

An escrow statement due within $30$ days of completing the escrow account computation year, designed to prevent overages.

Escrow Cushion Limit

The maximum allowable cushion amount in an escrow account, capped at $\frac{1}{4}$th of the annual escrow disbursement.

Escrow Overage Refund Requirement

RESPA rule stating that if an escrow account computation reveals an overage of \50$or more, a refund must be given within$30$$ days.

RESPA Section 8 Prohibitions

Rules prohibiting participants from receiving payments for influence/referrals or pretending to have ownership interest in one another to improperly collect or split unearned fees.

Force-Placed Insurance

Insurance placed on a property by a loan servicer when a borrower lacks coverage or allows it to lapse; RESPA requires servicers to confirm no active policy is in place.

Judicial vs. Non-Judicial Foreclosure

Foreclosure processes whose application depends on state law and whether the mortgage contract contains a power of sale clause.

RESPA Loss Mitigation Contact Timelines

Requirements obligating servicers to contact delinquent borrowers by the $36$\text{th} day of delinquency and send written notice no later than the $45$\text{th} day of delinquency.

RESPA Section 8 Violation Penalties

Penalties for Section 8 violations including fines up to \10,000$and up to$1$$ year in prison.

RESPA Servicing Violation Penalties

Penalties enabling individual consumer actions for damages, civil penalties for failure to issue escrow statements, and additional penalties up to \2,000$$.

Equal Credit Opportunity Act (ECOA)

Chapter 2 federal law created to prevent credit discrimination and promote the availability of credit.

Redlining

An illegal practice under credit laws where creditors refuse to make loans to individuals based on the geographic area where they live.

Regulation B

The federal implementing regulation for the Equal Credit Opportunity Act (ECOA).

Notice of Action Taken

An ECOA disclosure due within $30$ days of receiving a loan application, requiring disclosure of specific reasons if an adverse action is taken by the creditor.

Notice of Incomplete Application

An ECOA notification required within $30$ days of receiving a loan application that lacks required information.

Valuation Disclosures

ECOA disclosures giving notice of the borrower's right to receive a copy of appraisals, due within $3$ business days.