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Who is the Settlement Agent?
The settlement agent is the person responsible for conducting the real estate closing and the
disbursement of the settlement proceeds.
What is the Real Estate Settlement Procedures Act (RESPA)?
The Real Estate Settlement Procedures Act (RESPA) is a federal statute enacted by the Department of Housing and Urban Development (HUD) to regulate and monitor real estate settlement procedures. The statute was passed in 1974, to help all parties involved in the real estate transaction to be fully aware of closing costs, lender servicing, lender escrow account practices, and any business relationship between settlement providers and the parties involved in the transaction. The statute covers one to four family residences which includes mortgages, assumptions, home improvement, and home equity lines/loans.
The purpose of RESPA is to assist consumers when making important financial decisions.
RESPA requires Lenders, Brokers, and Settlement Agents to provide certain documentation to the borrower prior to or at closing. They include:
~Disclosure of any premiums paid by the lender to any third party
~Good Faith Estimate of closing costs
~Mortgage servicing disclosures on the lender’s intention of servicing or transferring a mortgage loan
~Disclosure of settlement service providers
~Disclosure of any affiliated business relationships between the parties involved in the transaction
~Initial escrow disclosure on the handling of the consumer’s funds in an escrow account for the purpose of paying real estate taxes insurance premiums, and other charges
SETTLEMENT TERMS