A RESPA violation occurs when a settlement service provider receives or gives a 'kickback' or unearned fee. Which statement is CORRECT?
Why RESPA prohibits giving or receiving any fee, kickback, or thing of value for the referral of settlement service business Is Correct
Answer B: RESPA prohibits giving or receiving any fee, kickback, or thing of value for the referral of settlement service business
Exam Tip: Escrow & Title
Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.
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Related Alabama Questions
- Under the Real Estate Settlement Procedures Act (RESPA), kickbacks between settlement service providers are:Finance
- RESPA (Real Estate Settlement Procedures Act) applies to Alabama transactions involving:Finance
- The Real Estate Settlement Procedures Act (RESPA) prohibits:Finance
- An appraisal conducted for a federally related loan transaction must be performed by a:Property Valuation
- In Alabama, an appraisal for a federally related transaction (such as an FHA or conventional bank loan) must be performed by:Property Valuation
- RESPA requires that buyers receive a copy of the 'Your Home Loan Toolkit' brochure within how many business days of loan application?Escrow & Title
- Which of the following items is typically a CREDIT to the buyer on the closing disclosure?Escrow & Title
- The Closing Disclosure (CD) must be provided to the buyer at least how many business days before closing?Escrow & Title
Key Terms to Know
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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