Under the Real Estate Settlement Procedures Act (RESPA), kickbacks between settlement service providers are:
Why Prohibited Is Correct
Answer B: Prohibited
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
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Related Alabama Questions
- RESPA (Real Estate Settlement Procedures Act) applies to Alabama transactions involving:Finance
- The Real Estate Settlement Procedures Act (RESPA) prohibits:Finance
- A RESPA violation occurs when a settlement service provider receives or gives a 'kickback' or unearned fee. Which statement is CORRECT?Escrow & Title
- Which of the following would most likely result in a lower mortgage interest rate?Finance
- In Alabama, what instrument is primarily used to secure a mortgage loan with real property as collateral?Finance
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.
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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