Escrow & Title
RESPA (Real Estate Settlement Procedures Act) prohibits:
ABuyer representation agreements
BKickbacks and unearned fees in connection with federally related mortgage transactions✓ Correct
CSellers from paying buyer's closing costs
DMultiple offers on the same property
Explanation
RESPA prohibits kickbacks and the payment of unearned fees in connection with federally related mortgage loan transactions. It also requires disclosure of closing costs through the Loan Estimate and Closing Disclosure.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)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.
Math Concepts
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