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Unformatted text preview: tement (HUD–1 Statement). Timing – The Uniform Settlement Statement must be delivered or mailed to the borrower and the seller at or before settlement. Upon request of the borrower, the person conducting the settlement must permit the borrower to inspect the Uniform Settlement Statement one day prior to settlement. Exceptions – The statement may be provided by mail as soon as possible after the settlement if: • • • The escrow holder does not require a meeting of the parties, The borrower or borrower's agent does not attend the settlement in person, or The borrower waives in writing the right to delivery of the completed statement. The Real Estate Settlement Procedures Act (RESPA) is a federal law designed to give buyers and sellers advance notice of closing costs, to allow them to “comparison shop” and obtain the lowest available costs. RESPA has nine basic requirements: 11-20 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS
The first two provisions require the lender to provide the applicant with the good faith estimate of costs and the HUD booklet on settlement costs. The remainder of the provisions cover the actual closing of the transaction: 3. Uniform Settlement Statement – RESPA requires the use of the Uniform Settlement Statement, otherwise known as either HUD Form 1 or the closing statement. This statement will be reviewed later in this section. Selection of the title company – RESPA makes it illegal for the seller to condition the sale of the property that will be purchased with the assistance of a federally related mortgage ban, upon the buyer's selection of the title company. This means that the seller cannot force the buyer to use a specific title company. Kickbacks – RESPA prohibits anyone involved in the transaction from receiving or giving a fee, kickback, or anything of value for the promise of future business. It also makes the acceptance or offer of a fee illegal when no service has been rendered. It should be noted that this requirement does not prohibit a per–son who actually provides a service in the transaction from collecting a fee or payment for services. It does prohibit, for example, a title or mortgage company from making an agreement with a rea...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10