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Unformatted text preview: l estate agent or firm, so that for every closing or applicant the agent or firm sends, the agent or firm will receive something of value. Escrows – RESPA prohibits the lender from collecting excessive amounts to be placed in escrow accounts. The act allows the lender to collect sufficient amounts to make necessary payments plus 2 months of escrow deposits. Thus, at the time of closing, the mortgage lender usually requires the collection of 2 months of escrow payments for taxes, insurance (homeowners), PMI premiums, and any other fee or assessment that will affect the title to the property. The lender will collect the first year's premium for both homeowners' insurance and PM if required, for a total of 14 months for each. Preparation of the Uniform Settlement Statement and Truth–in– Lending statement – The lender is prohibited from charging a fee for the preparation of these two statements. It should be noted that only the lender is prohibited from charging a fee for the preparation of the statements. 4. 5. 6. 7. Dynasty School (www.dynastySchool.com) 11-21 REAL ESTATE FINANCE
8. Loans to fiduciaries – Institutions insured by FDIC must require that the borrower disclose the identity of the person or company receiving the beneficial interest in a loan made to a fiduciary. Fiduciary is the holding by a person or organization of something in trust. Thus, if you are purchasing a piece of property from a person or organization that is holding the property in trust, the institution will require the person or organization holding the property, to identify the person or persons who will ultimately benefit from the proceeds of the mortgage. Preview of settlement statement – The final provision of RESPA allows the borrower or his or her agent to view the Uniform Settlement Statement one business day prior to the closing and see the amount the borrower may be required to pay at the time of closing. This reviewing of the Uniform Settlement Statement is a good idea not only for the borrower, but also for the real e...
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