What is Your Basic Rights as Homeowner
The Real Estate Settlement Procedures Act (RESPA) is often referred to as one on the most important laws helping homeowners. It was enacted in 1974 and became effective June 20, 1975. This law was enacted primarily to protect consumers during the home buying process and after. The Department of Housing and Urban Development(HUD) is responsible for watching and enforcing RESPA.
A few of the key things that RESPA requires lenders to provide are:
A Special Information Booklet
This Booklet will help a borrower to provide finance information for the borrower to finance the purchase of their real estate and to help explain real estate settlement services.
The Good Faith Estimate Of Cost
It requires a home buyer to get a “Good Faith Estimate,” this will explain the amount of charges for the settlement of the purchase. Remember that this is an estimate of charges that will be incurred when purchasing a piece of real estate.
The HUD1 Statement
This statement has to be with all real estate settlement and must clearly itemize the actual cost of all loan fees and transactions. It will itemize all services provided to the home buyer and fees charged. A home buyer may request the HUD1 statement 24hrs in advance of the closing of the sale. In fact this is a great idea for anyone that is fixing to make such a large purchase. That way all charges can be reviewed in advance, and challenged if necessary.
A mortgage Servicing Disclosure Statement
This requires a lender or mortgage broker to give a borrower in writing, whether the lender intends to provide servicing for the loan or if they will transfer it to a loan servicer. If they will transfer it to a servicer, there will be details on how a borrower can take care of complaints with that issue.
During the 1st 60 days after the transfer of any servicing, payment can not be considered late if the consumer made payment to their prior servicer before the late fee date.
When transferring any servicing, a borrower must be notified in writing no less than 15 days before the transfer date; this is often called the “Goodbye Letter.”
The new servicer getting the transfer has to notify the consumer in writing the transfer of serving within 15 days after the transfer date of the loan; this is often called the “Hello Letter.”
A servicer shall not report a borrower for paying late during the 1st 60 days after the loan transfer date; there is often a period of no reporting for 60 days to the credit bureaus. Or if the consumer made timely payments during that time, they can have that reported to the credit bureaus.
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