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RESPA, HUD, What is it?

By
Real Estate Broker/Owner

  

One of the things you are entitled to as you go through the process of applying for a mortgage is what is called a "Settlement Statement" or "HUD". This is a form that is completed by your settlement agent and outlines who is getting what at the closing. You are entitled to review this statement prior to actually closing. This is regulated by the Department of Housing and Urban Development.
Prohibited Fees. It is illegal under RESPA for anyone to pay or receive a fee, kickback or anything of value because they agree to refer settlement service business to a particular person or organization. For example, your mortgage lender may not pay your real estate broker $250 for referring you to the lender. It is also illegal for anyone to accept a fee or part of a fee for services if that person has not actually performed settlement services for the fee. For example, a lender may not add to a third party's fee, such as an appraisal fee, and keep the difference.

Permitted Payments. RESPA does not prevent title companies, mortgage brokers, appraisers, attorneys, settlement/closing agents and others, who actually perform a service in connection with the mortgage loan or the settlement, from being paid for the reasonable value of their work. If a participant in your settlement appears to be taking a fee without having done any work, you should advise that person or company of the RESPA referral fee prohibitions. You may also speak with your attorney or complain to a regulator listed in the Appendix to this Booklet.

Penalties. It is a crime for someone to pay or receive an illegal referral fee. The penalty can be a fine, imprisonment or both. You may be entitled to recover three times the amount of the charge for any settlement service by bringing a private lawsuit. If you are successful, the court may also award you court costs and your attorney's fees.

RESPA and Illegal Kickbacks

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New Orleans Property Lady, LLC

Broker/Owner and REALTOR (r) 

New Orleans, LA 70125

504-908-2268 (C)            

 Licensed in the State of Louisiana, USA

New Orleans Property Lady 
           

  

New Orleans Property Lady

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Copyright 2012, Miriam Bernstein, All Rights Reserved

Comments (1)

Eliud Gautier
Acre Mortgage & Financial, LLC - Deptford, NJ
Branch Manager

Breaking NEWS about RESPA
February 29, 2008

Mar 04, 2008 06:07 AM