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HOME BUYERS INFORMATION:
Congratulations!
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You have decided to buy a new home. This
will help you take this big financial step
by describing the home buying, home
financing, and settlement process. Lenders
and mortgage brokers are required by federal
law, the Real Estate Settlement
Procedures Act (“RESPA”), to give
you this information. You should receive it
when applying for a loan, or within three
business days afterwards. Real estate
brokers frequently hand out a booklet as
well. You probably started the home buying
process in one of two ways: you saw a home
you were interested in buying or you
consulted a lender to figure out how much
money you could borrow before you found a
home (sometimes called pre-qualifying). The
next step is to sign an agreement of sale
with the seller, followed by applying for a
loan to purchase your new home. The final
step is called “settlement” or “closing,”
where the legal title to the property is
transferred to you. At each of these steps
you often have the opportunity to negotiate
the terms, conditions and costs to your
advantage. This will highlight such
opportunities. You will also need to shop
carefully to get the best value for your
money. There is no standard home buying
process used in all localities. Your actual
experience may vary from those described
here. This takes you through the general
steps to buying a home, to eliminate, as
much as possible, the mysteries of the
settlement process.
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Buying and Financing a Home:
Role of the Real Estate Broker:
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Frequently, the first person you consult
about buying a home is a real estate agent
or broker. Although real estate brokers
provide helpful advice on many aspects of
home buying, they may serve the interests of
the seller, and not your interests as the
buyer. The most common practice is for the
seller to hire the broker to find someone
who will be willing to buy the home on terms
and conditions that are acceptable to the
seller. Therefore, the real estate broker
you are dealing with may also represent the
seller. However, you can hire your own real
estate broker, known as a buyer’s broker, to
represent your interests. Also, in some
states, agents and brokers are allowed to
represent both buyer and seller. Even if the
real estate broker represents the seller,
state real estate licensing laws usually
require that the broker treat you fairly. If
you have any questions concerning the
behavior of an agent or broker, you should
contact your State’s Real Estate Commission
or licensing department. Sometimes, the real
estate broker will offer to help you obtain
a mortgage loan. He or she may also
recommend that you deal with a particular
lender, title company, attorney or
settlement/closing agent. You are not
required to follow the real estate broker’s
recommendation. You should compare the costs
and services offered by other providers with
those recommended by the real estate broker.
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Selecting an Attorney:
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Before you sign an agreement of sale, you
might consider asking an attorney to look it
over and tell you if it protects your
interests. If you have already signed your
agreement of sale, you might still consider
having an attorney review it. An attorney
can also help you prepare for the
settlement. In some areas attorneys act as
settlement/closing agents or as escrow
agents to handle the settlement. An attorney
who does this will not solely represent your
interests, since, as settlement/closing
agent, they may also be representing the
seller, the lender and others as well.
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If choosing an attorney, you should shop
around and ask what services will be
performed for what fee. Find out whether the
attorney is experienced in representing home
buyers. You may wish to ask the attorney
questions such as:
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What is the charge for negotiating
the agreement of sale, reviewing
documents and giving advice
concerning those documents, for
being present at the settlement, or
for reviewing instructions to the
escrow agent or company?
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Will the attorney represent anyone
other than you in the transaction?
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Will the attorney be paid by anyone
other than you in the transaction?
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*Please note:
in many areas of the country attorneys are not
normally involved in the home sale. For example,
escrow agents or escrow companies in some states
handle the paperwork to transfer title without any
attorney involvement.
Terms of the Agreement of Sale:
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If you receive this information before you
sign an agreement of sale, here are some
important points to consider. The real
estate broker probably will give you a
preprinted form of agreement of sale. You
may make changes or additions to the form
agreement, but the seller must agree to
every change you make. You should also agree
with the seller on when you will move in and
what appliances and personal property will
be sold with the home.
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Sales Price:
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For most home purchasers, the sales price is
the most important term. Recognize that
other non-monetary terms of the agreement
are also important.
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Title:
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“Title” refers to the legal ownership of
your new home. The seller should provide
title, free and clear of all claims by
others against your new home. Claims by
others against your new home are sometimes
known as “liens” or “encumbrances.” You may
negotiate who will pay for the title search
which will tell you whether the title is
“clear.”
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Mortgage Clause:
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The agreement of sale should provide that
your deposit will be refunded if the sale
has to be canceled because you are unable to
get a mortgage loan. For example, your
agreement of sale could allow the purchase
to be canceled if you cannot obtain mortgage
financing at an interest rate at or below a
rate you specify in the agreement.
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WDI/ Termite Inspections:
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Your lender will require a certificate from
a qualified inspector stating that the home
is free from termites and other pests and
pest damage. You may want to reserve the
right to cancel the agreement or seek
immediate treatment and repairs by the
seller if pest damage is found.
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Home Inspection:
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This is a must for new and old homes alike.
An inspection will determine the condition
of the plumbing, heating, cooling and
electrical systems. The structure should
also be examined to assure it is sound and
to determine the condition of the roof,
siding, windows and doors. The lot should be
graded away from the house so that water
does not drain toward the house and into the
basement. Most buyers prefer to pay for
these inspections so that the inspector is
working for them, not the seller. You may
wish to include in your agreement of sale
the right to cancel, if you are not
satisfied with the inspection results. In
that case, you may want to re-negotiate for
a lower sale price or require the seller to
make repairs.
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Don’t let minor deferred maintenance issues
or non major discrepancies ruin the deal for
your dream home. Keep in mind that no house
is perfect and
anything & everything can be fixed.
The question is – at what cost? You & your
Real Estate Agent should discuss
discrepancies found and decide if you want
or need further negotiations. Your Real
Estate Agent is obligated to look out for
your best interests.
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Lead-Based Paint Hazards in Housing Built Before
1978:
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If you buy a home built before 1978, you
have certain rights concerning lead-based
paint and lead poisoning hazards. The seller
or sales agent must give you the EPA
pamphlet “Protect Your Family From Lead in
Your Home” or other EPA-approved lead hazard
information. The seller or sales agent must
tell you what the seller actually knows
about the home’s lead-based paint or
lead-based paint hazards and give you any
relevant records or reports.
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You have at least ten (10) days to do an
inspection or risk assessment for lead-based
paint or lead-based paint hazards. However,
to have the right to cancel the sale based
on the results of an inspection or risk
assessment, you will need to negotiate this
condition with the seller.
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Seller disclosure:
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Finally, the seller must attach a disclosure
form to the agreement of sale which will
include a Lead Warning Statement. You, the
seller, and the sales agent will sign an
acknowledgment that these notification
requirements have been satisfied.
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Other Environmental Concerns:
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Your city or state may have laws requiring
buyers or sellers to test for environmental
hazards such as leaking underground oil
tanks, the presence of radon or asbestos,
lead water pipes, and other such hazards,
and to take the steps to clean-up any such
hazards. You may negotiate who will pay for
the costs of any required testing and/or
clean-up.
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Sharing of Expenses:
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You need to agree with the seller about how
expenses related to the property such as
taxes, water and sewer charges, condominium
fees, and utility bills, are to be divided
on the date of settlement. Unless you agree
otherwise, you should only be responsible
for the portion of these expenses owed after
the date of sale.
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Settlement Agent/Escrow Agent or Company:
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Depending on local practices, you may have
an option to select the settlement agent or
escrow agent or company. For states where an
escrow agent or company will handle the
settlement, the buyer, seller and lender
will provide instructions.
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Settlement Costs:
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You can negotiate which settlement costs you
will pay and which will be paid by the
seller.
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Shopping For a Loan:
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Your choice of lender and type of loan will
influence not only your settlement costs,
but also the monthly cost of your mortgage
loan. There are many types of lenders and
types of loans you can choose. You may be
familiar with banks, savings associations,
mortgage companies and credit unions, many
of which provide home mortgage loans. You
may find a listing of some mortgage lenders
in the yellow pages or a listing of rates in
your local newspaper.
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Mortgage Brokers:
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Some companies, known as “mortgage brokers”
offer to find you a mortgage lender willing
to make you a loan. A mortgage broker may
operate as an independent business and may
not be operating as your “agent” or
representative. Your mortgage broker may be
paid by the lender, you as the borrower, or
both. You may wish to ask about the fees
that the mortgage broker will receive for
its services.
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Government Programs:
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You may be eligible for a loan insured
through the Federal Housing Administration
(“FHA”) or guaranteed by the Department of
Veterans Affairs or similar programs
operated by cities or states. These programs
usually require a smaller down payment. Ask
lenders about these programs. You can get
more information about these programs from
the agencies that run them.
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CLOs:
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Computer loan origination systems, or CLOs,
are computer terminals sometimes available
in real estate offices or other locations to
help you sort through the various types of
loans offered by different lenders. The CLO
operator may charge a fee for the services
the CLO offers. This fee may be paid by you
or by the lender that you select.
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Types of Loans:
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Loans can have a fixed interest rate or a
variable interest rate. Fixed rate loans
have the same principal and interest
payments during the loan term. Variable rate
loans can have any one of a number of
“indexes” and “margins” which determine how
and when the rate and payment amount change.
If you apply for a variable rate loan, also
known as an adjustable rate mortgage
(“ARM”), a disclosure and booklet required
by the Truth in Lending Act will further
describe the ARM. Most loans can be repaid
over a term of 30 years or less. Most loans
have equal monthly payments. The amounts can
change from time to time on an ARM depending
on changes in the interest rate. Some loans
have short terms and a large final payment
called a “balloon.” You should shop for the
type of home mortgage loan terms that best
suit your needs.
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Interest Rate, “Points” & Other Fees:
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Often the price of a home mortgage loan is
stated in terms of an interest rate, points,
and other fees. A “point” is a fee that
equals 1 percent of the loan amount. Points
are usually paid to the lender, mortgage
broker, or both, at the settlement or upon
the completion of the escrow. Often, you can
pay fewer points in exchange for a higher
interest rate or more points for a lower
rate. Ask your lender or mortgage broker
about points and other fees.
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A document called the Truth in Lending
Disclosure Statement will show you the
“Annual Percentage Rate” (“APR”) and other
payment information for the loan you have
applied for. The APR takes into account not
only the interest rate, but also the points,
mortgage broker fees and certain other fees
that you have to pay. Ask for the APR before
you apply to help you shop for the loan that
is best for you. Also ask if your loan will
have a charge or a fee for paying all or
part of the loan before payment is due
(“prepayment penalty”). You may be able to
negotiate the terms of the prepayment
penalty.
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Lender-Required Settlement Costs:
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Your lender may require you to obtain
certain settlement services, such as a new
survey, mortgage insurance or title
insurance. It may also order and charge you
for other settlement-related services, such
as the appraisal or credit report. A lender
may also charge other fees, such as fees for
loan processing, document preparation,
underwriting, flood certification or an
application fee. You may wish to ask for an
estimate of fees and settlement costs before
choosing a lender. Some lenders offer “no
cost” or “no point” loans but normally cover
these fees or costs by charging a higher
interest rate.
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Comparing Loan Costs:
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Comparing APRs may be an effective way to
shop for a loan. However, you must compare
similar loan products for the same loan
amount. For example, compare two 30-year
fixed rate loans for $100,000. Loan A with
an APR of 8.35% is less costly than Loan B
with an APR of 8.65% over the loan term.
However, before you decide on a loan, you
should consider the up-front cash you will
be required to pay for each of the two loans
as well.
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Another effective shopping technique is to
compare identical loans with different
up-front points and other fees. For example,
if you are offered two 30-year fixed rate
loans for $100,000 and at 8%, the monthly
payments are the same, but the up-front
costs are different:
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Loan A – 2 points ($2,000) and lender
required costs of $1800 = $3800 in costs.
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Loan B – 2 1/4 points ($2250) and lender
required costs of $1200 = $3450 in costs.
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A comparison of the up-front costs shows
Loan B requires $350 less in up-front cash
than Loan A. However, your individual
situation (how long you plan to stay in your
house) and your tax situation (points can
usually be deducted for the tax year that
you purchase a house) may affect your choice
of loans.
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Lock-ins:
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“Locking in” your rate or points at the time
of application or during the processing of
your loan will keep the rate and/or points
from changing until settlement or closing of
the escrow process. Ask your lender if there
is a fee to lock-in the rate and whether the
fee reduces the amount you have to pay for
points. Find out how long the lock-in is
good, what happens if it expires, and
whether the lock-in fee is refundable if
your application is rejected.
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Tax and Insurance Payments:
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Your monthly mortgage payment will be used
to repay the money you borrowed plus
interest. Part of your monthly payment may
be deposited into an “escrow account” (also
known as a “reserve” or “impound” account)
so your lender or servicer can pay your real
estate taxes, property insurance, mortgage
insurance and/or flood insurance. Ask your
lender or mortgage broker if you will be
required to set up an escrow or impound
account for taxes and insurance payments.
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Transfer of Your Loan:
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While you may start the loan process with a
lender or mortgage broker, you could find
that after settlement another company may be
collecting the payments on your loan.
Collecting loan payments is often known as
“servicing” the loan. Your lender or broker
will disclose whether it expects to service
your loan or to transfer the servicing to
someone else.
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Mortgage Insurance:
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Private mortgage insurance and government
mortgage insurance protect the lender
against default and enable the lender to
make a loan which the lender considers a
higher risk. Lenders often require mortgage
insurance for loans where the down payment
is less than 20% of the sales price. You may
be billed monthly, annually, by an initial
lump sum, or some combination of these
practices for your mortgage insurance
premium. Ask your lender if mortgage
insurance is required and how much it will
cost. Mortgage insurance should not be
confused with mortgage life, credit life or
disability insurance, which are designed to
pay off a mortgage in the event of the
borrower’s death or disability.
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You may also be offered “lender paid”
mortgage insurance (“LPMI”). Under LPMI
plans, the lender purchases the mortgage
insurance and pays the premiums to the
insurer. The lender will increase your
interest rate to pay for the premiums — but
LPMI may reduce your settlement costs. You
cannot cancel LPMI or government mortgage
insurance during the life of your loan.
However, it may be possible to cancel
private mortgage insurance at some point,
such as when your loan balance is reduced to
a certain amount. Before you commit to
paying for mortgage insurance, find out the
specific requirements for cancellation.
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Flood Hazard Areas:
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Most lenders will not lend you money to buy
a home in a flood hazard area unless you pay
for flood insurance. Some government loan
programs will not allow you to purchase a
home that is located in a flood hazard area.
Your lender may charge you a fee to check
for flood hazards. You should be notified if
flood insurance is required. If a change in
flood insurance maps brings your home within
a flood hazard area after your loan is made,
your lender or servicer may require you to
buy flood insurance at that time.
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Selecting a Settlement Agent:
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Settlement practices vary from locality to
locality, and even within the same county or
city. Settlements may be conducted by
lenders, title insurance companies, escrow
companies, real estate brokers or attorneys
for the buyer or seller. You may save money
by shopping for the settlement agent.
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In some parts of the country (particularly
western states), settlement may be conducted
by an escrow agent. The parties sign an
escrow agreement which requires them to
provide certain documents and funds to the
agent. Unlike other types of settlement, the
parties do not meet around a table to sign
documents. Ask how your settlement will be
handled.
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Securing Title Services:
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Title insurance is usually required by the
lender to protect the lender against loss
resulting from claims by others against your
new home. In some states, attorneys offer
title insurance as part of their services in
examining title and providing a title
opinion. The attorney’s fee may include the
title insurance premium. In other states, a
title insurance company or title agent
directly provides the title insurance.
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Owner’s Policy:
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A lender’s title insurance policy does not
protect you. Similarly, the prior owner’s
policy does not protect you. If you want to
protect yourself from claims by others
against your new home, you will need an
owner’s policy. When a claim does occur, it
can be financially devastating to an owner
who is uninsured. If you buy an owner’s
policy, it is usually much less expensive if
you buy it at the same time and with the
same insurer as the lender’s policy.
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Choice of Title Insurer:
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Under RESPA, the seller may not require you,
as a condition of the sale, to purchase
title insurance from any particular title
company. Generally, your lender will require
title insurance from a company that is
acceptable to it. In most cases you can shop
for and choose a company that meets the
lender’s standards.
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Review Initial Title Report:
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In many areas, a few days or weeks before
the settlement or closing of the escrow, the
title insurance company will issue a
“Commitment to Insure” or preliminary report
or “binder” containing a summary of any
defects in title which have been identified
by the title search, as well as any
exceptions from the title insurance policy’s
coverage. The commitment is usually sent to
the lender for use until the title insurance
policy is issued at or after the settlement.
You can arrange to have a copy sent to you
(or to your attorney) so that you can object
if there are matters affecting the title
which you did not agree to accept when you
signed the agreement of sale.
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Coverage & Cost Savings:
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To save money on title insurance, compare
rates among various title insurance
companies. Ask what services and limitations
on coverage are provided under each policy
so that you can decide whether coverage
purchased at a higher rate may be better for
your needs. However, in many states, title
insurance premium rates are established by
the state and may not be negotiable. If you
are buying a home which has changed hands
within the last several years, ask your
title company about a “reissue rate,” which
would be cheaper. If you are buying a newly
constructed home, make certain your title
insurance covers claims by contractors.
These claims are known as “mechanics’ liens”
in some parts of the country.
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Survey:
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Lenders or title insurance companies often
require a survey to mark the boundaries of
the property. A survey is a drawing of the
property showing the perimeter boundaries
and marking the location of the house and
other improvements. You may be able to avoid
the cost of a complete survey if you can
locate the person who previously surveyed
the property and request an update. Check
with your lender or title insurance company
on whether an updated survey is acceptable.
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RESPA Disclosures:
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One of the purposes of RESPA is to help
consumers become better shoppers for
settlement services. RESPA requires that
borrowers receive disclosures at various
times. Some disclosures spell out the costs
associated with the settlement, outline
lender servicing and escrow account
practices and describe business
relationships between settlement service
providers.
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Good Faith Estimate of Settlement Costs:
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RESPA requires that, when you apply for a
loan, the lender or mortgage broker give you
a Good Faith Estimate of settlement service
charges you will likely have to pay. If you
do not get this Good Faith Estimate when you
apply, the lender or mortgage broker must
mail or deliver it to you within the next
three business days.
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Be aware that the amounts listed on the Good
Faith Estimate are only estimates. Actual
costs may vary. Changing market conditions
can affect prices. Remember that the
lender’s estimate is not a guarantee. Keep
your Good Faith Estimate so you can compare
it with the final settlement costs and ask
the lender questions about any changes.
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Servicing Disclosure Statement:
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RESPA requires the lender or mortgage broker
to tell you in writing, when you apply for a
loan or within the next three business days,
whether it expects that someone else will be
servicing your loan (collecting your
payments).
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Affiliated Business Arrangements:
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Sometimes, several businesses that offer
settlement services are owned or controlled
by a common corporate parent. These
businesses are known as “affiliates.” When a
lender, real estate broker, or other
participant in your settlement refers you to
an affiliate for a settlement service (such
as when a real estate broker refers you to a
mortgage broker affiliate), RESPA requires
the referring party to give you an
Affiliated Business Arrangement Disclosure.
This form will remind you that you are
generally not required, with certain
exceptions, to use the affiliate and are
free to shop for other providers.
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HUD-1 Settlement Statement:
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One business day before the settlement, you
have the right to inspect the HUD-1
Settlement Statement. This statement
itemizes the services provided to you and
the fees charged to you. This form is filled
out by the settlement agent who will conduct
the settlement. Be sure you have the name,
address, and telephone number of the
settlement agent if you wish to inspect this
form. The fully completed HUD-1 Settlement
Statement generally must be delivered or
mailed to you at or before the settlement.
In cases where there is no settlement
meeting, the escrow agent will mail you the
HUD-1 after settlement, and you have no
right to inspect it one day before
settlement.
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Escrow Account Operation & Disclosures:
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Your lender may require you to establish an
escrow or impound account to insure that
your taxes and insurance premiums are paid
on time. If so, you will probably have to
pay an initial amount at the settlement to
start the account and an additional amount
with each month’s regular payment. Your
escrow account payments may include a
“cushion” or an extra amount to ensure that
the lender has enough money to make the
payments when due. RESPA limits the amount
of the cushion to a maximum of two months of
escrow payments.
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At the settlement or within the next 45
days, the person servicing your loan must
give you an initial escrow account
statement. That form will show all of the
payments which are expected to be deposited
into the escrow account and all of the
disbursements which are expected to be made
from the escrow account during the year
ahead. Your lender or servicer will review
the escrow account annually and send you a
disclosure each year which shows the prior
year’s activity and any adjustments
necessary in the escrow payments that you
will make in the forthcoming year.
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Processing Your Loan Application:
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Here are several federal laws which provide
you with protection during the processing of
your loan. The Equal Credit Opportunity Act
(“ECOA”), the Fair Housing Act, and the Fair
Credit Reporting Act (“FCRA”) prohibit
discrimination and provide you with the
right to certain credit information.
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No Discrimination:
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ECOA prohibits lenders from discriminating
against credit applicants on the basis of
race, color, religion, national origin, sex,
marital status, age, the fact that all or
part of the applicant’s income comes from
any public assistance program, or the fact
that the applicant has exercised any right
under any federal consumer credit protection
law. To help government agencies monitor
ECOA compliance, your lender or mortgage
broker must request certain information
regarding your race, sex, marital status and
age when taking your loan application.
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The Fair Housing Act also prohibits
discrimination in residential real estate
transactions on the basis of race, color,
religion, sex, handicap, familial status or
national origin. This prohibition applies to
both the sale of a home to you and the
decision by a lender to give you a loan to
help pay for that home. Finally, your
locality or state may also have a law which
prohibits discrimination.
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Frequently, there are differences in the
types and amounts of settlement costs
charged to the borrower — for example, some
borrowers are charged greater fees for
mortgages depending on their credit
worthiness. These differences may be
justified or they may be unlawfully
discriminatory. It is important that you
examine your settlement documents closely
and do not hesitate to compare your
settlement costs with those of your friends
and neighbors.
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If you feel you have been discriminated
against by a lender or anyone else in the
home buying process, you may file a private
legal action against that person or complain
to a state, local or federal administrative
agency. You may want to talk to an attorney
or you may want to ask the federal agency
that enforces ECOA (the Board of Governors
of the Federal Reserve System) or the Fair
Housing Act (HUD) about your rights under
these laws.
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Prompt Action/Notification of Action Taken:
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Your lender or mortgage broker must act on
your application and inform you of the
action taken no later than 30 days after it
receives your completed application. Your
application will not be considered complete,
and the 30 day period will not begin, until
you provide to your lender or mortgage
broker all of the material and information
requested.
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Statement of Reasons for Denial:
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If your application is denied, ECOA requires
your lender or mortgage broker to give you a
statement of the specific reasons why it
denied your application or tell you how you
can obtain such a statement. The notice will
also tell you which federal agency to
contact if you think the lender or mortgage
broker has illegally discriminated against
you.
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Obtaining Your Credit Report:
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The Fair Credit Reporting Act (“FCRA”)
requires a lender or mortgage broker that
denies your loan application to tell you
whether it based its decision on information
contained in your credit report. If that
information was a reason for the denial, the
notice will tell you where you can get a
free copy of the credit report. You have the
right to dispute the accuracy or
completeness of any information in your
credit report. If you dispute any
information, the credit reporting agency
that prepared the report must investigate
free of charge and notify you of the results
of the investigation.
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Obtaining Your Appraisal:
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The lender needs to know if the value of
your home is enough to secure the loan. To
get this information, the lender typically
hires an appraiser, who gives a professional
opinion about the value of your home. ECOA
requires your lender or mortgage broker to
tell you that you have a right to get a copy
of the appraisal report. The notice will
also tell you how and when you can ask for a
copy.
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RESPA Protection Against Illegal Referral Fees:
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ESPA was enacted because Congress felt that
consumers needed protection from “…
unnecessarily high settlement charges caused
by certain abusive practices that have
developed in some areas of the country.”
Some of the practices Congress was concerned
about are discussed below. Most
professionals in the settlement business
provide good service and do not engage in
these practices.
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Prohibited Fees:
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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.
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Permitted Payments:
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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.
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Penalties:
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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.
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Private Lawsuits:
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If you have a problem, the best place to
have it fixed is at its source (the lender,
settlement agent, broker, etc.). If that
approach fails and you think you have
suffered because of a violation of RESPA,
ECOA or any other law, you may be entitled
to sue in a federal or state court. This is
a matter you should discuss with your
attorney.
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Government Agencies:
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Most settlement service providers are
supervised by a governmental agency at the
local, state and/or federal level. Your state’s Attorney General may
have a consumer affairs division. If you
feel that a provider of settlement services
has violated RESPA or any other law, you can
complain to that agency or association. You
may also send a copy of your complaint to
the HUD Office of Consumer & Regulatory
Affairs.
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Servicing Errors:
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If you have a question any time during the
life of your loan, RESPA requires the
company collecting your loan payments (your
“servicer”) to respond to you. Write to your
servicer and call it a “qualified written
request under Section 6 of RESPA.” A
“qualified written request” should be a
separate letter and not mailed with the
payment coupon. Describe the problem and
include your name and account number. The
servicer must investigate and make
appropriate corrections within 60 business
days.
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Office
(941) 244-3350