Real Estate Settlement Procedures Act (RESPA) examination procedures

The TILA and RESPA examination procedures have been updated to reflect amendments to Regulations X and Z. Specifically, the updates reflect the Amendments Relating to Small Creditors and Rural or Underserved Areas under TILA (Rural-Small Rule), the Amendments to the 2013 Mortgage Rules under RESPA (Regulation X) and TILA (Regulation Z) (the 2016 Servicing Rule) final rules, and the October 2017 Mortgage Servicing interim final rule. The updates also include corrections and clarifications to existing text.

Summary

The Real Estate Settlement Procedures Act (RESPA) is applicable to all “federally related mortgage loans,” except as provided under 12 CFR 1024.5(b) and 1024.5(d), discussed below. “Federally related mortgage loans” are defined as:

Loans (other than temporary loans), including refinancings that satisfy the following two criteria:

First, the loan is secured by a first or subordinate lien on residential real property, located within a State, upon which either:

• A one-to-four family structure is located or is to be constructed using proceeds of the loan (including individual units of condominiums and cooperatives)
  
• A manufactured home is located or is to be constructed using proceeds of the loan

Second, the loan falls within one of the following categories:

• Loans made by a lender, creditor, dealer
  
• Loans made or insured by an agency of the federal government
  
• Loans made in connection with a housing or urban development program administered by an agency of the federal government
  
• Loans made and intended to be sold by the originating lender or creditor to FNMA, GNMA, or FHLMC (or its successor)
  
• Loans that are the subject of a home equity conversion mortgage or reverse mortgage issued by a lender or creditor subject to the regulation
  

“Federally related mortgage loans” are also defined to include installment sales contracts, land contracts, or contracts for deeds on otherwise qualifying residential property if the contract is funded in whole or in part by proceeds of a loan made by a lender, specified federal agency, dealer or creditor subject to the regulation.