News: In the News
You've been warned: CFPB puts real estate agents, lenders on RESPA violation watch
By: Brena Swanson
RESPA — the Real Estate Settlement Procedures Act — is a current buzzword in the housing industry with an increased scrutiny from the industry’s top consumer watchdog.
Between the Consumer Financial Protection Bureau slapping Prospect Mortgage with a $3.5 million fine for violating RESPA earlier this year and beefing up its ongoing investigation into Zillow for possibly violating RESPA, the real estate agent/lender space is being sent a warning, one industry attorney advises.
Under RESPA, lenders, mortgage brokers, or servicers of home loans are required to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. The act also prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts.
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