What are the mortgage financing guidelines established with RESPA?


Quick Answer

The mortgage financing guidelines established with RESPA include implementation of the Dodd-Frank Act sections, addressing obligations to correct errors asserted by mortgage loan borrowers; to provide certain information requested by such borrowers; and to protect such borrowers in connection with force-placed insurance and abusive practices. It also establishes policies and procedures for providing delinquent borrowers with continuity of contract, as stated by the U.S Department of Housing and Urban Development.

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Full Answer

The Real Estate Settlement Procedures Act (RESPA) is administered and enforced by the Consumer Financial Protection Bureau (CFPB). RESPA ensures that consumers throughout the nation are provided with more helpful information about the cost of the mortgage settlement, as claimed by CFPB. It also protects consumers from unnecessarily high settlement charges and makes obtaining mortgage financing cheaper to consumers.

Mortgage servicing industry experiences problems occasioned by bad practices and sloppy record-keeping and consumers are on the receiving end. With millions of homeowners in distress, many borrowers complain about problems seeking loan modifications or other alternatives to and information about avoiding foreclosure, as reported by CFPB. Borrowers say that service providers lose their application and paperwork for loan modifications. RESPA, therefore, is meant to address all issues of concern pertaining to mortgage finance acquisition.

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