Exam 16: Closing the Deal

The Government Mortgage Package is opposed by both industry and consumer groups.

Jenna and Todd Alder are closing on their home. Their GFE disclosure put their closing costs at $4,200. When they arrive for their closing, the escrow agent explains that their closing costs will be $5,800. Which of the following are important in making the determination of whether closing costs of a RESPA-covered loan violated RESPA?

Johann Benetton was executor of his father's estate and sold a tract of land belonging to the estate for $400,000 to Maria Alvarez and her brother, Ezquiel. Johann, his sister and his brother were designated as equal beneficiaries in their father's will. First Title served as the escrow agent for closing the sale. The escrow instructions provided that First Title was to pay the proceeds from the closing to the executor. After the sale closed, First Title sent a check for the net of $360,000 to Johann. Johann failed to pay his sister and brother their share of the proceeds. Johann's brother and sister have filed suit to collect the funds.

Which of the following figures need not be given in the good faith estimate?

Which is not a requirement for setting up an escrow?

Drew Canfield is a mortgage broker who specializes in subprime loans. If he places borrowers in negative amortization loans, he earns a higher rebate. These loans also carry a higher interest rate for the borrowers. Drew tries to steer borrowers into these loans.

The buyer's information handbook:

As between buyer and seller, the escrow instructions are controlling in the event of a conflict of terms.

RESPA is applicable to all loans involving government insurance.

Which of the following is true regarding YSPs?

RESPA does not apply to residential refinancings.

In running a title search, National Escrow discovers that the seller's property does not have a lien release on a mortgage that was paid off ten years ago. The seller furnishes a letter from the lender that states the loan was paid in full. The escrow instructions require National to have all lien releases filed or on record before closing. Because the actual release will take 21 days to process, National closed escrow with only the letter.

Both the buyer and the seller must sign the escrow instructions for it to be valid.

The better the credit rating of the borrower, the more the mortgage broker can make on placing the mortgage.

Cora Roth received her GFE for closing costs of $2,316. When she closes on her new home, the closing costs are $2,398.