Florida Attorneys Advise on the Real Estate Settlement Procedures Act
Accomplished Miami real estate lawyer helps protect homeowners
Historically, the real estate market was stacked against potential buyers, with various players colluding to withhold information and impose unnecessary expenses. The Real Estate Settlement Procedures Act (RESPA), passed in 1974, was designed to eliminate abusive practices, such as kickbacks and referral fees, which artificially inflated the cost of home purchases. At Norma Echarte & Associates in Miami, our real estate attorneys are determined to enforce the protections afford to home buyers through RESPA and other laws. When we participate in a transaction, we work to safeguard your rights, so you get a fair deal under the law. Our firm also assists real estate professionals who may need trustworthy guidance on RESPA to remain in compliance with its provisions.
Basic homebuyer protections under RESPA
RESPA is a federal law affecting federally related home purchases, as well as mortgage refinancing, property improvement loans, equity lines of credit and reverse mortgages. The law, administered by the Consumer Financial Protection Bureau, protects home buyers through a series of provisions addressing:
- Lender disclosures — Since 2013, RESPA has set requirements for disclosures in mortgage transactions under the Truth in Lending Act. Under RESPA, lenders must provide relevant disclosures, such as a Good-Faith Estimate of Settlement Costs, a Special Information Booklet, a HUD-1/1A Settlement Statement and Mortgage Servicing Disclosures. The Good-Faith Estimate is required to be given to the potential borrower within three business days of when the lender receives an application. The document has to list origination charges, estimates for appraisals, credit reports and other required services, title insurance, per diem interest, escrow deposits and insurance premiums. When acting as the closing attorney, we ensure that closing disclosures conform with all RESPA requirements.
- Ban on kickbacks and referral fees — Prior to RESPA’s passage, lenders, real estate appraisers, real estate agents, construction companies and title insurance companies often colluded to obtain business from one another. These nefarious practices inflated costs for consumers. RESPA outlawed these practices to restore free-market competition. Today, no person may give or receive a fee or anything of value for a referral related to mortgage loan settlement business. Any fees paid for mortgage-related services must be disclosed, and these fees must be for services actually performed.
- Guidelines for the management escrow accounts — Substantial sums might be deposited in escrow accounts while a sale is pending. RESPA establishes required accounting practices for the management of escrow funds.
- Borrower’s request for information — RESPA sets deadlines for lenders to respond to written requests for information. When lenders fail to comply, the borrower is entitled to actual damages, as well as costs and attorneys’ fees. A lender might also have to pay exemplary damages of up to $2,000 if the lender has shown a pattern of noncompliance.
RESPA rules can be confusing for real estate professionals as well as home buyers. We counsel purchasers as well as financial institutions and others associated with the real estate industry on the application of these standards. To avoid problems that could cost you money and hurt your professional reputation, consult with our real estate attorneys, who have the in-depth knowledge needed to help keep you on track.
Contact an experienced Miami real estate attorney for answers to RESPA questions
Norma Echarte & Associates in Miami enforces home buyers’ rights under RESPA and helps real estate professionals comply with all applicable rules. Call us at 305-501-2844 or contact us online today. Ms. Echarte and several staff members are bilingual in Spanish or Portuguese.