The Real Estate Settlement Procedures Act (RESPA) covers home buyers when purchasing a home in the Real Estate market. Many financial companies are looking to take advantage of these home buyers to rob them of everything they can out of the loan. When this happens, it is time to contact a RESPA violations lawyer.
What is the Purpose of the RESPA?
The RESPA was effective in 1975, and Congress has amended this act several times to protect home buyers and those involved in Real Estate transactions for residential homes.
Everyone knows the stack of papers of contracts and other legal agreements that goes with buying a home and getting a mortgage. The best a person can do is to read everything to the best of their knowledge before signing each document.
It is within the fine print and the strategic wording that causes mishaps in the loan process. These financial companies who are dishonest know this, and they use every trick in the book to get homebuyers. There are so many extras in the costs that it is easy to slip unnecessary extra expenses onto the list.
The primary goal of the RESPA is to ensure that those signing the documents fully understand what they are signing and the procedures and costs that are involved with buying their home. It is illegal for any lender or financial service to raise the costs, Escrow accounts included. There are also deadlines to meet should honest mistakes occur for the lenders to fix them correctly.
The RESPA Violations Explained
The RESPA regulates federal mortgage loans and all the loans associated with them. Mortgage brokers, lenders, title companies, service of home loans, and others are subject to this act if any violations are discovered. The violations occur when any action or non-action takes place that is against the consumer protection regulations.
Due to the residential real estate transaction process, many homebuyers do not know that a violation is occurring. The best thing is to consult with an attorney who handles real estate. If an infringement has taken place, or if it is fixing to happen, they can spot it and stop the financial services in their tracks.
Most violations have documents within the stack of papers that duplicate, inflate, or have hidden fees that are not fully explained for the homebuyer to catch or understand. The homebuyer has the right to request that mistakes get fixed before the deadline and request more information on what they are signing. If there is something the homebuyer does not understand, it is the responsibility by law that instructions are given and understood by the financial services. If the companies fail to do this, the attorney can push them in the right direction.
Examples of RESPA Violations
Once the homebuyers understand what the RESPA does, they can understand how financial companies violate the act and try to take more money than what is allowed by law. Some examples of violations are as follows:
- Raising the cost of the closing fees
- Charging more for their services than permitted by law
- Filling in any additional hidden fees that are not known to the homebuyer
- Taking kickbacks is when a company gives or receives a monetary payment or valuable items while exchanging referrals.
Financial companies must understand they are breaking the law if any of these violations take place, but receiving kickbacks holds sentencing of penalties, fines, and jail time.
It is also illegal not to disclose to homebuyers the following:
- Annual and initial Escrow statements
- A statement with all the fees that will appear at closing and everything must be accurate.
- A Good Faith Estimate at the time of the mortgage loan application process of how much the Closing cost will be.
- All requests from the homebuyer to the financial company have a deadline for legal matters, such as fixing mistakes and delivering all required information. NOTE: All requests from the homebuyer must be in writing for documentation and timelines.
More Information Concerning Deadlines Under RESPA
The homebuyer has the right to request information concerning the loan and request an investigation of errors. It is up to the financial company to respond within thirty business days. The servicers must respond with the following:
- Within five days of receiving the homebuyer’s request, the financial companies must send a letter back informing the homebuyer that the request was received.
- If they cannot send the requested information back within the 30-day timeframe, they must respond with a letter explaining why more time is needed to reply and that they are working on the issue.
If foreclosure becomes an issue due to the delay of the company’s response, keep all the letters and get with an attorney immediately. It should not go past day 31 to get with the attorney because they will need time to fight back to see if they can stop the foreclosure process.
In some situations, the financial companies will continue to threaten foreclosure, but you have a case if they do not respond. That is why it is essential to keep everything documented in writing with dates, times, statements made, and no statements.
What Can a RESPA Violation Lawyer Do?
After the free consultation, they can advise the homebuyer on the directions to take and act as the advocate between the homebuyer and the financial company. No news from the financial companies is just as aggravating as being harassed for missing a payment.
The attorney can get them talking. Most companies will choose to ignore you until the word “lawyer” or “attorney” comes up. When these words come up, companies start moving. That is why it is better to have an attorney working in your favor.
If it comes down to litigation, an attorney can get up to $2,000 per violation against the RESPA. They can also get the attorney’s fees so the homebuyer can keep the awarded amount for each violation.
The RESPA violation attorney can also assist the homeowner in reporting the violation to the Consumer Financial Protection Bureau (CFPB). Within 15 days, they give response to the situation, investigate the violation(s), and enforce the RESPA. The CFPB also reviews patterns from several complaints. The more complaints there are, the more they push harder for the financial companies to comply better with their clients.
There is no reason to pay more to financial companies. If there are any questions, the RESPA violations attorney can answer all the questions concerning Real Estate. It is wise to bring all the paperwork to the attorney to avoid any issues in the future, first before signing the application.