The following information was obtained from the Federal Consumer Information Center

Buying Your Home: Settlement Costs and Helpful Information
http://www.pueblo.gsa.gov/cic_text/housing/settlement/sfhrestc.html

RESPA Disclosures:

• RESPA disclosures help consumers become better shoppers for settlement services. RESPA requires that borrowers receive disclosures at various times.
  
  
• These disclosures lists the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

Good Faith Estimate of Settlement Costs:

• RESPA requires that within the next three business days after submission of your mortgage application, the lender or mortgage broker must provide you a Good Faith Estimate of settlement service charges you will likely have to pay.
  
  
• Note that the amounts listed on the Good Faith Estimate are only estimates. Actual costs may vary at time of closing.

Servicing Disclosure Statement:

• RESPA requires the lender or mortgage broker to tell you in writing, when you apply for a loan or within the next three business days, whether it expects that someone else will be servicing your loan (collecting your payments).

Affiliated Business Arrangements:

• When a lender, real estate broker, or other participant in your settlement refers you to an affiliate for a settlement service, RESPA requires the referring party to give you an Affiliated Business Arrangement Disclosure.
  
  
• Affiliates are businesses that are owned or controlled by the parent company, such as the lender, real estate broker, or other involved in your settlement. You are not required to use these affiliates and under certain circumstances, you are free to shop for other providers.

HUD-1 Settlement Statement:

• One business day before the settlement, you have the right to inspect The HUD-1 Settlement Statement itemizes the services provided to you and the fees charged to you. This form is filled out by the settlement agent or attorney who will conduct the settlement.
  
  
• You have the right to inspect this statement one business day before settlement. Be sure you have the name, address, and telephone number of the settlement agent if you wish to inspect this form.

Escrow Account Operation & Disclosures:

• Your lender may require an escrow account for the prompt payment of taxes and insurance premiums. To start the escrow account, you will probably an initial amount and a cushion to ensure that the lender has enough money to make the payments when due. RESPA limits the amount of the cushion to a maximum of two months of escrow payments.
  
  
• Your lender or servicer is required to review the escrow account annually and send you a disclosure each year which shows the prior year's activity and any adjustments necessary in the escrow payments that you will make in the forthcoming year.

Mortgage Submission Protection Laws

There are several federal laws which provide you with protection during the processing of your loan. The Equal Credit Opportunity Act ("ECOA"), the Fair Housing Act, and the Fair Credit Reporting Act ("FCRA") prohibit discrimination and provide you with the right to certain credit information.

• No Discrimination.. ECOA prohibits lenders from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, the fact that all or part of the applicant's income comes from any public assistance program, or the fact that the applicant has exercised any right under any federal consumer credit protection law. To help government agencies monitor ECOA compliance, your lender or mortgage broker must request certain information regarding your race, sex, marital status and age when taking your loan application.
  
  The Fair Housing Act also prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status or national origin. This prohibition applies to both the sale of a home to you and the decision by a lender to give you a loan to help pay for that home. Finally, your locality or state may also have a law which prohibits discrimination.
  
  
• Prompt Action/Notification of Action Taken. Your lender or mortgage broker must act on your application and inform you of the action taken no later than 30 days after it receives your completed application. Your application will not be considered complete, and the 30 day period will not begin, until you provide to your lender or mortgage broker all of the material and information requested.
  
  
• Statement of Reasons for Denial. If your application is denied, ECOA requires your lender or mortgage broker to give you a statement of the specific reasons why it denied your application or tell you how you can obtain such a statement. The notice will also tell you which federal agency to contact if you think the lender or mortgage broker has illegally discriminated against you.
  
  
• Obtaining Your Credit Report. The Fair Credit Reporting Act ("FCRA") requires a lender or mortgage broker that denies your loan application to tell you whether it based its decision on information contained in your credit report. If that information was a reason for the denial, the notice will tell you where you can get a free copy of the credit report. You have the right to dispute the accuracy or completeness of any information in your credit report. If you dispute any information, the credit reporting agency that prepared the report must investigate free of charge and notify you of the results of the investigation.
  
  
• Obtaining Your Appraisal. The lender needs to know if the value of your home is enough to secure the loan. To get this information, the lender typically hires an appraiser, who gives a professional opinion about the value of your home. ECOA requires your lender or mortgage broker to tell you that you have a right to get a copy of the appraisal report. The notice will also tell you how and when you can ask for a copy.
  
  
• Prohibited Fees. It is illegal under RESPA for anyone to pay or receive a fee, kickback or anything of value because they agree to refer settlement service business to a particular person or organization. For example, your mortgage lender may not pay your real estate broker $250 for referring you to the lender. It is also illegal for anyone to accept a fee or part of a fee for services if that person has not actually performed settlement services for the fee. For example, a lender may not add to a third party's fee, such as an appraisal fee, and keep the difference.
  
  
• Permitted Payments. RESPA does not prevent title companies, mortgage brokers, appraisers, attorneys, settlement/closing agents and others, who actually perform a service in connection with the mortgage loan or the settlement, from being paid for the reasonable value of their work. If a participant in your settlement appears to be taking a fee without having done any work, you should advise that person or company of the RESPA referral fee prohibitions. You may also speak with your attorney or complain to a regulator listed in the Appendix to this Booklet
  
  
• Penalties. It is a crime for someone to pay or receive an illegal referral fee. The penalty can be a fine, imprisonment or both. You may be entitled to recover three times the amount of the charge for any settlement service by bringing a private lawsuit. If you are successful, the court may also award you court costs and your attorney's fees.