Q: What kinds of transactions are covered under the Real Estate Settlement Procedures Act (RESPA)?
A: Transactions that are covered are those involving a federally related mortgage loan, which includes most loans secured by a lien (first or subordinate position) on residential property. These include home purchase loans, refinances, lender-approved assumptions, property improvement loans, equity lines of credit and reverse mortgages.
Q: What types of transactions are generally not covered under RESPA?
A: The following are not covered: an all-cash sale, a sale where the individual home seller takes back the mortgage, a rental property transaction or other business purpose transaction.
Q: What is FIRPTA?
A: FIRPTA is an acronym for the Foreign Investment in Real Property Tax Act. This tax is imposed on the amount realized from the sale of real property owned by a foreign seller. There are exceptions to this tax-withholding requirement. Given the complexities of tax laws, the buyer and seller should consult with a tax specialist to determine the exact withholding amount or to determine if an exemption to the FIRPTA requirement applies.
Q: May a mortgage banker and a real estate broker advertise their services together, for example, on the same brochure or newspaper advertisement?
A: Nothing in RESPA prevents joint advertising. However, each party should pay pro rata share of the cost to avoid a RESPA violation.
Q: Does FIRPTA apply to a foreign buyer?
A: No. FIRPTA applies when the seller is a foreign person, as defined by FIRPTA.
Q: I’m a broker who specializes in the sale of businesses and business opportunities. I want to call businesses in my area to see if they’re interested in selling. Do the federal Do Not Call laws or regulations apply to businesses?
A: No. The Do Not Call Registry is only for residential telephone numbers.
Q: I know that RESPA (the Real Estate Settlement Procedures Act) requires a lender, as well as mortgage brokers in some instances, to provide a “Good Faith Estimate” to all applicants for a federally related mortgage loan. Do the charges appearing on the Good Faith Estimate have to be exact?
A: No. Under RESPA, the Good Faith Estimate must include the amount of or range of charges for settlement services the borrower is likely to incur in connection with the settlement. Each estimate must be made in good faith and bear a reasonable relationship to the charge a borrower is likely to be required to pay at or before settlement.
Q: Does the federal do-not-call legislation apply to door-to-door solicitations?
A: No. However, you may still be prohibited from making door-to-door solicitations if there is a community, municipal or county restriction on door-to-door solicitations or if there is a posted No Trespassing sign on the property or the community.
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