The correct answer is A, a federally related mortgage loan. RESPA and Regulation X govern specified settlement-service practices connected with federally related mortgage loans.
The CFPB ' s current guidance explains that RESPA Section 8 applies to referrals and settlement services incident to or part of a real-estate settlement involving a federally related mortgage loan.
Settlement services can include mortgage origination, title work, closing services, appraisal, credit reporting, surveys, real estate brokerage services, mortgage brokerage, and other services associated with settlement.
RESPA does not simply apply because any real property changes hands. Certain transactions and loan types fall outside its coverage, and purely cash transactions do not automatically become federally related mortgage transactions.
A major RESPA examination topic is Section 8 ' s prohibition on kickbacks and unearned referral fees. Current Regulation X prohibits paying or accepting a thing of value for settlement-service referrals in covered transactions.
Study Guide Reference: Financing — RESPA and Federally Related Mortgage Loans.
