Under RESPA, a uniform settlement statement must be used whenever

Under RESPA, a uniform settlement statement must be used whenever

• A. The loan is to be sold to FNMA
• B. The loan is insured by FHA
• C. The loan is a cash purchase
• D. The loan is short-term

Answer: (A)

Under RESPA, the uniform settlement statement is required for federally related mortgage loans, which are loans secured by a dwelling and that may be sold to government-sponsored entities like FNMA or insured by FHA. The purpose is to provide a standardized, itemized disclosure of closing costs so borrowers can compare costs and understand what they’re paying. The scenario that triggers this requirement is a loan that is to be sold to FNMA. That intention makes the loan a federally related mortgage loan, so the uniform settlement statement must be used at closing. Cash purchases don’t involve a mortgage, so RESPA’s settlement statement isn’t needed, and a short‑term loan’s applicability depends on whether it’s a mortgage secured by real estate; the clear indicator in this option is the loan’s plan to be sold to FNMA.

Under RESPA, the uniform settlement statement is required for federally related mortgage loans, which are loans secured by a dwelling and that may be sold to government-sponsored entities like FNMA or insured by FHA. The purpose is to provide a standardized, itemized disclosure of closing costs so borrowers can compare costs and understand what they’re paying.

The scenario that triggers this requirement is a loan that is to be sold to FNMA. That intention makes the loan a federally related mortgage loan, so the uniform settlement statement must be used at closing. Cash purchases don’t involve a mortgage, so RESPA’s settlement statement isn’t needed, and a short‑term loan’s applicability depends on whether it’s a mortgage secured by real estate; the clear indicator in this option is the loan’s plan to be sold to FNMA.