Under RESPA, the uniform settlement statement is required for which type of loan transaction?

Under RESPA, the uniform settlement statement is required for which type of loan transaction?

• A. Loans that will be sold to FNMA
• B. FHA-insured loans
• C. Commercial loans
• D. Cash transactions

Answer: (A)

The main idea is that RESPA requires a standardized closing-cost disclosure, the uniform settlement statement (HUD-1), for federally related mortgage loans so borrowers can see exactly what they’ll pay at closing. This form is most closely associated with loans that will be sold into the secondary market, such as those packaged for FNMA, where a consistent, itemized breakdown of fees and credits is essential for transparency. Cash transactions don’t involve a loan closing, and while FHA loans are federally related, the scenario emphasized by RESPA’s standard form is the sale of the loan to FNMA, which is why that option is the best fit.

The main idea is that RESPA requires a standardized closing-cost disclosure, the uniform settlement statement (HUD-1), for federally related mortgage loans so borrowers can see exactly what they’ll pay at closing. This form is most closely associated with loans that will be sold into the secondary market, such as those packaged for FNMA, where a consistent, itemized breakdown of fees and credits is essential for transparency. Cash transactions don’t involve a loan closing, and while FHA loans are federally related, the scenario emphasized by RESPA’s standard form is the sale of the loan to FNMA, which is why that option is the best fit.