Which of the following services is included in the definition of a settlement service?

Which of the following services is included in the definition of a settlement service?
A . Flood insurance
B . Homeowners association fees
C . Title company/escrow agent services
D . Sale of the mortgage loan on the secondary market

View Answer

Answer: C

Explanation:

Under RESPA (Real Estate Settlement Procedures Act), settlement services include activities related to closing the mortgage loan, such as title company services and escrow agent services. These services are integral to the settlement process and ensure that the transaction is completed legally and correctly.

Flood insurance (A) is required for properties in flood zones but is not considered a settlement service.

Homeowners association fees (B) and the sale of the mortgage loan on the secondary market (D) are also not part of the settlement services.

References:

RESPA (Real Estate Settlement Procedures Act), 12 USC §2602

CFPB RESPA Guidelines on settlement services