California Real Estate Practice Exam

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According to R.E.S.P.A., when must a lender provide a Special Information Booklet and a "Good Faith Estimate" of closing costs for a federally related loan?

12 business days
15 business days
21 business days
3 business days

The correct answer is: 12 business days

The correct answer indicates that under the Real Estate Settlement Procedures Act (RESPA), lenders are required to provide a Special Information Booklet and a Good Faith Estimate (GFE) of closing costs within a specific timeframe. According to RESPA regulations, these documents must be given to the borrower within three business days after the loan application is submitted. This requirement ensures that borrowers have access to essential information about closing costs and the settlement process, allowing them to make informed decisions. The Special Information Booklet serves to inform borrowers of their rights and outlines the settlement process, while the Good Faith Estimate gives an estimate of the costs associated with obtaining the loan. These disclosures are crucial for promoting transparency and protecting consumers in real estate transactions related to federally related loans.