Multiple Choice
If a bank with a required reserve ratio of 15\% receives a deposit of \$600, how much must it hold as required reserves?
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7. Receivables and Investments
Types of Receivables
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The Real Estate Settlement Procedures Act (RESPA) prohibits all of the following practices except:
A
Charging unearned fees for settlement services
B
Allowing borrowers to choose their own settlement service providers
C
Paying or receiving kickbacks for referrals of settlement service business
D
Requiring the use of a specific title insurance company
Verified step by step guidance1
Step 1: Understand the Real Estate Settlement Procedures Act (RESPA). RESPA is a federal law designed to protect consumers during the real estate settlement process. It aims to ensure transparency and fairness in the provision of settlement services.
Step 2: Review the prohibited practices under RESPA. These include charging unearned fees for settlement services, paying or receiving kickbacks for referrals of settlement service business, and requiring the use of a specific title insurance company.
Step 3: Identify the exception to the prohibited practices. RESPA allows borrowers to choose their own settlement service providers, which is not prohibited under the act.
Step 4: Compare the options provided in the question to determine which one aligns with the exception allowed by RESPA.
Step 5: Conclude that the correct answer is the practice that RESPA permits, which is 'Allowing borrowers to choose their own settlement service providers.'
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