California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

Practice this question and more.

Which law/act requires a mortgage lender to provide a borrower with a good faith estimate of the closing costs and a special booklet?

FHA
RESPA
Truth in Lending Act
ECOA

The correct answer is: RESPA

RESPA, or the Real Estate Settlement Procedures Act, requires mortgage lenders to provide borrowers with a good faith estimate of closing costs and a special booklet called "Settlement Costs and You" within three days of receiving a loan application. While the other options listed are relevant to the mortgage lending process, they do not specifically address the requirement for providing a good faith estimate and special booklet. The FHA (Federal Housing Administration) is a government agency that insures loans made by approved lenders, the Truth in Lending Act requires lenders to disclose certain information about loan terms and costs, and the ECOA (Equal Credit Opportunity Act) prohibits discrimination in lending based on factors such as race, gender, or marital status. None of these laws specifically address the requirement for providing a good faith estimate and special booklet, making them incorrect choices for this question.