In Texas, when a buyer purchases a home using an FHA loan, who is the insurer of the loan?
Correct Answer
A) The Federal Housing Administration, a division of HUD
The Federal Housing Administration (FHA), which operates under the U.S. Department of Housing and Urban Development (HUD), insures FHA loans. FHA does not originate loans — it provides mortgage insurance to approved lenders to reduce their risk.
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RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
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