Florida Broker Practice Exam

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Prepare for the Florida Broker Exam. Study with interactive quizzes, flashcards, and multiple choice questions that include hints and explanations. Ace your exam and start your real estate career today!

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What is the requirement regarding escrow accounts under RESPA?

Lenders can require unlimited fees
Lenders must provide an initial escrow statement
No escrow accounts are required
Escrow accounts can only be set up for mortgages

The correct answer is: Lenders must provide an initial escrow statement

Under the Real Estate Settlement Procedures Act (RESPA), one key requirement is that lenders must provide an initial escrow statement to borrowers. This statement is essential because it provides transparency regarding the amounts that will be collected for escrow and outlines how those funds will be used, such as for property taxes and insurance. Providing this detailed accounting helps borrowers understand their financial obligations and prevents any surprise fees or mismanagement of the funds throughout the life of the loan. It is meant to promote fair lending practices and protect consumers by ensuring they have all the necessary information related to their escrow accounts right from the beginning. The other options do not align with RESPA guidelines, as there are caps on fees that lenders can charge, not just related to escrow accounts, and while it is possible to have no escrow account, it is not a requirement that all loans must have one. Moreover, escrow accounts are not limited solely to mortgages; they can also be used in other contexts related to real estate transactions.