Final answer:
Section 6 of RESPA pertains to mortgage servicing, requiring servicers to properly disclose information and correct errors on mortgage loans. It aims to protect borrowers from discriminatory practices and ensures servicers' compliance with various consumer protection laws.
Step-by-step explanation:
Section 6 of the Real Estate Settlement Procedures Act (RESPA) addresses the rights of borrowers in relation to mortgage servicing and specifically deals with the transfer, handling, and the correction of errors on mortgage loans. It requires servicers to provide disclosures to borrowers about their loan, including any changes in the servicing of the loan. Furthermore, RESPA ensures that servicers do not engage in practices that violate consumer protection laws, such as discrimination based on age, race, sex, or marital status. In addition to RESPA, the Federal Reserve (the Fed) is also tasked with ensuring that banks adhere to these consumer protection laws, including the requirement for public disclosure of information regarding home loans and their distribution by demographic factors.
Lenders are also required to comply with government monitoring for certain types of loans to ensure adherence to equal credit opportunity, fair housing, and home mortgage disclosure laws. This involves collecting information on the ethnicity, race, and sex of loan applicants to monitor for discrimination.