☑️ Chapter 13: Selected Consumer Protection Regulations

Question 1

Real Estate Settlement Procedures Act (RESPA):
Mortgage Servicing:
As you learned earlier, RESPA is a consumer protection law that includes provisions to prohibit certain practices.
The Consumer Financial Protection Bureau (CFPB) released its final rules on mortgage loan _____ on January 17, 2013 and amended them in August 2016.
The August 2016 amendment provided additional benefits for small servicers along with changes and new requirements dealing with SUCCESSORS in interest, borrowers in BANKRUPTCY, FORCE-placed insurance, expanded loss MITIGATION requirements, TRANSFERS of servicing, and clarification on the definition of delinquency. Those 2016 amendments became effective in 2018.
These mortgage servicing rules apply to entities that service consumer ______ lien mortgage loans. The rules apply equally to entities servicing their own portfolios and those servicing loans sold into the secondary market.
The rules do NOT include: REVERSE mortgages, BRIDGE loans, CONSTRUCTION loans, loans for BUSINESS purposes, or loans secured by agricultural property by lenders qualified under the ______ Act.

Answer 1

A. servicing
B. first
C. Farm Credit Act

Question 2

Real Estate Settlement Procedures Act (RESPA):
Interest Rate Adjustment:
Notices for ARMs:
Mortgage servicers who service ARM loans must send a notice of _________ rate adjustment to the borrower _____ - _____ days prior to the first adjustment and ________ adjustment notices _____ - _____ days prior those adjustment dates. If an interest rate change does not result in a payment change, then NO notice is required.

Answer 2

A. First
B. 210-240 Days
C. Subsequent
D. 60-120 Days

Question 3

Real Estate Settlement Procedures Act (RESPA):
Crediting Payments and
Providing Payoff Statements:
Mortgage servicers must PROMPTLY credit mortgage payments when received.
To that end, SERVICERS must:
• give a borrower CREDIT for the FULL payment as of the DAY the payment is ______.
• when a ______ payment is made, HOLD the partial payments in a special _______ account (the servicer must disclose this on the monthly statement). When that special account collects ENOUGH money to make a FULL payment of principal, interest, and any escrow, the servicer must ____ that payment to the borrower’s account.
• provide an accurate payoff balance within ______
business days of receipt of the request.

Answer 3

A. received
B. partial
C. suspense
D. credit
E. seven (7)

Question 4

Real Estate Settlement Procedures Act (RESPA):
Force-Placed Insurance:
When a homeowner fails to keep his home insured, the lender has the right to buy and charge for insurance to cover the lender’s INTEREST in the home. This insurance is called _____ insurance. This insurance is usually expensive than a regular homeowner insurance policy, and it generally only protects the LENDERS interests, NOT the homeowner’s, like personal possessions.
The rule says the servicer must:
• Provide a first notice to the homeowner at least ____ days before the lender charges for a force-placed insurance policy.
• Provide a second notice at least _____ days later and at least 15 days PRIOR to charging the borrower if the borrower still has NOT provided proof of purchasing the needed insurance.
• Cancel force-placed coverage and ______ premiums paid during periods of overlapping coverage.
• Continue to accept the existing insurance policy, rather than buy force-placed insurance, IF there is an ______ account from which the servicer pays the insurance bill.
• Bill the homeowner ONLY the ____ cost of the force-placed insurance coverage.

Answer 4

A. force-placed
B. more
C. 45 Days
D. 30 Days
E. 15 Days
F. refund
G. escrow/impound
H. bona fide

Question 5

Real Estate Settlement Procedures Act (RESPA):
General Servicing Policies, Procedures and Requirements:
Mortgage servicers MUST set up their business and adopt policies and procedures designed to:
> Provide timely and accurate information about a borrower’s ______, including:
• DISCLOSURES to the borrower;
• Investigating and responding to borrower COMPLAINTS and correcting errors;
• Information and documents to BORROWERS;
• Information and documents to mortgage owners and ASSIGNEES;
• Documents or filings for FORECLOSURE processes;
and
• Working with SUCESSORS in interest upon death of a borrower.

Answer 5

A. loan

Question 6

Real Estate Settlement Procedures Act (RESPA):
Requests For Information:
Mortgage servicers must set up their business and adopt policies and procedures designed to:
> Properly evaluate loss _______ applications by:
• Providing borrowers accurate information about available LOSS mitigation options;
• Providing ACCESS to all documentation needed to evaluate loss mitigation;
• Identifying documents and information borrower needs to complete loss mitigation APPLICATION;
• Properly EVALUATING a borrower’s application for loss mitigation.

Answer 6

A. mitigation

Question 7

Real Estate Settlement Procedures Act (RESPA):
General Servicing Policies, Procedures and Requirements:
Mortgage servicers must set up their business and adopt policies and procedures designed to:
>Facilitate _____ and compliance by:
• Providing appropriate personnel access to documents and information to audit COMPLIANCE;
• Performing PERIODIC reviews
• Sharing information regarding loss mitigation and foreclosure STATUSES.

Answer 7

A. oversight

Question 8

Real Estate Settlement Procedures Act (RESPA):
General Servicing Policies, Procedures and Requirements:
Mortgage servicers must set up their business and adopt policies and procedures designed to:
> Facilitate transfer of information during servicing _______ by:
• As ______, transferring all information and documents in its control to transferee; and
• As ______, identifying and requesting any necessary information that was NOT transferred.

Answer 8

A. transfers
B. transferor
C. transferee

Question 9

Real Estate Settlement Procedures Act (RESPA):
General Servicing Policies, Procedures and Requirements:
Mortgage servicers must set up their business and adopt policies and procedures designed to:
> Keep records for at least ____ year after a mortgage loan is DISCHARGED or TRANSFERRED.

Answer 9

A. ONE

Question 10

Real Estate Settlement Procedures Act (RESPA):
General Servicing Policies, Procedures and Requirements:
Mortgage servicers must set up their business and adopt policies and procedures designed to:
> INFORM borrowers of WRITTEN _____ resolution and information REQUEST policies

Answer 10

A. error

Question 11

Real Estate Settlement Procedures Act (RESPA):
General Servicing Policies, Procedures and Requirements:
Mortgage servicers must set up their business and adopt policies and procedures designed to:
> Keep a _______ file for ALL loans, which includes:
• Schedule of transactions credited or debited to the account (including ESCROW);
• Copy of security instrument ESTABLISHING lien;
• Notes created by servicer reflecting COMMUNICATIONS with the borrower;
COPIES of any information or documents provided by the borrower.

Answer 11

A. servicing

Question 12

Real Estate Settlement Procedures Act (RESPA):
Early Intervention:
Part of the amendment to Regulation X implemented rules regarding home foreclosures and requests for modifications. A mortgage servicer is required to:
• Try to establish CONTACT with a delinquent borrower NO later than ______ days after a MISSED mortgage payment.
• Provide delinquent borrowers a WRITTEN notice within _____ days after a MISSED payment, which encourages contact with the servicer about LOSS mitigation options that may be available to the borrower.
NOTE: Exemptions exits to these requirements for
borrowers in bankruptcy and those borrowers invoking their right not to be contacted under Fair Debt Collection Practices Act section 805(c).

Answer 12

A. 36 Days
B. 45 Days

Question 13

Real Estate Settlement Procedures Act (RESPA):
Loss Mitigation:
If a borrower is experiencing DIFFICULTY making payments, he can apply to the mortgage servicer for assistance in a loss mitigation or loan WORKOUT, which involves establishing NEW payment terms that are mutually agreed upon between the lender and delinquent borrower to get payments BACK on schedule.
1. The borrower is required to submit an application and supporting ______ for help.
2. The lender, upon receipt of the application, has a _____-day window window to acknowledge receipt and request additional information from the borrower.
3. Within _____ days after submission of a complete loan workout application, received at least 37 days prior to a foreclosure sale, the mortgage servicer must inform the borrower if there is an option to save the home.

Answer 13

A. Documentation
B. 5 Day
C. 30 Days

Question 14

Real Estate Settlement Procedures Act (RESPA):
Loss Mitigation:
After a loan workout request is received, one of the following will take place:
1. The servicer decides a borrower does NOT qualify for a loan workout and MUST provide a WRITTEN decision including the ______ for denial
2. The borrower REJECTS the workout options that are offered by the mortgage servicer, or
3. Borrower is offered and accepts an option that includes retention of the home also known as _______ or non-retention of the home _______.
If BOTH parties agree to the conditions, the NEW terms are implemented. Many times, there is a ______ period before the new terms become _______.

Answer 14

A. reasons
B. modification
C. short sale
D. trial
E. permanent

Question 15

Real Estate Settlement Procedures Act (RESPA):
Loss Mitigation:
If a borrower submits an loss mitigation or loan workout application for assistance at least days prior to a foreclosure sale, the borrower may seek an independent review (appeal) of the mortgage servicer’s workout decision. The servicer may not commence any action during this 90-day timeframe.
If a borrower has not submitted an application for assistance, a mortgage servicer MUST wait _______ days before he is ALLOWED to file for foreclosure or ____ sale.
NOTE: If the foreclosure has commenced, the borrower may still have an opportunity to apply for a loan workout. If a borrower submits an application for assistance more than ______ days PRIOR to the scheduled foreclosure sale, the loan servicer generally must address the request for ______ BEFORE proceeding with the REPOSSESSION of the security.

Answer 15

A. 90 days
B. 120 days
C. trustee’s
D. 37 Days
E. help

Question 16

Real Estate Settlement Procedures Act (RESPA):
Loss Mitigation:
_______ is the term used when servicers move forward on a _____ at the SAME time the mortgage servicer is working with a borrower on a _______ plan. Many consumers have discovered too late in the loan modification process that the lender had CLOSED on a foreclosure sale during the MODIFICATION process. A foreclosure is NOT allowed unless all ______ to foreclosure have been pursued.

Answer 16

A. DUAL TRACKING
B. foreclosure
C. workout
D. alternatives

Question 17

Mortgage Assistance
Relief Services (MARS):
________ implements rules to address mortgage relief SCAMS, which take advantage of DISTRESSED homeowners. The MARS administration is under _____ authority. The following are part of the provisions of the ____ Rule under Regulation O.
• Ban on mortgage foreclosure RESCUE and loan modification servicers from collecting FEES UNTIL after homeowners have a written offer from their lender or servicer that they decide is ACCEPTABLE
• Requirement that mortgage relief companies DISCLOSE key information to consumers (e.g., company’s fee, the fact that the company is NOT associated with the government, that the consumer has the right to DISCONTINUE doing business with the company at any time) to protect consumers from being misled and to help them make better-informed purchasing decisions.
• Prohibition against making any false or MISLEADING claims about their mortgage relief services; for example, any GUARANTEES or the amount of money consumers will save
• PROHIBITION barring mortgage relief companies from advising consumers to DISCONTINUE communication with their lenders
• Requirement to retain certain records for at least _______ years from the date documents are created, generated, or received

Answer 17

A. Mortgage Assistance Relief Services (MARS)
B. Final Rule
C. CFPB
D. Regulation O
E. two

Question 18

Federal Trade Commission: Safeguards Rule:
The FTC adopted the ______ Rule to PROTECT the security, confidentiality, and integrity of customer information by establishing STANDARDS for developing, implementing, and maintaining reasonable administrative, technical, and physical safeguards.
The regulation applies to individuals or organizations that are significantly engaged in providing ______ products or services to consumers.

Answer 18

A. Safeguards
B. financial

Question 19

Federal Trade Commission: Safeguards Rule:
Provisions:
The following standards for protecting customer INFORMATION are stated in federal regulations:
(a) _________: You shall develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards that are appropriate to your size and complexity, the nature and scope of vour activities, and the sensitivity of any customer information at issue.
Such safeguards shall include the elements set forth in $314.4 and shall be reasonably designed to achieve the objectives of this part, as set forth in paragraph (b) of this section.
(b) _________: The objectives of section 501(b) of the Act, and of this part, are to:
(1) Insure the security and confidentiality of customer information;
(2) Protect against any ANTICIPATED threats or hazards to the security or integrity of such information; and
(3) Protect against UNAUTHORIZED access to or use of such information that could result in substantial harm or inconvenience to any customer:

Answer 19

A. Information security program
B. Objectives.

Question 20

Federal Trade Commission: Safeguards Rule:
Provisions:
The FTC has recently proposed additional protections, including:
• _______ of all consumer data,
• Implementing access controls to PREVENT unauthorized users from accessing consumer information,
• Implementing MULTI-FACTOR authentication to access consumer data, and
• Requiring periodic reports submitted to the boards of directors to ensure COMPLIANCE.

Answer 20

A. Encryption

Question 21

Federal Trade Commission: Safeguards Rule:
Definition of Consumer and Customer:
The following information describing consumers and customers is stated in federal regulations.
A “_______” is an individual who obtains or has obtained a financial product or service from a financial institution that is to be used primarily for personal, family, or household purposes, or that individual’s legal representative.

A “________” is a consumer who has a “customer relationship” with a financial institution. A “________” is a continuing relationship with a consumer:

Answer 21

A. consumer
B. customer
C. customer relationship

Question 22

Federal Trade Commission: Safeguards Rule:
Definition of Consumer and Customer:
Examples of _______ a Customer Relationship:
• OPENING a credit card account with a financial institution
• Entering into an automobile LEASE (on a non-operating basis for an initial lease term of at least ______ days) with an automobile dealer
• Providing personally IDENTIFIABLE financial information to a broker in order to obtain a mortgage loan
• OBTAINING a loan from a mortgage lender
• AGREEING to obtain tax preparation or credit counseling services

Answer 22

A. Establishing
B. 90 days

Question 23

Federal Trade Commission: Safeguards Rule:
Definition of Consumer and Customer:
“_______” for Loans:
• The customer relationship _____ with ownership of the servicing rights.
• A financial institution establishes a customer relationship with a consumer when it _______ a
loan.
• If it SUBSEQUENTLY sells the loan and RETAINS the servicing rights, it ______ to have a customer relationship with the consumer.
• If it subsequently TRANSFERS the servicing rights, the entity that ACQUIRES servicing has a _____ relationship with the consumer.
• Those with an ownership interest in the loan but WITHOUT servicing rights have _______.

Answer 23

A. Special Rule
B. travels
C. originates
D. continues
E. customer
F. consumers

Question 24

Department of the Treasury: Bank Secrecy Act (BSA):
The ______ REQUIRES financial institutions to maintain appropriate records and file reports for use in criminal, tax, or ______ investigations or proceedings. Originally, the Act targeted CRIMINAL activities, such as money LAUNDERING and income tax EVASION . It is also used to investigate financial transactions related to potential TERRORIST activities. The regulation is issued by the _______.
NOTE: Under Treasury Department definitions, financial institutions include a variety of entities such as banks, securities dealers, money services businesses, CASINOS, commodities brokers, MUTUAL funds, or persons under supervision of any state or federal bank supervisory authority.

Answer 24

A. Bank Secrecy Act (BSA)
B. regulatory
B. Department of the Treasury

Question 25

Department of the Treasury: Bank Secrecy Act (BSA):
The BSA consists of two parts:
• Title I -
___________ : Requires INSURED financial institutions to maintain certain records.
• Title II -
________: Requires reporting of certain transactions greater than ________ by and through financial institutions into, out of, and within the United States.

Answer 25

A. Financial Recordkeeping
B. Reports of Currency and Foreign Transactions
C. $10,000

Question 26

Department of the Treasury: Bank Secrecy Act (BSA):
Application to Banking/ Mortgage Industry:
The following information describing the purpose and scope of Suspicious Activity Reports (SARs) is stated in federal regulations

Purpose and Scope:
The purpose of this part is to ensure that an INSURED state nonmember bank files a _____ when it detects a known or suspected criminal violation of federal law or a susbicious transaction related to a monev laundering activity or a violation of the ______. This part applies to all insured state nonmember banks as well as any insured, state-licensed branches of foreign banks.

Answer 26

A. Suspicious Activity Report
B. Bank Secrecy Act

Question 27

Department of the Treasury: Bank Secrecy Act (BSA):
Requirements for Reporting:
The reporting and ________ provisions of the Bank Secrecy Act apply to depository institutions and other money service businesses (referred to as “non-banks”). ______are commonly referred to as “MSBs”. MSBs that are REQUIRED to register must prepare a LIST of their AGENTS every ______.
Reports and Records:
(a) Suspicious activity reports required. A bank shall file a suspicious activity report with the appropriate federal law enforcement agencies and the Department of the Treasury, in accordance with the form’s instructions, by sending a completed suspicious activity report to _____ in the following circumstances:
(1) INSIDER abuse involving any amount.
(2) Transactions aggregating $_____ or more where a suspect can be IDENTIFIED.
(3) Transactions aggregating $_______ or more REGARDLESS of potential suspects.
(4) Transactions aggregating $________ or more that involve potential money LAUNDERING or violations of the Bank Secrecy Act.

Answer 27

A. recordkeeping
B. Money service business MSB
C. January 1st
D. FinCEN
E. $5,000
F. $25,000
G. $5,000

Question 28

The USA PATRIOT Act:
Bank Secrecy Act (BSA):
Requirements for Reporting:
The USA PATRIOT Act placed these additional recordkeeping requirements on many financial institutions, requiring them to RECORD the total amounts of _____ processed worldwide in areas where money laundering is a concern for the United States and where it is prevalent in that particular country. The Act also fostered the sharing of certain information between financial institutions to prevent undetected money laundering. Requirements for increased client identification measures were also required and implemented by the USA PATRIOT Act.

Answer 28

A. Cash

Question 29

Bank Secrecy Act (BSA):
What is “Suspicious Activity?”:
Suspicious activity is any conducted or attempted transaction or pattern of transactions that you know, suspect, or have reason to suspect, meets any of the following conditions:
• Involves money from CRIMINAL activity.
• Is designed to EVADE Bank Secrecy Act requirements, whether through STRUCTURING or other means.
• Appears to serve NO business or other LEGAL purpose and for which available facts provide NO reasonable explanation.
• Involves use of a ______ MSB to FACILITATE criminal activity.
> Examples of Possible Suspicious Activity:
1. A customer uses a false ID or multiple IDs on DIFFERENT occasions (name, address, or identification number may be different).
2. Two or more customers use the SAME or similar IDs (photo or name may be different).

Answer 29

A. money services business

Question 30

Bank Secrecy Act (BSA): Reporting Suspicious Activity Reports:
1. A SAR must be filed within _____ days of detection of the suspicious transaction, although some activity may require an ______ reporting action.
2. It is ILLEGAL to tell ANY person involved in a transaction that a ____ has been filed. Maintaining the confidentiality of SARs prevents suspected individuals involved in criminal activity from STRUCTURING their activity to EVADE detection by law enforcement.
3. If an MSB determines that a Suspicious Activity Report should be filed, a SAR must be filed and a copy of the SAR retained for a minimum of ____ years.

Answer 30

A. 30 days
B. immediate
C. SAR
D. five (5) years

Question 31

Bank Secrecy Act (BSA):
How to Report Suspicious Activity:
1. Record relevant information on a Suspicious Activity Report by MSB also called the _____form, available at www.msb. gov or by calling the IRS Forms Distribution Center: 1-800-829-3676.
2. Submit the completed SAR to:
Detroit Computing Center
Attn: SAR-MSB
P.O. Box 33117
Detroit, MI 48232-5980
3. Keep a copy of the report and any supporting documentation for _____ years from the date of filing the report.

Answer 31

A. SAR-MSB
B. five

Question 32

Bank Secrecy Act (BSA): Additional Resources to Prevent Money Laundering:
There are numerous resources that provide guidance for anti-money laundering laws. A loan originator can learn more about SARs and FinCen at https://www.fincen.gov/. The Office of Foreign Assets Control issues the _______, which identifies the assets of targeted countries, terrorists, drug cartels, and other specially designated persons.

Answer 32

A. Specially Designated Nationals and Blocked Entities List (SDN List)

Question 33

Financial Industry Regulatory Authority (FINRA):
The USA Patriot Act:
Financial Crimes Enforcement Network (FinCEN):
Anti-Money Laundering (AML):
______ is the process of CONCEALING illicit sources of money to make it appear to be LEGITIMATE money. Therefore, anti-money laundering activities are practices/regulations adopted by government and financial entities to PREVENT or CONTROL money laundering.

Answer 33

A. Money laundering

Question 34

Financial Industry Regulatory Authority (FINRA):
The USA Patriot Act:
Financial Crimes Enforcement Network (FinCEN):
Anti-Money Laundering (AML):
All MSBs are required to DEVELOP and IMPLEMENT an Anti-Money Laundering (BSA/AML) ______ Program, as required by Section _____ of the USA PATRIOT Act and implemented at 31 CFR 1022.210:
• MSBs should file all BSA reports in an accurate and timely manner.
• All BSA reports must be retained for a period of five years and must be filed or stored in such a way as to be accessible within a reasonable period of time.
• The MSB should maintain records for the required time period and establish and maintain compliance programs.

Answer 34

A. Compliance
B. Section 352

Question 35

Financial Industry Regulatory Authority (FINRA):
The USA Patriot Act:
Financial Crimes Enforcement Network (FinCEN):
Anti-Money Laundering (AML): AML Information:
Money laundering involves three steps in this ORDER:
1. ________: Illegitimate funds are FURTIVELY introduced into the legitimate financial system.
2. _______: Money is moved around to create CONFUSION , sometimes by wiring or transferring through NUMEROUS accounts.
3. ________: The money is INTEGRATED into the financial system through additional transactions until the “DIRTY money” appears “CLEAN.”
Money laundering can facilitate crimes such as DRUG trafficking and TERRORISM, and can adversely impact the global economy.
In its MISSION to “safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity,” the ______ acts as the designated administrator of the BSA. Since its creation, numerous other laws have enhanced and amended the BSA to provide law enforcement and regulatory agencies with the most effective tools to combat money laundering.

Answer 35

A. Placement
B. Layering
C. Integration
D. FinCEN

Question 36

Financial Industry Regulatory Authority (FINRA):
The USA Patriot Act:
Financial Crimes Enforcement Network (FinCEN):
Anti-Money Laundering (AML): AML Information:
_____ that may indicate that an MSB has been a party to criminal activity may include:
• Customer provides false or FRAUDULENT identification
• TWO or more customers use similar identification
• Customer ALTERS the transaction when learning that he must provide identification
• Customer ALTERS the SPELLING or order of his last name to avoid DETECTION
The website of FinCEN provides valuable resources on anti-money laundering laws, red flags, reporting, and compliance programs.

Answer 36

A. Red flags

Question 37

Study HINT:
Financial Industry Regulatory Authority (FINRA):
The USA Patriot Act:
Financial Crimes Enforcement Network (FinCEN):
Anti-Money Laundering (AML):
Money Laundering:
>Why Are You Required to Keep Records and File Reports?
Every year, money launderers try to cover up the illegal source of their money by funneling hundreds of millions of dollars through financial institutions, including money services businesses. Money laundering is most likely to be successful when criminals AVOID leaving a “______” of transactions linking the money back to their crime.
Law enforcement can follow the “paper trail” created from reports and records of financial institutions. By following federal recordkeeping and reporting requirements, financial institutions can help law enforcement prevent criminals from getting away with - and profiting from - their crimes.

Answer 37

A. paper trail

Question 38

Chapter Summary: A mortgage _______ is defined as the ongoing relationship with a mortgage borrower and the entity that accepts the borrower’s payments, pays taxes and insurance (if escrowed), and works with the borrower in the event of loan default. A mortgage servicer MUST provide the borrower a _____ statement giving the borrower information on details of the payments she makes and other items. Mortgage servicing is regulated by _______, Section _____. Payments must be posted PROMPTLY when received. If there is a ______ in the homeowner’s insurance coverage, servicers may purchase ______ insurance, but must alert a homeowner at least _____ days before it charges for a force-placed insurance policy and remind the owner again at least ____ days later if he still hasn’t provided proof of purchasing the needed insurance prior to billing the borrower. Servicers must WAIT at least _____ days after the reminder notice before assessing the charge. If a borrower misses a payment, a servicer is required to contact her within _____ days of the missed payment. Workout options must be presented within ______ days of the missed payment. A mortgage servicer must wait _____ days after the date of default before taking legal action to repossess the security for the loan.

Answer 38

A. servicer
B. monthly
C. RESPA, Section 10
D. lapse
E. force-placed
F. 45 days
G. 30 days
H. 15 days
I. 36 days
J. 45 days
K. 120 days

Question 39

Chapter Summary: The _____ regulation PROHIBITS the collection of advance fees, making a FALSE or misleading statement about services, or advising clients to DISCONTINUE communication with the current lender. In addition, it requires servicers to disclose key information to consumers.
NO FEE may be accepted until a _____ modification is delivered in writing to the borrower and accepted.

Answer 39

A. Mortgage Assistance Relief Services
B. trial

Question 40

Chapter Summary: The ______ protect the security, confidentiality, and integrity of customer information. A ______ is an individual who obtained a product or service from a financial institution, such as a mortgage loan where the servicing is RELEASED to ANOTHER entity. A _____ is a consumer who has an ONGOING relationship with a financial institution.

Answer 40

A. FTC Safeguards Rule
B. consumer
C. customer

Question 41

Chapter Summary: The _______ requires financial institutions to maintain appropriate records and file reports for investigations or proceedings. The regulation is issued by the Treasury Department. There are two parts to the BSA: _____ and ______.

Answer 41

A. Bank Secrecy Act
B. Financial record keeping
C. Reports of currency and foreign transactions

Question 42

Chapter Summary: ______ is the process of concealing illicit sources of money in a transaction to make it appear legitimate. The Anti-Money Laundering regulations PROHIBIT this process.

Answer 42

A. Money laundering

Question 43

Real Estate Settlement Procedures Act (RESPA):
Periodic Billing Statement:
Mortgage servicers, creditors, and assignees are REQUIRED to provide a MONTHLY billing statement to borrowers that detail:
• Amount DUE and how much will be APPLIED to principal, interest, and escrow, including sums for any fees, charges, and past due payments;
• Due DATE for payment;
• LATE fee information;
• If the mortgage loan has MULTIPLE payment options, the statement must show whether the principal balance will increase, decrease, or stay the same for each option listed;
• Payments made since the LAST statement;
• How previous payments were APPLIED;
• Transaction ACTIVITY(including any fees or charges to the borrower’s account);
• Certain messages, such as detail on the application of PARTIAL payments or funds HELD in a ______ account;
• Contact information for the borrower’s SERVICER;
• Current PRINCIPAL balance;
• Current INTEREST rate;
• Next interest rate ______ date (if applicable);
• How to contact a housing COUNSELOR for help;
• Late PAYMENT information (if delinquent on payments); and
• Special REQUIREMENTS for borrowers in bankruptcy (as applicable).
NOTE: The 2016 amendments made clear that small servicers services ______ or fewer consumer mortgages, which they or an affiliate own or originated) are EXEMPT from most of these periodic statement provisions.

Answer 43

A. $5000
B. Suspense
C. Change

Question 44

Real Estate Settlement Procedures Act (RESPA): Requests for Information:
Servicers are required to correct errors, provide borrower-requested information, or explain in ______ the reason the creditor feels that NO errors were made.
An example of a mortgage servicer ____ may include:
• Failure to apply a PAYMENT correctly
• Charging IMPROPER fees
• Starting a foreclosure sale in VIOLATION of regulations
• Making an error in the SERVICING of a mortgage loan
• Failing to properly CREDIT a PAYMENT when PROOF of receipt is provided

Answer 44

A. Writing
B. error

Question 45

Real Estate Settlement Procedures Act (RESPA): Requests for Information:
Some other requirements for BOTH borrowers and servicers are:
• Information requests from the borrower must be in WRITING and MUST include: the NAME of the borrower, information that enables identification of the loan ACCOUNT, and states the information being requested relating to that account.
• Servicers may establish an ADDRESS to be used for information requests and MUST inform BORROWERS of the address.
• Servicers MUST provide a WRITTEN response, acknowledging receipt, within ___ business days of receiving a information request from the borrower.
• Servicers MUST provide the requested information or, after conducting a reasonable search, inform the borrower that the information is _______. In either case the response MUST be accompanied by a telephone NUMBER for further assistance.
• A mortgage servicer MUST quickly respond to consumer requests for information in writing within _____ business days. That time limit may be EXTENDED by an additional _____ business days, when necessary.
Requests for the identity or contact information of the owner or assignee of the mortgage loan must be complied within _____ business days with NO extensions allowed.

Answer 45

A. 5
B. unavailable
C. 30
D. 15
E. 10

Question 46

Real Estate Settlement Procedures Act (RESPA): Requests for Information:
> Servicer’s are NOT required to provide information or respond to requests for:
• DUPLICATE of previously provided information,
• confidential, PROPRIETARY or privileged information
• irrelevant information
overly broad or unduly BURDENSOME requests
• UNTIMELY requests made more than _____ year after discharge or transfer
• Servicers may _____ charge a fee for responding to requests for information

Answer 46

A. one
B. not

Question 47

Vocabulary: The term used when servicers move forward on a foreclosure at the same time the mortgage servicer is working with a borrower on a workout plan.

Answer 47

A. Dual Tracking

Question 48

Vocabulary: Hazard insurance that is obtained by the lender when the borrower fails to maintain such coverage for the subject property.

Answer 48

A Force-Placed Insurance

Question 49

Vocabulary: The establishment of new payment terms that are mutually agreed upon between the lender and the delinquent borrower to get payments back on schedule.

Answer 49

A. Loan Workout

Question 50

Vocabulary: The process of concealing illicit sources of money to make it appear to be coming from a legitimate source.

Answer 50

A. Money Laundering

Question 51

Vocabulary: The ongoing relationship between a borrower, the mortgagee, and the entity that accepts the borrower’s payments, remits payments to the mortgagee, pays taxes and insurance (if escrowed), and works with the borrower in the event of loan default.

Answer 51

A Mortgage Servicing