Chapter 4 Flashcards
Explain truth in lending act and real estate settlement act, describe settlement charges, explain components of the loan estimate and closing disclosure forms
Federal law in place to help buyers compare the loan fees and other charges
Truth in lending act
The truth in lending act is implemented by
Regulation z
Regulation z applies to all loans secured by a residence but doesn’t apply to
Commercial loans
Agricultural loans over $25,000
The provisions of reg z cover
Disclosure of costs
Right to rescind the transaction
Advertising offers
Non-compliance penalties
What is the penalty for violation of the advertising of reg z
Twice the amount of the finance charge or a minimum of $100, up to a Max of $1000.
Also liable for court costs, attorney fees and any actual damages
Requires that the parties to certain transactions receive the correct figures pertaining to their closing costs
Real estate settlement and procedures act
RESPA applies to purchases:
Residential property
Involving first or second mortgages
Financed by a federally related loan (VA, FHA, HUD)
RESPAS TRID rule applies to what type of purchases
Any closed end loan secured by real property including unimproved property
What items are comment for the buyer to pay
Mortgage recording fees. Title insurance Appraisal fees Credit fees Survey Loan organization Attorney fees Homeowners insurance Reserved deposited with the lender, such as insurance, taxes, assessments Private mortgage insurance
What are items a seller usually pays
Brokers commission
Title fees
Fees for preparing deed
Attorney fees
What do you call items that the seller has invited but have not been paid and how will they be handled on the settlement statement
These items are paid on arrears. The buyer will get a credit and the seller will get a debit
When is the creditors generally required to provide the loan estimate
Within 3 days of the receipt of the consumers loan application
Which of the following is not an item that a buyer usually pays for at closing?
Fee for clearing a title
Mortgage recording fees
Homeowners insurance
Title insurance policy
Fee for clearing a title
RESPA covers loans secured with a mortgage placed on which of the following?
Commercial property
Industrial property
A one to four family residential property
Property financed by the seller
A one to four family residential property
Amounts collected by the lender and held in a trust or. Impound account for future payment are called what
Advances
Impounds
Trust fund
Reserves
Reserves
Which of the following items are paid in arrears
Taxes and insurances
Rents and interest
Taxes and interest
Rents and insurance
Taxes and interest
Which of the following statements best describes the term consummation as defined by reg z
The time that a consumer becomes contractually obligated on a credit transaction
The window of time a consumer has to accept or reject a credit transaction
The amount of time a mortgage loan is viable
Three business days prior to acceptance of the loan
The time that a consumer becomes contractually obligated on a credit transaction
What does a demand feature mean in mortgage loan
Would not allow the lender to require early repayment
Would allow the lender to require early repayment
Would allow the borrower to make an early repayment with a penalty
Would allow the borrower to shorten the life of the loan by making double monthly payments
A demand feature would allow the lender to require an early repayment
