Chapter 4 LE Continued, Taking applications, & ECOA

Question 1

Under ECOA a MLO cannot ask about marital status except if?

Answer 1

-The non-applicant spouse is an authorized user or co-borrower
-The non-applicant spouse will be contractually liable
-If the applicant is relying on spouses’ income
-If the borrowers live in a community property state or the applicant is relying on income like child support or alimony

Question 2

Under ECOA how soon after any action is taken on an application should the lender notify the borrower?

Answer 2

Within 30 days

Question 3

What are the 2 exceptions for notifying a consumer within 30 days with an Adverse Action Notice?

Answer 3

-The lender must notify the applicant of adverse action within 90 days after making a counteroffer (unless the applicant accepted or uses the credit during that time.)
-The lender may not have to notify the applicant of adverse action if the application was incomplete, and the lender sent the applicant notice that the application was incomplete.

Question 4

Per FCRA an Adverse Action Notice is required to be delivered only when the reason for the denial pertains to the consumer’s…

Answer 4

Credit

Question 5

What are the 2 actions an MLO can take after receiving an incomplete application?

Answer 5

-Acting and following the timing requirements for an adverse action notice.
-Not taking any action and providing a Notice of Incompleteness to the borrower.

Either must take place within 30 days and the application cannot just sit. The MLO must notify the borrower that the application is incomplete.

Question 6

ECOA Valuations Rule

Answer 6

Requires the lender to notify the borrower within 3 business days of application of their right to receive a copy of the appraisal. The borrower must promptly send a copy upon completion but no less than 3 business days before consummation.

Question 7

Usually, a mortgage payment is considered late if it is more than ____ days past due. What is the late fee for most loans? What is the late fee for government and high-cost loans?

Answer 7

15 days,

5% of monthly principal and interest

4% for government and high cost loans

Question 8

A borrower is not obligated on any mortgage loan until they sign the…

Answer 8

Closing documents including the Note and Deed of Trust (Mortgage)

Question 9

Loan Estimate Page Summary

Answer 9

Page 1: Main Summary Page of Key Loan Items.
Payment & Breakdown, Rate, Loan
Amount, CC Total
Page 2: Closing Cost Details
Page 3: Comparison, APR, TIL