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Chapter One > Concept of Mortgage Lending > Flashcards

Concept of Mortgage Lending Flashcards

1
Q

What does RESPA stand for?

A

Real Estate Settlement Procedures Act

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2
Q

What agency enforces RESPA?

A

CFPB- Consumer Financial Protection Bureau

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3
Q

What are the 3 purposes of RESPA?

A

1- PROTECT CONSUMERS BECOME BETTER EDUCATED IN SHOPPING FOR SERVICES
2-PROTECT CONSUMERS FROM UNEARNED FEES, KICKBACKS, REFERRALS
3-PROTECT CONSUMERS BY LIMITING THE AMOUNTS THE HOMEBUYER PUTS IN ESCROW

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4
Q

CFPB AND RESPA are under what regulation?

A

REGULATION X

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5
Q

What are the 6 items that complete an application?

A

Name
Social Security number
Monthly Income
Loan Amount
Estimated Property Value
Property Address- this triggers day one of your 3-day disclosure period

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6
Q

A creditor must deliver Disclosures to the borrower within how many days?

A

three business days of receipt of application

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7
Q

RESPA defines a business day as?

A

a business day as any day on which the offices of the business entity are open to the
public for carrying on substantially all of the entity’s business functions.

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8
Q

Special Information Booklet
SECTION 5 OF RESPA was published to help who?

A

is published by the Bureau to help consumers applying for
federally related mortgage loans understand real estate transactions.

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9
Q

The special information booklets are not required for?

A

Refinance Transactions

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10
Q

What does the LE stand for?

A

Loan Estimate

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11
Q

Define Closing Cost

A

The expenses incurred and paid at the time of settlement in the transfering of property

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12
Q

What is ECOA stand for?

A

Equal Credit Opportunity Act

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13
Q

How many sections of RESPA impact and guide the mortgage industry in protecting borrowers from abusive practices?

A

4 Sections of RESPA - be able to identity each section
Section 6- definition? Mortgage Servicing
Section 8- definition? Prohibits Kickbacks and referral
Section 9- definition?
Section 10- definition? Limits on Escrow

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14
Q

The ____________ was created in 1933 to Insure consumer deposits.

A

FDIC Federal Deposit Insurance Coporation

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15
Q

Do FHA loans have mortgage insurance for the life of the loan
True or False?

A

True

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16
Q

FHA is a department of ________and the __________ development

A

HUD is a
Department of Housing and Urban Develpment

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17
Q

Do Mortgage Banking companies take deposits from consumers?

A

NO

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18
Q

What is a Mortgage Banker?

A

is a company, individual, or entity that originates, processes, underwrites, closes/funds and may service mortgage loans.

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19
Q

Temporary loans, such as construction loans and 25 acres or more, commercial loans exempt from RESPA?

A

YES

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20
Q

What is the only fee that can be charged before disclosing?

A

Credit Report

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21
Q

The Dodd-Frank Act Established the

A

CFPB- Consumer Financial Protection Bureau

22
Q

What information is gathered to make a full application?

A

NAME
SOCIAL SECURITY
INCOME
LOAN AMOUNT
EST PROPERTY VALUE
PROPERTY ADDRESS

23
Q

Section 8 of RESPA

A

prohibits Kickbacks
a thing of value- includes money, things, discounts, salarie, commissions and fees.

24
Q

What is an oral or written action directed to a person which has
the effect of affirmatively influencing the selection by any person of a provider of a settlement
service.

A

A Referral

25
Q

An Escrow account can’t have more than ____ dollars or more must be returned to the borrower

A

$50

26
Q

If a referring party gives the ABA disclosure to the consumer at or prior to the referral is this a violation?

A

NO

27
Q

A written list of _________ is provided to the borrower no later than 3 business days after receiving an application

A

10 closest housing counseling organizations to the borrower’s current zip code

28
Q

What is HOPEA

A

Home Ownership and Equity Protection Act Loans

29
Q

If the lender has either an affiliate relationship or a direct or beneficial ownership, interest of more than 1 percent in a provider of settlement services, they are considered to have a what agreement?

A

Affiliated Business Arrangement Disclosure

30
Q

What is included in the inital escrow account?

A

estimated taxes, insurance, and other charges to be paid from the escrow account

31
Q

What Regulation C disclosures is included in the initial disclosures packet?

A

Regulation C, Home Mortgage Disclosure ACT

32
Q

What do CFPS’s rules and laws relate to?

A

Privacy protection
Consumer identification
Prohibiting discrimination

33
Q

Does FHA Insure the property, borrower or banks?

A

Banks To insure banks against losses for defaults on home loans

34
Q

What Market consists of lender making mortgage loans directly to the borrowers

A

The Primary Market

35
Q

Secondary Market does what 5 things?

A

consists of private investor
government-sponsored enterprises- buy and sell mortgage
created to moderate real estate cycles
give lenders new money
standardize loan criteria

36
Q

What is one function of the secondary market?

A

provide lenders with more money to make home loans

37
Q

What was the purpose of FHFA?

A

To promote a stronger and safer US housing financial system

38
Q

What best describes a non-conforming loan?

A

Jumbo

39
Q

What insures bank deposits?

A

FDIC

40
Q

Does violating Section 8’s kickback fees, referral fees, and unearned fees are criminal and civil penalties?

A

YES

41
Q

What does NMLS stand for?

A

National Mortgage Licensing System

42
Q

RESPA Section 9 prohibits what?

A

prohibits a seller from requiring the home buyer to use a particular title insurance company. Buyers may sue sellers

43
Q

RESPA Section 10 Limits on Escrow accounts what?

A

The initial amount the borrower is required to put into the escrow account

44
Q

What is TILA?

A

Truth in Lending Act

45
Q

What is the definition of a dwelling?

A

Means a residential structure that contains one to found units, whether or not that structure is attached to a real property or not.

46
Q

What defines a creditor?

A

any person who regularly extends consumer credit for transactions secured by a dwelling if they extend credit 6 or more times in the preceding calendar year

47
Q

What is a law that prohibits prefatory lending?

A

SAFE ACT
Secure and Fair Enforcement for Mortgage License

48
Q

True or False? Origination is the process of making or initialing a new loan?

A

True

49
Q

What is mortgage servicing?

A

The continued maintenance of a loan after the loan transaction has closed

50
Q

What does a prequalification determine?

A

how much a potential borrower MIGHT be eligible to borrow

Chapter One (1 decks)

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