Dodd Frank Act Flashcards
Purpose of Dodd Frank?
Promote financial stability and end abusive practices in financial servicea
Who created the the dodd-frank
Created by Consumer financial protection bureau
What the does the CFPB regulate?
Covered persons who engage of provide financial services or products
Which of the following are covered by Dodd –Frank(CFPB)
a. Providing check cashing, check collection, or check guarantee services
b. Providing appraisal of real or personal property
c. servicing consumer loans
d. Buying payment instruments
A.
No MLO can receive compensation that is based on what?
Terms of the loan
How are MLO’s paid >
Paid on size of the loan
Can an MLO be paid by the client and the employer for originating the loan?
No they can’t be paid by both only one or the other.
How long must proof of compliance of compensation be held for?
3 years
What are the general rules for mortgage companies?
- No loans where a borrower lacks ability to repay
- No steering clients away from a qualified mortgage into a non qualified one.
Which of the following is not considered when evaluating the Ability to Repay?
a.) Property Value
b.) Alimony
c.) Child Support
d.) Part time income
A.
How to calculate ATR on an ARM
Use fully indexed rate or intro rate whichever is higher if loan can adjust in first 5years
What is a Qualified Mortgage
Plain vanilla 30 yr fixed rate or standard fully amortized ARMS
What can’t a QM have?
Negative amortization, interest only or balloon payments, or terms that exceed 30 years, points and fees that exceed specified limits
How is a loan considered a qualified loan?
Final APR cant exceed by more then 2.25 % for a comparable transaction
According to Dodd-Frank what is the max prepayment penalty on a qualified mortgage in the
2nd year?
2%
