DODD-FRANK WALL STREET REFORM & CONSUMER PROTECTION ACT |

Question 1

Clarity the Act defines a mortgage loan originator as what ?

Answer 1

Means any person who, for direct or indirect compensation or gain, or in the
expectation of direct or indirect compensation or gain

(i) takes a residential mortgage loan application;
(ii) assists a consumer in obtaining or applying to obtain a residential mortgage loan; or
(iii) offers or negotiates terms of a residential mortgage loan;

Question 2

What is the objective of the Dodd-Frank Act?

Answer 2

TopromotethefinancialstabilityoftheUSbyimprovingaccountabilityinthe
financial systems

Question 3

What measures did the Dodd-Frank Act enact to eliminate predatory loan originator compensation practices?

Answer 3

Restricts compensation being paid to originator by any other source if the borrower in any way is paying fees that compensate the originator

Question 4

Which of the following best represents the role of the Consumer Financial Protection Bureau?

Answer 4

Regulating consumer financial products and services

Question 5

The Consumer Financial Protection Bureau has one (1) year to combine the disclosure information from which of the following two (2) laws?

Answer 5

TILA and RESPA

Question 6

What consists of the FULLY-INDEXED RATE DEFINEd subsection?

Answer 6

For purposes of this subsection, the term ̳fully indexed rate‘ means the index rate prevailing on a residential mortgage loan at the time the loan is made plus the margin that will apply after the expiration of any introductory interest rates.

Question 7

What consists of theREVERSE MORTGAGES AND BRIDGE LOANS subsection?

Answer 7

This subsection shall not apply with respect to any reverse mortgage or temporary or bridge loan with a term of twelve (12) months or less, including to any loan to purchase a new dwelling where the consumer plans to sell a different dwelling within twelve (12) months.

Question 8

SEASONAL INCOME

Answer 8

f documented income, including income from a small business, is a repayment source for a residential mortgage loan, a creditor may consider the seasonality and irregularity of such income in the underwriting of and scheduling of payments for such credit.

Question 9

What consists of the AVERAGE PRIME OFFER RATE?

Answer 9

The term ̳average prime offer rate‘ means the average prime offer rate for a comparable transaction as of the date on which the interest rate for the transaction is set, as published by the Board.

Question 10

What is the definition of a BONA FIDE DISCOUNT POINTS ?

Answer 10

For purposes of clause (ii), the term ̳bona fide discount points‘ means loan discount points which are knowingly paid by the consumer for the purpose of reducing, and which in fact result in a bona fide reduction of, the interest rate or time-price differential applicable to the mortgage.

Question 11

What is a FREE COPY OF APPRAISAL?

Answer 11

A creditor shall provide 1 copy of each appraisal conducted in accordance with this section in connection with a higher-risk mortgage to the applicant without charge, and at least three (3) days prior to the transaction closing date.

Question 12

What violations occurs when a creditor willfully failed to obtain an appraisal.

Answer 12

In addition to any other liability to any person under this title, a creditor found to have willfully failed to obtain an appraisal as required in this section shall be liable to the applicant or borrower for the sum of two thousand dollars ($2,000).

Question 13

What is the definition of a fee Appraiser?

Answer 13

means a person who is not an employee of the mortgage loan originator or appraisal management company engaging the appraiser and is—

(A) a State licensed or certified appraiser who receives a fee for performing an appraisal and certifies that the appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice; or
(B) a company not subject to the requirements of section 1124 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) that utilizes the services of State licensed or certified appraisers and receives a fee for performing appraisals in accordance with the Uniform Standards of Professional Appraisal Practice.

Question 14

What represents a major consumer protection adopted in the Dodd- Frank Act?

Answer 14

No loan will be made without the determination of the borrower‘s ability to repay

Question 15

Per Dodd-Frank, which of the following loan type may exempt a lender from income
verification on a consumer’s mortgage loan?

Answer 15

FHA streamline refinances

Question 16

Dodd-Frank introduced new appraisal independence regulations that require that on a higher-risk loan that the appraiser does which of the following?

Answer 16

Physically performs a property visit of the interior of the property

Question 17

The Dodd-Frank appraisal independence provisions, prohibit lenders from which of the following activities?

Answer 17

Compensate, coerce, bribe or intimidate an appraiser for appraisal firm to influence value

Question 18

What is the task of the Bureau of Consumer Financial Protection within the Federal Reserve?

Answer 18

To regulate consumer financial products and services in compliance with federal laws.

Question 19

The Bureau of Consumer Financial Protection will be under the direction of which of the following?

Answer 19

A Director appointed by the President with advice and consent of the Senate

Question 20

What law was amended to adopt the provisions for loan originator compensation?

Answer 20

The Truth in Lending Act (TILA)

Question 21

Dodd-Frank prohibits compensation that varies bases on which of the following?

Answer 21

Terms of the Loan

Question 22

No creditor may make a residential mortgage loan unless the creditor first does what?

Answer 22

Determines that the consumer has a reasonable ability to repay the loan according to its terms

Question 23

the Dodd-Frank Act minimum standards for mortgage loans have eliminated which of the following types of loans?

Answer 23

No Income Verification loans (NIV)

Question 24

The Dodd-Frank Act prohibits an appraiser providing an appraisal on a high risk loan from doing which of the following?

Answer 24

Providing an appraisal in which they did not perform a physical inspection of the interior

Question 25

Under what circumstances must a creditor order a second appraisal under the new Dodd-Frank Act?

Answer 25

When the seller acquired the property at a lesser value within the last six (6) months