Ethics

Question 1

Regulation that is intended to curb the unethical practice of charging consumers unearned fees for settlement services

Answer 1

RESPA

Question 2

Regulation whose initial goal of informing consumers about the cost of credit has expanded to address many ethical issues, including deceptive advertising practices, predatory lending, deceptive appraisal practices, and the origination of loans without considering a borrower’s repayment ability

Answer 2

TILA

Question 3

The component of TILA that addresses predatory lending practices by prohibiting particular acts and practices that were formerly associated with transactions for subprime loans

Answer 3

HOEPA

Question 4

Creates legal requirements for lenders to meet their ethical obligations to protect the privacy of personal information that consumers share during lending transactions

Answer 4

Gramm-Leach-Billey Act

Question 5

Prohibits the unethical practice of discriminating against loan applicants based on personal characteristics, such as gender, race, national origin, and marital status

Answer 5

ECOA

Question 6

Allows the federal government to prosecute those who willfully and knowingly make false statements on their loan applications

Answer 6

Federal False Statements Act

Question 7

Two FBI categorizations for mortgage fraud

Answer 7

1. Fraud for Profit

2. Fraud for housing

Question 8

Three characteristics to qualify for exception of affiliated business arrangement referral under RESPA

Answer 8

1. Affiliation is disclosed to the customer
2. Use of the affiliate is not required
3. Benefit is limited to the ownership interest in the affiliated business

Question 9

Involves the offering of mortgage credit exclusively on the basis of the equity that a consumer has in his or her home, without consideration of repayment ability.

Answer 9

Equity-based Lending

Question 10

Government agency that enforces the Fair Housing Act

Answer 10

HUD

Question 11

Protected classes under the Fair Housing Act

Answer 11

Race
Color
National origin
Religion
Sex
Familial status
Handicap

Question 12

Amends ECOA by prohibiting discrimination based on sexual orientation and gender identity

Answer 12

Housing Opportunities Made Equal Act of 2013

Question 13

Perform purely administrative and/or clerical tasks under the supervision, and on behalf, of licensed mortgage professionals

Answer 13

Loan Processors

Question 14

Transferred the oversight of Fannie Mae and Freddie Mac from HUD and the Office of Federal Housing Enterprise Oversight to the Federal Housing Finance Agency (FHFA). FHFA has much more involvement with Fannie Mae and Freddie Mac than the former regulatory agencies had.

Answer 14

The Housing and Economic Recovery Act of 2008

Question 15

Established the Uniform Standards of Professional Appraisal Practice (USPAP) as the generally-accepted appraisal standards in the United States.

Answer 15

Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)

Question 16

Under TRID, these fee amounts cannot change from the initial Loan Estimate:

Answer 16

1. Fees charged by a creditor or one of its affiliates
2. Fees paid to a provider of settlement services if the loan applicant is not allowed to shop
3. Fees paid to a mortgage broker
4. Fees paid for transfer taxes

Question 17

The following “changed circumstances” allow for settlement costs to vary by 10%+

Answer 17

1. Natural Disaster
2. Title Insurer goes out of business before closing
3. New information is uncovered

Question 18

UDAAP Penalties under Dodd-Frank

Answer 18

$5,000 each day a violation continues

$25,000 each day a reckless violation continues

$1 million each day a known violation continues

Question 19

When must a lender respond to a complaint they are forwarded from the CFPB?

Answer 19

15 Calendar Days

Question 20

An individual who accepts a fee, ranging from $500 to several thousand dollars, to provide his/her name, Social Security Number, and other personal information for use on a mortgage application.

Answer 20

Straw Buyer

Question 21

An individual who accepts a fee to falsely claim ownership to a property. Falsified or fabricated title documents, including sham warranty deeds, are created to support the fraudulent claim that the indvidual is the owner and occupier of the property securing the loan.

Answer 21

Straw Seller

Question 22

When a fictitious borrower obtains a mortgage loan and “secures” it with fictitious property

Answer 22

Air Loan

Question 23

When fraudulent real estate brokers or investors try to unload property with an inflated value and questionable title history on an unsuspecting buyer. When these buyers ask to inspect the property, the seller may discourage an inspection or rush the potential buyer through the home.

Answer 23

Cursory Inspection

Question 24

Executed by forcing the sale of a home for less than it is worth and reselling it at its true value

Answer 24

Property “Flopping”

Question 25

This law is intended to facilitate the prosecution of those who commit mortgage fraud and to increase the financial resources that are available to investigate and prosecute fraud cases.

Answer 25

Fraud Enforcement and Recovery Act (FERA)

Question 26

Fraud that applies to fraudulent actions against government agencies, such as HUD and the Federal Housing Administration

Answer 26

Conspiracy