Ethics & Fraud Flashcards

Question

Explain what mortgage servicers need to do for full/partial payments

Answer 1

They must promptly credit mtg payments when rcvd. Must give a borrower credit for the FULL payment as of the day the payment is rcvd. If they are partial payments being made, they need to disclose & will be handled. They put it in a special account. Once collected enough to make a full payment, servicer must credit that payment to the borrower's account.

Answer 2

> access correct info about a borrower's loan > respond promptly > pass along correct info about a mtg acct when servicer sells a borrower's loan servicing to another company > property evalute an app for relief when a borrower is having difficulties paying a mtg loan. They must have a process in place, > keep records for at least 1 year after a mtg loan is PIF

Answer 3

When a homeowner fails to keep his home insured, lender has the right to buy & charge insurance to cover the lender's interest in the home. Usually MORE expensive > Servicer must alert the homeowner at least 45 days before it charges for a force-placed insurance policy > Warn the owner again at least 30 days later (2nd notice) > Bill the homeowner only the BONA FIDE COST (meaning that they can't add anything else on top of it) of the force-placed insurance coverage.

Answer 4

> Must quickly resolve any consumer requests in writing within 30-45 business days

Answer 5

> NO later than 36 days after a missed payment > Provide workout options to the borrower w/in 45 days after a missed payment Under regulation X regarding home foreclosures/modifications

Answer 6

Loan Modification; when borrower is experiencing a difficulty making payments It involves establishing new payment terms that are mutually agreed upon between the lender and delinquent borrower to get payments back on schedule

Answer 7

1) Borrower is required to submit an app & support doc for help 2) Once the servicer rcvs the app, they have a 5-day window to request additional info from the borrower 3) W/in 30 days AFTER submission of a complete loan workout app, the mortgage servicer must inform the borrower if there IS an option to save the home

Answer 8

Borrowers may seek this which is an APPEAL of the mortgage service's workout decision. They can appeal at least 90 days prior to the foreclosure sale, and then servicer needs to not commence any action during the 90 day timeframe

Answer 9

When servicers move forward on a foreclosure at the same time they are working with a borrower on a workout plan

Answer 10

Any conducted/attempted transaction or pattern of transaction that is suspicious like: > involves money from criminal activity > designed to evade Bank Secrecy Act (money laundering) Examples: uses a false ID

Answer 11

A Suspicious Activity Report must be filed w/in 30 days of detection of the suspicious transaction It is ILLEGAL to tell any person involved in a transaction that a SAR has been filed A copy of the SAR must be kept for at least 5 years

Answer 12

Loans that take advantage of ill-informed consumers: -Excessively high fees -Misrepresented loan terms -Frequent refinancing that does not benefit the borrower Targets borrowers with little knowledge of, or defense against, these practices Goals: >Take the property or strip its equity > Profit from fees

Answer 13

Statement on Subprime Lending 1) Making loans based predominately based on the foreclosure/liquidation value. The only reason you're giving them this loan bc they have equity on this property and NOT the borrower's ability to repay the loan 2) Borrower to repeatedly refinance (loan flipping), charge high points & fees each the loan is refinanced 3) Engaging in fraud or deception to make the deal go through

Answer 14

> When elderly homeowners are required to apply for & obtain mtg loans they don't want > A child/caregiver brings the consumer to take the loan MLO should take the consumer's app, but before actively proceeding, conduct 1-1 with the senior borrower and you need to make that decision