Federal Law Flashcards
What is the purpose of RESPA?
Consumer protection statute
RESPA excludes:
- Secured by parcels 25 acres or more, whether improved or not
- Used for business, commercial, agricultural
RESPA is a consumer protection statute meant to protect individuals, not for business purposes.
Which act was designed to promote the informed use of consumer credit?
I.e The cost of lender fees
Truth in lending act, regulation Z
The CFPB (The bureau) is established within which system?
The federal reserve system
Treated as an executive agency
Credit application records must be maintained for how many months?
25 months
RESPA Disclosure for closing? Is due when?
HUD 1 or HUD 1 A; due at the time of closing, may be requested one day prior
What are the disclosures according to regulation Z?
Early TIL disclosure statement
TIL disclosure statement
Which act was enacted to provide protection against predatory lending?
Home ownership equity protection act
HOEPA
aka High Cost loans
RESPA section 8 is the prohibition against what?
Kickbacks and unearned fees
TILA - Regulation ?
Truth in Lending Act - Regulation Z
What law addresses is dumpster diving?
FACTA
Which is a prohibited base according to Regulation B?
National origin
Immigration status
National Origin
Which fees would NOT be included in APR?
Application fee Mortgage broker fee Appraisal fee Mortgage insurance premiums Title insurance
Why?
Appraisal fee
Title insurance
These are fees that do not come back to the lender.
High cost mortgages require what?
And not require what?
HUD counseling required
No appraisal or escrow account required
TRID
TILA-RESPA Integrated Disclosure Rule
ECOA - Regulation ?
Equal Credit Opportunity Act - Regulation B
What law allowed consumers to view their own credit?
Fair credit reporting act, FCRA
HUD/Fair Housing Act protects against discrimination in what areas that are not included in ECOA?
Disability
Familial status
What is a RESPA business day?
Any day the business entity is open to the public
What are the penalties of RESPA section 8?
Fines up to $10,000 and imprisoned up to one year or both
Automatic termination of PMI is when according to HPA?
78% LTV
Per RESPA, how long must the lender retain records of disclosures?
Mortgage servicing disclosure statement
HUD-1 or HUD1A
Affiliated business arrangement disclosure
Five years after settlement
How many business days to deliver RESPA disclosures?
3 business days
Days office is open to the public.
Which act requires lenders to ask applicants for information regarding their ethnicity, race and sex?
I.e applicants may refuse, lenders must provide according to appearance and surname
Home mortgage disclosure act
HMDA
A High Cost mortgage is/has…
HOEPA, Section 32, Regulation Z
APR exceeds APOR by more than 6.5% for first lien
Fees greater than 5% (greater than or equal to 21,032); 8% or $1052 (less than 21,032)
Pre-payment penalty for 36 months or more; or more than 2% of amt prepaid
At what point can the borrower request cancellation of PMI?
And according to what act?
- The date the original value of the property reaches 80% LTV
HPA
When would be TIL disclosure statement require re-disclosing?
If APR varies by more than 1/8 of 1% at any time prior to closing
Transactions subject to HOEPA coverage?
Purchase-money mortgages
Refinances
Closed end home equity loans
Open end credit (HELOCS)
Affiliated business arrangement (ABA) or Controlled business arrangements (CBA) do not violate section 8 of RESPA and Regulation X when the disclosure is given:
At or prior to the time of referral
What are the disclosure timing requirements under TILA?
- Early TIL disclosure statement within three business days of receipt of loan application
- TIL disclosure statement disclosed no less than seven business days prior to settlement
____ states that lenders may not ask about marital status; lenders are permitted only to ask if an applicant is married, unmarried or separated.
ECOA Regulation B
RESPA is applicable to federally related mortgage loans that are:
- One-to-four family structures, including individual units of condominiums
- Manufactured homes with the land it is located on
Which act is known as the PMI Cancellation Act?
HPA
Homeowners protection act
TILA 3 & 7 day waiting period follows what business days?
Rescission business days
Which of the following is not considered a “prohibited basis“ under Regulation B?
A. Race
B. Age
C. Gender
D. Religion
C. Gender
Regulation B specifies SEX, not gender, as a prohibited base.
The notice of the right to rescind is applicable to what transactions?
Refinance transactions only
What act established the CFPB?
Title X, Dodd Frank
RESPA section 10 Limits on escrow accounts
How much may a lender require the borrower to pay into escrow each month?
No more than 1/12 of the total of all disbursements payable during the year
The rules for high cost mortgages can be found where?
Section 32 of regulation Z
Application components - PENCIL
Property, Est Value, Name, Credit report, Income, Loan amt
What agency enforces RESPA?
CFPB Consumer Financial Protection Bureau
Notice of Right to Rescind requires?
two copies of the notice and one copy of the disclosure statement to each consumer
RESPA Disclosures following application…
- HUD’s Special Information Booklet “Your home loan toolkit”
- GFE - Reverse mortgages, HELOC
- 5 Loan Estimate - most else
- Mortgage Servicing Disclosure Statement
TILA has how many versions of business days?
And what are they?
(2)
General business days are days the office is open to the public
Rescission business days are all calendar days except Sundays and legal holidays
RESPA - Regulation ?
Real Estate Settlement Procedures Act - Regulation X
Of the 3 C’s, which is measured by DTI?
Capacity
What Regulation references the Affiliated Business Arrangement?
Reg X, RESPA
3 main requirements of the Gramm Leach Bliley Act?
Financial Privacy Rule
Safeguards Rule
Pretexting Provisions
What law requires mortgage loan originators to implement a written identity theft prevention program to detect the warning signs of identity theft?
Fair & accurate credit transaction act of 2003
FACTA
What act places restrictions on lenders requirements for tax and insurance escrow accounts?
RESPA
What initial disclosure is used for reverse mortgage transactions?
GFE
The Initial TIL Disclosure is used for which transactions?
HELOC
Manufactured home not secured by property
Loan thru certain homebuyer assistance programs
Payments in excess of the reasonable value of goods provided or services rendered…
Kickbacks
Disparate impact
Policy or practice that has a disproportionate adverse effect on applicants from a group protected against discrimination
Regulation B allows a MLO to inquire about an applicant’s what?
Permanent residence & immigration status
Define APR
Cost of borrowers credit calculated as an annual percentage rate
Which loan product may require a second written appraisal at no cost to the borrower in connection with certain flip properties?
HOEPA
HPML
HPML
Higher Price
What is the purpose of the mortgage servicing disclosure statement?
Inform consumer servicing could be sold transferred or assigned
What is the qualifying income ratio on FHA?
31%/43%
Ratios:
conforming conventional
FHA
VA
USDA
28/36
31/43
-/41
29/41
