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My RMLO Prep > Federal Law > Flashcards

Federal Law Flashcards

1
Q

What is the purpose of RESPA?

A

Consumer protection statute

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2
Q

RESPA excludes:

A
  1. Secured by parcels 25 acres or more, whether improved or not
  2. Used for business, commercial, agricultural

RESPA is a consumer protection statute meant to protect individuals, not for business purposes.

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3
Q

Which act was designed to promote the informed use of consumer credit?

I.e The cost of lender fees

A

Truth in lending act, regulation Z

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4
Q

The CFPB (The bureau) is established within which system?

A

The federal reserve system

Treated as an executive agency

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5
Q

Credit application records must be maintained for how many months?

A

25 months

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6
Q

RESPA Disclosure for closing? Is due when?

A

HUD 1 or HUD 1 A; due at the time of closing, may be requested one day prior

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7
Q

What are the disclosures according to regulation Z?

A

Early TIL disclosure statement

TIL disclosure statement

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8
Q

Which act was enacted to provide protection against predatory lending?

A

Home ownership equity protection act
HOEPA

aka High Cost loans

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9
Q

RESPA section 8 is the prohibition against what?

A

Kickbacks and unearned fees

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10
Q

TILA - Regulation ?

A

Truth in Lending Act - Regulation Z

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11
Q

What law addresses is dumpster diving?

A

FACTA

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12
Q

Which is a prohibited base according to Regulation B?

National origin
Immigration status

A

National Origin

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13
Q

Which fees would NOT be included in APR?

Application fee
Mortgage broker fee
Appraisal fee
Mortgage insurance premiums
Title insurance

Why?

A

Appraisal fee
Title insurance

These are fees that do not come back to the lender.

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14
Q

High cost mortgages require what?

And not require what?

A

HUD counseling required

No appraisal or escrow account required

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15
Q

TRID

A

TILA-RESPA Integrated Disclosure Rule

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16
Q

ECOA - Regulation ?

A

Equal Credit Opportunity Act - Regulation B

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17
Q

What law allowed consumers to view their own credit?

A

Fair credit reporting act, FCRA

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18
Q

HUD/Fair Housing Act protects against discrimination in what areas that are not included in ECOA?

A

Disability

Familial status

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19
Q

What is a RESPA business day?

A

Any day the business entity is open to the public

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20
Q

What are the penalties of RESPA section 8?

A

Fines up to $10,000 and imprisoned up to one year or both

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21
Q

Automatic termination of PMI is when according to HPA?

A

78% LTV

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22
Q

Per RESPA, how long must the lender retain records of disclosures?

Mortgage servicing disclosure statement
HUD-1 or HUD1A
Affiliated business arrangement disclosure

A

Five years after settlement

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23
Q

How many business days to deliver RESPA disclosures?

A

3 business days

Days office is open to the public.

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24
Q

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

A

Home mortgage disclosure act

HMDA

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25
Q

A High Cost mortgage is/has…

HOEPA, Section 32, Regulation Z

A

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

26
Q

At what point can the borrower request cancellation of PMI?

And according to what act?

A
  1. The date the original value of the property reaches 80% LTV

HPA

27
Q

When would be TIL disclosure statement require re-disclosing?

A

If APR varies by more than 1/8 of 1% at any time prior to closing

28
Q

Transactions subject to HOEPA coverage?

A

Purchase-money mortgages
Refinances
Closed end home equity loans
Open end credit (HELOCS)

29
Q

Affiliated business arrangement (ABA) or Controlled business arrangements (CBA) do not violate section 8 of RESPA and Regulation X when the disclosure is given:

A

At or prior to the time of referral

30
Q

What are the disclosure timing requirements under TILA?

A
  1. Early TIL disclosure statement within three business days of receipt of loan application
  2. TIL disclosure statement disclosed no less than seven business days prior to settlement
31
Q

____ states that lenders may not ask about marital status; lenders are permitted only to ask if an applicant is married, unmarried or separated.

A

ECOA Regulation B

32
Q

RESPA is applicable to federally related mortgage loans that are:

A
  1. One-to-four family structures, including individual units of condominiums
  2. Manufactured homes with the land it is located on
33
Q

Which act is known as the PMI Cancellation Act?

A

HPA

Homeowners protection act

34
Q

TILA 3 & 7 day waiting period follows what business days?

A

Rescission business days

35
Q

Which of the following is not considered a “prohibited basis“ under Regulation B?

A. Race
B. Age
C. Gender
D. Religion

A

C. Gender

Regulation B specifies SEX, not gender, as a prohibited base.

36
Q

The notice of the right to rescind is applicable to what transactions?

A

Refinance transactions only

37
Q

What act established the CFPB?

A

Title X, Dodd Frank

38
Q

RESPA section 10 Limits on escrow accounts

How much may a lender require the borrower to pay into escrow each month?

A

No more than 1/12 of the total of all disbursements payable during the year

39
Q

The rules for high cost mortgages can be found where?

A

Section 32 of regulation Z

40
Q

Application components - PENCIL

A

Property, Est Value, Name, Credit report, Income, Loan amt

41
Q

What agency enforces RESPA?

A

CFPB Consumer Financial Protection Bureau

42
Q

Notice of Right to Rescind requires?

A

two copies of the notice and one copy of the disclosure statement to each consumer

43
Q

RESPA Disclosures following application…

A
  1. HUD’s Special Information Booklet “Your home loan toolkit”
  2. GFE - Reverse mortgages, HELOC
  3. 5 Loan Estimate - most else
  4. Mortgage Servicing Disclosure Statement
44
Q

TILA has how many versions of business days?

And what are they?

A

(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

45
Q

RESPA - Regulation ?

A

Real Estate Settlement Procedures Act - Regulation X

46
Q

Of the 3 C’s, which is measured by DTI?

A

Capacity

47
Q

What Regulation references the Affiliated Business Arrangement?

A

Reg X, RESPA

48
Q

3 main requirements of the Gramm Leach Bliley Act?

A

Financial Privacy Rule
Safeguards Rule
Pretexting Provisions

49
Q

What law requires mortgage loan originators to implement a written identity theft prevention program to detect the warning signs of identity theft?

A

Fair & accurate credit transaction act of 2003

FACTA

50
Q

What act places restrictions on lenders requirements for tax and insurance escrow accounts?

A

RESPA

51
Q

What initial disclosure is used for reverse mortgage transactions?

A

GFE

52
Q

The Initial TIL Disclosure is used for which transactions?

A

HELOC
Manufactured home not secured by property
Loan thru certain homebuyer assistance programs

53
Q

Payments in excess of the reasonable value of goods provided or services rendered…

A

Kickbacks

54
Q

Disparate impact

A

Policy or practice that has a disproportionate adverse effect on applicants from a group protected against discrimination

55
Q

Regulation B allows a MLO to inquire about an applicant’s what?

A

Permanent residence & immigration status

56
Q

Define APR

A

Cost of borrowers credit calculated as an annual percentage rate

57
Q

Which loan product may require a second written appraisal at no cost to the borrower in connection with certain flip properties?

HOEPA
HPML

A

HPML

Higher Price

58
Q

What is the purpose of the mortgage servicing disclosure statement?

A

Inform consumer servicing could be sold transferred or assigned

59
Q

What is the qualifying income ratio on FHA?

A

31%/43%

60
Q

Ratios:

conforming conventional
FHA
VA
USDA

A

28/36
31/43
-/41
29/41

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