Federal Laws Flashcards
The borrower is entitle to the disclosure of the costs of a mortgage loan through the LE within:
3 business days of the application
According to the Fair and Accurate Credit Transaction Act, when are borrowers entitled to get a copy of their credit scores for no reason?
A borrower never has a right to their credit score - they are allowed a free copy of their credit report once year.
An MLO purchases tickets for a sporting event and provides those tickets to a local real estate agent as a thank you for a referral and also in the hopes that real estate agent will continue to send clients, this would be considered:
An illegal practice - RESPA section 8 prohibits the payment of referral fees and kickbacks between parties to a real estate transaction.
HMDA requires the lenders to obtain what information for each borrower?
Race and Sex
After meeting with the borrowers to complete a loan application, you return to your office and order a Tri-Merged credit report. Now that you have a credit report, what loan disclosure must you now prepare and mail (or give) to them?
Notice to Home Loan applicant - required under FACTA
If a loan originator is in a face-to-face loan interview with the applicant, and the applicant does not wish to answer the questions in Section 8 on the 1003, the loan officer must
Fill out the information based on visual observation
Name some disclosures required within 3 business days of receiving an application?
CHAMRS booklet for ARMS
LE
Home loan toolkit
In compliance with Regulation Z, how long is a lender required to maintain the closing disclosure
5 years
The responsibility of financial institutions to meet both the deposit and credit needs of the community, including the needs of low-income families, is called?
Community Reinvestment Act (CRA) - enacted in 1977
The practice of getting people to sell their homes at bargain prices by suggesting that certain ethnic groups are going to move into the area is nicknamed:
Blockbusting
What law requires the lender to collect a borrower’s demographic information for first mortgages and home improvement loans?
HMDA - Reg C
According to Regulation B, are these practices allowed: asking if the applicant is married, including income from alimony or child support if it is to be computed into the income, including the payment of alimony or child support into the liabilities.
YES.
Under what law is the lender required to provide an adverse action disclosure if the borrower’s credit is the reasoning for all or part of the decision to deny the loan application?
Reg V or the Fair Credit Reporting Act requires that an adverse action be provided to the borrower within 30 days of a credit decision if the borrower’s credit is the reasoning for all or part of the decision to deny the loan application.
Who would be an appropriate person to discuss the borrower’s credit with to determine whether they qualify for the proposed laon or not.
Underwriter
Respa does not apply to:
Vacant land, large tracts of land (25 acres or more, even if there is a dwelling on it, commercial or business loans, the government, or temp financing.
Dodd-Frank mandated which rule that now appears under TILA?
Qualified Mortgage Rule, the Ability to Repay Rule and Loan originator compensation. All three of these rules fall under Reg Z or TILA.
An MLO is looking over a borrower’s credit report and sees a fraud alert, under the Economic Growth, Regulatory Relief and Consumer Protection Act, how long can a fraud alert be on a borrower’s credit report?
1 year
An MLO is required to protect a borrower’s non-public personal information, per what federal law?
Regulation P - also known as the Gramm-Leech Billey Act or the Financial Modernization Act of 1999. GLBA restricts the disclosure of borrower’s NPI.
True/False - Realtor’s commission is included in the APR calculation
FALSE
What is likely to happen if the lender/investor finds fraud?
The lender/broker will be required to repurchase the loan
The entire loan can be called due and payable
The loan officer must pay back and any premium made on the loan.
You and the borrower believe an adjustable rate mortgage would be best for the borrower. What is the name of the booklet you are required to give?
CHARM booklet
How many days in advance of transferring a loan to another lender must the current mortgage servicer inform that customer of the transfer who will subsequent be servicing the loan?
15 days - Respa, referred to as the Goodbye letter
What are the penalties for violating Section 8 of RESPA?
$10,000 and up to 1 year in prison
What is the maximum penalty for providing false information on a federally related loan?
Up to 1,000,000 and can also face jail
Which rule dictates how instructions are required to dispose of consumer’s information?
The disposal rule under FACTA
