Federal Mortage Related Laws (24%) Flashcards
 RESPA stands for the Real Estate Settlement Procedures Act
which was enacted by congress in 1974 to provide homebuyers and sellers with complete settlement cost disclosures. It was also meant to eliminate abusive practices during a real estate settlement process, by eliminating kickbacks and limiting the use of escrow. RESPA is currently under the jurisdiction of the Consumer Financial Protection Bureau, or CFPB. The law applies to the majority of purchase loans, refinances, loans to improve property, and equity lines of credit.
Respa how many days to correct the issue?
The servicer will have 60 days to correct the issue brought forth by the borrower, or provide an explanation for why the account’s status is the way it is.
For any improprieties against a loan servicer, a plaintiff has up to how many years to file a suit.
Three years
What is A Deed in Lieu of Foreclosure?
When the foreclosing party accepts the deed of real estate from the owner, rather than proceeding with a foreclosure. The lender will generally have claims to a deficiency balance.
It takes at least how many years after a foreclosure before a borrower can qualify for an FHA loan?
Four years
Equal Credit Opportunity Act (ECOA)
This law is related to civil rights and protects potential borrowers from being discriminated against based on race, color, national origin, religious views, sex and gender, marital status, or age.
Disparate Treatment
Disparate impact is when a lender applies a policy or practice that adversely affects one group of people based on prohibited factors.
Truth in Lending Act (TILA)
was enacted in 1968 to protect consumers in their dealings with lenders and creditors. The rules of this act are designed to make it simpler for consumers to shop around and compare prices from different lenders. This will safeguard the consumer from unfair practices by the lender.
Right of Rescission
Which means they have a three-day cooling-off period after getting a loan. During this time, they can reconsider their decision and call off the loan without penalty.
Home Ownership and Equity Protection Act (HOEPA)
was placed in 1994 as an amendment to TILA. This particular act was enacted to address abusive practices related to refinancing and high interest rate closed-end home equity loans. Any of these that meet HOEPA’s high-cost average tests are required to comply with special disclosure restrictions and standards.
TILA-RESPA Integrated Disclosure Rule
The TILA-RESPA rule applies to the majority of closed-end consumer credit transactions that are secured by real property.
TILA-RESPA rules do not apply to items
HELOCs, reverse mortgages, or loans secured by mobile homes and other dwellings not attached to real property. The rule does not apply to loans made by someone who is not considered a creditor.
Bank Secrecy Act (BSA)
ensure national banks are properly controlling and providing requisite notices to law enforcement to deter illegal practices. These practices include terrorist financing, money laundering, and other misuses of financial institutions.
Suspicious Activity Reports (SAR)
Suspicious Activity Reports, or SARs, must be submitted through the BSA E-Filing System. A SAR is required to be filed by a financial institution no later than 30 calendar days after the initial detection of facts for filing comes to fruition.
Patriot Act
The Patriot Act was enacted in 2001, which amended the BSA. The primary change that occurred from this was that financial institutions were required to have a Consumer Identification Program, or CIP.
