Federal Mortgage-Related Law

Question 1

Higher-Priced Mortgage Loans (HPML) are defined as closed-end residential mortgage loans secured by the consumer’s principal dwelling with an APR that exceeds the average prime offer rate (APOR) for comparable transactions by:

Answer 1

2.5 percentage points for a first lien jumbo residential mortgage loan.

Question 2

The Truth-In-Lending Act requires residential mortgage loan originators to make certain “material disclosures” on loans subject to the Real Estate Settlement Procedures Act within three:

Answer 2

Business days after their receipt of a written application.

Question 3

Lenders must report under the HMDA the applicant’s ethnicity, race, and sex. When conducting a face-to-face interview in which the applicant refuses to provide the required HMDA information; the loan officer must provide the information based on:

Answer 3

Appearance and surname.

Question 4

An Affiliated Business Arrangement disclosure is required to be given to the consumer?

Answer 4

At or prior to the time of referral.

Question 5

Under the TILA, the consumer has a right of rescission in a credit transaction involving:

Answer 5

Refinance of a principal dwelling.

Question 6

The Fair Credit Reporting Act allows consumers all the following except:

Answer 6

Demand all references to bankruptcies be removed from their report after 5 years from the date of discharge.

Question 7

Under RESPA Section 6, a servicer must mail or deliver an initial written notice to the borrower at least how many days before assessing a charge or fee related to force-placed insurance?

Answer 7

45 days

Question 8

Under the Red Flags Rules, mortgage loan originators must develop a written program that identifies and detects the warning signs of:

Answer 8

Identity theft.

Question 9

This booklet must be given to every applicant considering an Adjustable-Rate Mortgage:

Answer 9

Consumer Handbook on Adjustable-Rate Mortgages.

Question 10

All the following inquiries are considered discriminatory under ECOA except:
Race,
sex,
National origin,
immigration status

Answer 10

Immigration status

Question 11

The Truth in Lending Act’s advertising provisions require that if an advertisement promoting “closed-end credit” contains a “triggering term,” three specific disclosures must also be included in the advertisement. What is not considered a “triggering term” under Regulation Z?

Answer 11

The Annual Percentage Rate.

Question 12

ECOA requires that a copy of the appraisal must be given to the applicant:

Answer 12

Promptly upon its completion or three business days before consummation.

Question 13

The Homeowners Protection Act is a consumer protection law that requires servicers to:

Answer 13

Automatically discontinue PMI when the borrower reaches 78% LTV if there are no late payments in the past 12 months.

Question 14

Under the TILA, when a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer will:

Answer 14

no longer be liable for any amount, including any finance charge.

Question 15

Which is not an event that would require a new waiting period for the Closing Disclosure?

Answer 15

Unexpected discoveries on a final walk-through requiring a seller credit to the buyer.

Question 16

To comply with ECOA, a Statement of Credit Denial, Termination, or Change form must be retained by the creditor for at least:

Answer 16

25 months.

Question 17

A transaction is a HOEPA high-cost mortgage if its APR (measured as of the date the interest rate for the transaction is set) exceeds the Average Prime Offer Rate (APOR) for a comparable transaction on that date by more than:

Answer 17

6.5 percentage points for first-lien transactions $50,000 and above.

Question 18

If an applicant is denied credit, the lender must give notice to the applicant. Within _____ days after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application.

Answer 18

30 days

Question 19

The CFPB’s Final Rule prohibits residential mortgage loan originator compensation be based on ?

Answer 19

Yield spread premium of a mortgage loan.

Question 20

RMLOs are required to file suspicious activity reports (“SAR”) with the Financial Crimes Enforcement Network (FinCen):

Answer 20

No later than 30 calendar days after the date of the initial detection.

Question 21

Transactions covered by the TILA-RESPA rule?

Answer 21

Construction-only loans

Question 22

A transaction is a HOEPA mortgage if its points and fees exceed the following threshold:

Answer 22

5 percent of the total loan amount for a transaction with a loan amount of $22,969 or more.

Question 23

The Mortgage Acts and Practices Advertising Rule (MAP Rule) prohibits any material misrepresentation, whether made expressly or by implication, in any commercial communication, regarding any term of any mortgage credit product. The MAP Rule mortgage lenders to maintain records of all advertisements for:

Answer 23

24 months.

Question 24

According to the Truth in Lending Act, which fees is excluded from the calculation of the annual percentage rate?

Answer 24

Attorney fee

Question 25

What landmark legislation represents a sweeping restructuring of United States financial regulation in response to the worst financial crisis in the United States since the Great Depression?

Answer 25

The Dodd-Frank Wall Street Reform and Consumer Protection Act

Question 26

Which is the correct definition of Business Day for providing the Initial Loan Estimate?

Answer 26

Any day on which the creditor is open to the public

Question 27

The activities carried out by the HUD’s Office of Fair Housing and Equal Opportunity include implementing and enforcing the:

Answer 27

Fair Housing Act.

Question 28

Regulation Z, for purposes of rescinding a loan transaction, defines “business days” as every day of the week except:

Answer 28

Sundays and federal holidays.

Question 29

The Electronic Signature in Global and National Commerce Act (ESign Act) made it possible to conduct business online by legitimizing electronic signatures. The E-Sign Act requires all the following except:

Answer 29

That a signature,contract, or other record relating to all transactions may not be denied legal effect, validity or enforceability solely because it is in electronic form.