Federal Mortgage Related Laws

Question 1

The Good Faith Estimate disclosure form is used primarily for ______ transactions

Answer 1

Reverse Mortgage

Question 2

The disclosures related to the transfer of ______ are required for first mortgage liens of
federally related mortgage loans, including all refinancing transactions of such loans.

Answer 2

Mortgage Servicing

Question 3

________ sets limits on the amounts that a lender may require a borrower to put into an
escrow account for purposes of paying taxes, hazard insurance, and other charges related
to the property.

Answer 3

RESPA Section 10

Question 4

The Real Estate Settlement Procedures Act is administered and enforced by the _____.

Answer 4

Consumer Financial Protection Bureau (CFPB)

Question 5

Payments in excess of the reasonable value of goods provided or services rendered are considered
______.

Answer 5

Kickbacks

Question 6

If a lender has either an affiliate relationship or a direct ownership interest of more than
one percent in a provider of settlement services and they directly refer business to the provider,
it is per Regulation X a _____.

Answer 6

Affiliated Business Arrangement

Question 7

Any person or persons who violate the provisions of ________ shall be fined not more
than $10,000 or imprisoned for not more than one year, or both.

Answer 7

RESPA Section 8

Question 8

RESPA is applicable to all ________ mortgage loans.

Answer 8

Federally Related

Question 9

Regulation X requires the ____________must be provided at settlement, or within 45
calendar days of settlement.

Answer 9

Initial Escrow Settlement Statement

Question 10

The ______ is the cost of a borrower’s credit calculated as an annual rate.

Answer 10

APR

Question 11

Regulation Z requires an HPML creditor to obtain a second written _____ based on an
interior inspection of the property, at no cost to the borrower, in connection with certain
flipped properties.

Answer 11

Appraisal

Question 12

Rescission business days are defined by Regulation Z to include all calendar days except
_____.

Answer 12

Sundays and Federal Holidays

Question 13

Regulation Z provides a presumption of compliance with the ability-to-repay requirement
for creditors making _______.

Answer 13

Qualified Mortgages

Question 14

TILA requires mortgage loan originators to make certain material disclosures on loans
subject to the RESPA within __________ after receipt of a written application.

Answer 14

3 Business Days

Question 15

Section 32 loans are also known as ____ loans.

Answer 15

High-Cost

Question 16

The Truth in Lending Act’s advertising provisions require that if an advertisement contains
a ____, then it must also include a number of prescribed disclosures.

Answer 16

Triggering Term

Question 17

The category of _____ mortgage loans is defined as a consumer credit transaction that
for first-lien loans are 1.5 percentage points above the average prime offer rate issued by
Freddie Mac.

Answer 17

Higher-Priced

Question 18

An essential requirement under TILA is that no loan originator shall receive, directly or
indirectly, ______ for a consumer purpose loan secured by a dwelling that is based on terms
of a transaction.

Answer 18

Compensation

Question 19

The Truth in Lending Act permits a borrower to assert a defense to foreclosure against a
creditor when there is a violation of the ____ and the ability to repay provisions.

Answer 19

Anti-Steering

Question 20

A lender must notify an applicant of action taken on the applicant’s request for credit, whether favorable
or adverse, within

Answer 20

30 days after receiving a completed application

Question 21

When a lender takes adverse action in response to an application for credit (e.g., denies the application),
the lender must notify the applicant in writing

Answer 21

within 30 days of the date of credit denial

Question 22

The lender must provide the name and contact information of the outside source used in the credit
decision The applicant has

Answer 22

60 days from receipt of the adverse action notice to make their request for the information.

Question 23

An outside source has how many days after receiving the applicant’s request to disclose the requested information.

Answer 23

The outside source of information has 30 days

Question 24

What must be included in an Adverse Action Notice

Answer 24

Part I – PRINCIPAL REASON(S) FOR CREDIT DENIAL, TERMINATION, OR OTHER ACTION TAKEN CONCERNING CREDIT.

Part II— DISCLOSURE OF USE OF INFORMATION OBTAINED FROM AN OUTSIDE
SOURCE.

Question 25

Higher-Priced Mortgage Loans (HPML) are defined as

Answer 25

closed-end residential mortgage loans secured by the consumer’s principal dwelling with an APR that exceed the average prime offer rate APOR) for comparable transactions by the following thresholds:

1.5 percentage points for a first lien conforming residential mortgage loan (loan amount
does not exceed $548,250).

2.5 percentage points for a first lien jumbo residential mortgage loan (loan amount exceeds
$548,250)

3.5 percentage points for a subordinate lien residential mortgage loan.

Question 26

High Cost Mortgage

Answer 26

A transaction is a 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:

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

• 8.5 percentage points for first-lien transactions that are for less than $50,000 and secured
by personal property (e.g., RVs, houseboats, and manufactured homes titled as personal
property).

• 8.5 percentage points for junior-lien transactions.

Question 27

Regulation B, prohibits discrimination in any aspect of a credit transaction on the basis of:

Answer 27

• Race
• Color
• Religion
• National Origin
• Sex
• Marital Status
• Age (provided that the applicant has the capacity to enter into a binding contract)
• Receipt of income from a public assistance program
• The good faith exercise of any right under the Consumer Credit Protection Act

Question 28

Home Mortgage Disclosure Act (HMDA).

Answer 28

The Home Mortgage Disclosure Act (Regulation C) requires the collection and disclosure of data about applicant and borrower characteristics to assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes. The CFPB is the federal regulatory agency that is responsible for enforcement of HMDA and for issuing implementing regulations.

Question 29

The Fair Credit Reporting Act,(FCRA) (Regulation V)

Answer 29

is legislation enacted to promote the accuracy,
fairness, and privacy of consumer information contained in the files of consumer reporting
agencies. It was intended to protect consumers from the willful and/or negligent inclusion of inaccurate
information in their credit reports. FCRA is enforced by the US Federal Trade Commission
(FTC), and the CFPB.

Question 30

The Fair and Accurate Credit Transaction Act of 2003 (FACTA)

Answer 30

added new sections to the federal Fair Credit Reporting Act, intended primarily to help consumers fight the growing crime of identity theft. Most of the disclosures, notifications, and actions required by FACTA are the duties of the CRAs.

Question 31

THE USA PATRIOT ACT

Answer 31

The portions of the Patriot Act that impact mortgage lending transactions are contained in Title III, which is called the “International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001.” The actions that non-bank mortgage lenders are required to implement include:

• The establishment of a Customer Identification Program (CIP).
• The establishment of an anti-money laundering program.
• Information sharing with law enforcement agencies and other financial institutions.

Question 32

TITLE X – THE CONSUMER FINANCIAL PROTECTION ACT OF 2010

Answer 32

The Consumer Financial Protection Bureau (“CFPB” or “Bureau”) was established under Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).

Question 33

The Gramm–Leach–Bliley Act (GLB Act), also known as the Financial Services Modernization Act of 1999

Answer 33

Protecting the privacy of consumer information held by financial institutions is at the heart of the
financial privacy provisions of the GLB Act.

The Financial Privacy Rule

The initial privacy notice must be a clear, conspicuous, and accurate statement

The notice applies to the “nonpublic personal information”

Question 34

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

Answer 34

HUD is a cabinet-level agency that oversees federal programs designed to help Americans with their housing needs. HUD seeks to increase homeownership, support community development and increase access to affordable housing free from discrimination.

FHA
GNMA
HUD
Section 8