Federal Mortgage-Related Laws Flashcards by Paul Son

A borrower has gone to settlement for a cash-out refinance on Tuesday for his principal residence. His rescission period is over at midnight on Friday. According to the provisions specified under federal law, what is the first possible day the loan could fund?

Saturday

How well did you know this?

Not at all

Perfectly

According to fair lending laws, which of the following may loan applicants be asked to disclose for HMDA data collection purposes?

Their race

How well did you know this?

Not at all

Perfectly

The penalties for paying or accepting an illegal referral fee are:

Fines of up to $10,000 and up to one year in prison

How well did you know this?

Not at all

Perfectly

Finance charges always include which of the following?

Mortgage broker fee

How well did you know this?

Not at all

Perfectly

An annual escrow analysis is used to do which of the following?

Prevent escrow overages

How well did you know this?

Not at all

Perfectly

If a creditor denies an application for a first lien mortgage, a copy of the appraisal:

Must be provided within 30 days of the decision to deny

How well did you know this?

Not at all

Perfectly

HOEPA was enacted as a part of:

TILA

How well did you know this?

Not at all

Perfectly

The mandatory waiting period between issuance of disclosures and consummation may be waived:

If the consumer requests a waiver due to a bona fide financial emergency

How well did you know this?

Not at all

Perfectly

There is a ____ accuracy tolerance for amounts stated on the Loan Estimate and the actual closing costs if the consumer is allowed to shop for his/her own settlement service provider.

10%

How well did you know this?

Not at all

Perfectly

Closed-end loans with rates that exceed the average prime offer rate, but are not high enough to trigger protections under HOEPA, are known as:

Higher-priced mortgage loans

How well did you know this?

Not at all

Perfectly

Under the Fair Credit Reporting Act, which of the following entities has the burden of protecting a consumer’s privacy when his/her credit information is being reported?

Credit reporting agency

How well did you know this?

Not at all

Perfectly

If a mortgage broker decides to use telemarketing to establish leads for loan origination, which of the following should occur?

Obtain access to the Do-Not-Call registry

How well did you know this?

Not at all

Perfectly

The Loan Originator Compensation Rule is intended to discourage which of the following practices?

Steering

How well did you know this?

Not at all

Perfectly

All but which of the following may serve as a legal, non-discriminatory basis for denying a mortgage loan application?

The consumer is purchasing a home located in a neighborhood primarily occupied by minorities

How well did you know this?

Not at all

Perfectly

Mr. Jones’s loan application has been denied and he is provided with an Adverse Action Notice as required by ECOA. Which of the following pieces of information would not be included on the notice?

His credit score

How well did you know this?

Not at all

Perfectly

The disclosure requirements of RESPA would apply to which of the following loans?

A loan to purchase a duplex and rehabilitate it into a single family dwelling

How well did you know this?

Not at all

Perfectly

A customer with an excellent credit score submits a loan application. When does ECOA require that the applicant be advised of the status of the application?

Within 30 days

How well did you know this?

Not at all

Perfectly

Which of the following is not included in calculating the APR?

Escrow fees

How well did you know this?

Not at all

Perfectly

HOEPA would not apply to:

A bridge loan to finance construction

How well did you know this?

Not at all

Perfectly

If a creditor denies an application for a first lien mortgage, a copy of the appraisal:

Must be provided within 30 days of the decision to deny

How well did you know this?

Not at all

Perfectly

Suspicious Activity Reports (SARs) are used to help detect and prevent:

Money laundering

How well did you know this?

Not at all

Perfectly

Lenders must report detailed information about loan transactions and demographic information concerning borrowers in order to prove they are not discriminating. Which of the following laws creates that reporting requirement?

HMDA

How well did you know this?

Not at all

Perfectly

If a consumer opens an account online, the Gramm-Leach-Bliley Act states that what period of time constitutes a “reasonable opportunity” to opt out of information sharing?

30 days

How well did you know this?

Not at all

Perfectly

If a loan applicant chooses not to disclose his or her race on a loan application, what recourse does a mortgage professional have?

Note that the applicant has declined to answer and select a race based on visual observation

How well did you know this?

Not at all

Perfectly

The Do-Not-Call Implementation Act authorized the implementation and enforcement of:

The Do-Not-Call Registry

The amount of the down payment, the amount of the finance charge, or the number of payments needed are all examples of _________ under TILA.

Trigger terms

XYZ Mortgage Company just mailed a Closing Disclosure to a consumer. The waiting period prior to closing will begin:

Three business days after the disclosure is placed in the mail.

The Loan Originator Compensation Rule defines compensation to include all of the following, except:

Payments collected by a mortgage company for services other than loan origination services

Under the Homeowners Protection Act, borrowers can request that lenders cancel PMI when their loan balance is less than _______, or a lender may collect PMI until __________ loan-to-value is reached.

80%; 78%

This Rule applies to commercial communication used to market mortgage loan products and services to consumers.

MAP Rule

Under the Gramm-Leach-Bliley Act, which of the following is considered nonpublic information?

A borrower's current loan balances

An application is defined to consist of six pieces of information. These include the borrower's name, income, and desired loan amount, as well as:

An application is defined as the submission of six pieces of information: (1) the consumer’s name, (2) the consumer’s income, (3) the consumer’s Social Security number to obtain a credit report (or other unique identifier if the consumer has no Social Security number), (4) the property address, (5) an estimate of the value of the property, and (6) the mortgage loan amount sought.

When must a lender advise loan applicants about the status of their application?

Within 30 days

What kind of loan transaction requires disclosure of the special information booklet called "Your Home Loan Toolkit: A Step-by-Step Guide"?

A new home purchase

For the purposes of issuing a revised Loan Estimate, "changed circumstances" must involve a change that caused estimated amounts to increase by at least:

10%

The Real Estate Settlement Procedures Act includes all of the following provisions, except:

It establishes the maximum origination fee that may be charges on a loan

Which of the following is included when calculating finance charges?

Interest

According to federal fair lending laws, which of the following facts cannot be considered when qualifying an applicant for a loan?

A female applicant is four months pregnant and might not continue working once her baby is born

Which of the following is not a factor that may be used as a basis for determining borrower repayment ability?

Existing equity in the home

The rule that established requirements for ensuring that a borrower can afford to take on a mortgage loan is known as the:

Ability to Repay Rule

An attorney and a lender enter3ed ito an agreement in which the attorney's car loan payments are paid by the lender in return for the names of potential loan applicants. Who has violated RESPA?

Both the attorney and lender

WHich of the following payments is a violation of RESPA?

A mortgage broker accepts a fee for sending its customers to a title company

HMDA's implementing regulation is:

Regulation C

Murphy is a mortgage broker who has an ownership interest in a local title insurance company. When his clients apply for loans and request referrals to a title company, Murphy must:

Immediately provide an affiliated business arrangement disclosure if he refers them to the title company in which he has an ownership interest

A real estate agent receives a $50 restaurant gift certificate from a mortgage broker as a token of appreciation for referring a home buyer to the mortagge broker. Which of the following laws was violated as a result of this transaction?

RESPA

Why did COngress enact the Home Mortgage Disclosure Act?

TO help identify patterns of discriminatory lending

Which of the following reasons for denying an applicant a loan is a violation of fair lending laws?

The applicant's recent change in marital status may lead to a change in employment

A mortgage broker pays for title services on behalf of a developer. In return, the developer agrees to refer prospective buyers to the mortagge broker. Who has violated RESPA?

Both the mortgage broker and the developer

RESPA does not apply to:

Loans for business, commercial, and agricultural purposes

If a mortgage professional advertises a loan product at "7.25% APR for the first six months! After first six months, APR is 10.5%, subject to increase based on market conditions," what additional disclosure does TILA require?

No other information is required

All of the following features are prohibited for a qualified mortgage, except:

Adjustable interest rates

WHich of the following is true of the home loan toolkit bookelt?

If there are multiple borrowers, it is only required to be given to one of them

The real estate seettlement procedures act applies to:

residential loans

What federal statute serves to control the settlement costs of residential mortgage loans?

RESPA

It is legal for settlement service provider A to pay settlement service provider BZ a portion of fees charged to a borrower only when:

Service provider B has performed bona fide services to earn the fee

When must loan applicants receive an Adverse Action Notice if they do not qualify for a loan?

Within 30 days of the adverse action

Under ECOA, when is a notice concerning the right to obtain a copy of the appraisal due to a consumer?

within 3 business days of loan application

Jack has applied for a refinance of his mortgage , which is secured by a first lien on his home. He asks if he can see the appraisal report that his lender ordered and learns that:

The lender must provide a copy of the appraisal upon completion, or 3 business days prior to consummation, whichever is earilier

Five siblings have ownership rights to a property. if a refinance transaction affecting the property is subject to rescission, how many of these individuals must submit a rescission notice in order to void the loan?

Any one of the five

A lender is permitted to deny any applicant credit based on which of the following factors?

The applicant lacks income stability

If a creditor violates ECOA, how many years does a consumer have in which to take civil action?

Five years

What is the purpose of Regulation B?

To prohibit discriminatory actions

An acceptable anti-money laundering program must include all but which of the following elements?

Approval by FinCEN prior to its implementation

FCRA defines a _______ as any person who reularly extens, renews, or continues credit; regularly arranges for the extension, renewal, or continuation of credit; or is an eassignee of a person who participates in decisions to extend, renew, or continue credit.

Creditor

WHich of following is true of PMI?

Loan servicers must give borrowers an annual disclosure stating that they may have the right to cancel their PMI

Requiring a spouse to serve as a co-signer on a loan is not a discriminatory practice when:

The signature is required by law in a community property state

In order to waive the right to receive a copy of the appraisal report before consummation, a consumer must:

submit an oral or written waiver at least three business days prior to consummation

HOEPA does not apply to:

REverse mortgage loans

The CFPB's regulatory and disciplinary authority was extended to it by:

The Dodd-Frank Act

Minimuim standards for mortgages, which have been established through rulemaking proceedings mandated by the Dodd-Frank Act, include a requirement to:

Establish standards for the evaluation of the repayment ability of borrowers

The federal agency that is responsible for implementation and enforcement of the USA Patriot act is:

The treasury department

The investigations that are conducted to identify perpetrators of financial crimes and the rulemaking regarding anti-money laundering provisions of the PAtriot act are carried out by the _____ within the _______.

The financial crimes enforcement network (FinCEN); treasury department

Regulations adopted pursuant to the USA patriot act are:

Something about institutions feburary 2012

Section 8 of RESPA and its prohibition against unearned fees?

A title company pays a mortgage broker $100 per client for referral of settlement business

The servicing rules require live contact with a delinquent borrower:

By the 36th day of delinquency

The Supreme Court has issued an opinion regarding markups, stating that:

Markups are not a violation of RESPA as long as the fee is not split

When calculating finance charges in compliance with TILA, all of the following are included, except:

Closing agent ees, when the borrower chooses the closing agent

HUD is responsible for writing rules and implementing which of the following acts?

The Fair Housing Act

For charges subject to a 10% tolerance, to the extent that the sum of the charges added together exceeds the sum of charges disclosed on the Loan Estimate by more than 10%:

A consumer is eligible for a refund of the difference

Consummation may occur no earlier than seven business days from the date on which the loan estimate is:

Delivered or placed in the mail

Which of the following transactions is covered by the TRID Rule?

First mortgage on a single-family dwelling

For which of the following is the creditor permitted to charge more than it discloses in the Loan Estimate (i.e. there is no tolerance limitation) and still meet the good farith requirement?

Prepaid interest

Which of the following is not a change or correction to the closing disclosure that would cause a new three-buesiness-day waiting period to begin?

An additional $500 seller credit