Federal Mortgage Related Laws

Question 1

A loan contains a late payment penalty provision, which of the following documents would a borrower review to confirm this?

Answer 1

Loan Estimate

Question 2

For the purpose of rescinding a loan transaction, “business days” include everyday of the week except?

Answer 2

Sunday and Federal Holidays

Question 3

Who must receive a Notice of right to cancel in Refinance transaction?

Answer 3

Anyone with ownership interest in the property

Question 4

John Brown and Jane brown are co-owners of a property and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of Notice of Right to cancel and Jane receives no disclosure. What is their deadline for rescission?

Answer 4

Three years after closing

Question 5

RESPA applies to all of the following loans except

Answer 5

Loans for 25 acres or more

Question 6

If an individual submits false information for the purpose of obtaining a federally covered loan, he/she could be face:

Answer 6

Up to 1,000,000 fine and prison

Question 7

A service transferring notice must be provided to a borrower___ days prior to the transfer of servicing on a loan

Answer 7

15

Question 8

A lender has an affiliated business arrangement with a third party service provider. Under what circumstances can the Lender require a borrower to use the services in a loan transaction?

Answer 8

If there is no kickbacks or referral fees and the service provider is an attorney, credit reporting agency or appraiser

Question 9

When must the loan estimate be provided to the borrower>

Answer 9

Within 3 days of the application

Question 10

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

Answer 10

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

Question 11

You take an application over the phone. Which of the following must occur within three days of a potential borrower submitting an application for a loan

Answer 11

Hand deliver or mail the Loan Estimate

Question 12

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

Answer 12

within 30 days

Question 13

What kind of loan transaction requires disclosure of the settlement Cost Booklet

Answer 13

A new home purchase

Question 14

The Gramm-leach-Bliley Act specifies that a consumer must be given ___ to opt out before personal financial information is disclosed to a third party.

Answer 14

A reasonable opportunity

Question 15

The real estate settlement procedure act includes all of the following provisions except?

Answer 15

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

Question 16

Which of the following is included when calculating finance charges?

Answer 16

Mortgage broker fee

Question 17

According to Federal fair lending laws which of the following cannot be considered when qualifying an applicant for a loan.

Answer 17

A female applicant is 4 months pregnant and might not continue to work once her baby is born.

Question 18

Under the truth in lending act, a mortgage professional is required to disclose ___ to a borrower.

Answer 18

Term of the credit transaction

Question 19

Under the fair credit reporting act, which of the following entities has the burden of protecting a consumers privacy when his/her credit information is being reported.

Answer 19

The credit reporting agency

Question 20

Which of the following is true of PMI disclosure?

Answer 20

It’s different for each type of loan

Question 21

Under the Gamm-Leach-Bliley Act, which of the following is considered non public information?

Answer 21

A borrowers current loan balance

Question 22

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

Answer 22

2

Question 23

Which of the following payment is a violation of RESPA?

Answer 23

A mortgage broker accepts a fee for sending it’s consumer to a title company

Question 24

Under provision of the Truth in lending act, what is the maximum tolerance for an understated finance charge?

Answer 24

$100

Question 25

A lender is gathering information on loans for the purpose of HMDA reporting. Loans made which of the following property types may be left out of the Lenders reports?

Answer 25

Travel trailers

Question 26

If a loan applicant does not disclose his or her race on the loan application what should a mortgage professional do?

Answer 26

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

Question 27

All of the following information is provided for an adjustable rate loan per TILA guidelines except:

Answer 27

Statements that the interest rate will be affected for the duration of the loan

Question 28

If a mortgage professional advertises a loan product at “7.25% APR,” according to TILA what other information must be included in the same advertisement?

Answer 28

No other information required

Question 29

Which of the following facts about the settlement cost information booklet is not true?

Answer 29

It can be made part of other larger documents

Question 30

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

Answer 30

Service provider B has performed bona fide services in exchange for the fee

Question 31

Mr Jones loan application has been denied and you provided him with an adverse action notice as required by ECOA. Which of the following pieces would not be included on the notice?

Answer 31

His credit score

Question 32

Which of the following is defined as the cost of credit expressed as a dollar amount?

Answer 32

Finance charge