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J9 NMLS > Federal Regulations > Flashcards

Federal Regulations Flashcards

1
Q

Ancillary Fees

A

Penalty charges, transfer fees, late charges.

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2
Q

bps

Basis Point

A

1/100 of 1%

.0x67

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3
Q

RESPA

Real Estate Settlement Procedures Act

Regulation ?

A

Regulation X

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4
Q

Median

A

The cost of doing business

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5
Q

Year Dod Frank Wall Street Reform and Consumer Protection Act established the CFPB

A

2010

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6
Q

RESPA

Payment

A

Synonymous with the giving or receiving of any “thing of value” and does not require the transfer of money

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7
Q

RESPA

Upcharge

Supreme Court

Keep upcharge - no violation

Split upcharge - violation

A

Yup

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8
Q

RESPA

Disclosures

5 of them

A

Loan Estimate

Closing Disclosure

Special Information Booklet

Mortgage Servicing Disclosure Statement

Affiliated Business Arrangement Disclosure

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9
Q

RESPA

Your Home Loan Toolkit: A Step by Step Guide

A

Can be duplicated but cannot be combined with other disclosures

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10
Q

RESPA

Info Booklets not required for…

3

A

Refinance

Closed-end loan secured by a subordinate lien

Reverse mortgage

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11
Q

RESPA

Affiliated Business Arrangement disclosed when in person and when on the phone?

A

In person - at the time of making the referral

On the phone- 3 business days after the call (when the application is taken)

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12
Q

RESPA

Appendix for the recommended language and format for Affiliated Business Disclosure

5-year record retention of disclosures

A

D

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13
Q

RESPA

Transferor- Making the transfer

Transferee- accepting the transfer

What how long does each have to notice the borrower?

A

Transferor - 15 days before the transfer date

Transferee- 15 days after transfer date

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14
Q

RESPA

Pay within _____ days of transfer effective date cannot be considered late

A

60

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15
Q

RESPA

Escrow Disclosures

2

A

Annual Escrow Account Statement - within 30 days of escrow year

Initial Escrow Account Statement - 45 days from settlement

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16
Q

RESPA

Escrow Rules

4

A

Limited cousin to 1/6 th of total disbursements

Required refunds over 50 within 39 days

New servicer has 60 days to provide initial Escrow statement

20 days to return funds left in escrow accounts after loan is paid in full

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17
Q

RESPA

Prohibited Practices -Section ?

A

8

Fee splitting, referral fees, sham businesses

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18
Q

RESPA

Penalty?

A

10,000. 1 year in jail

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19
Q

RESPA

Qualified Written Request - for Payment Errors, servicers must respond in ___ days

A

5 days

Not including Saturday, Sunday, or federal holidays

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20
Q

RESPA

Servicers responsibility in Delinquencies and Foreclosures

Live contact _____
Written Notice _______

A

Live contact on 36th day

Written contact on 45th day

Must maintain continuity of contact with borrowers. Direct and meaningful contact

21
Q

ECOA

Unlike RESPA, ECOA covers…

A

Business, commercial, and agricultural use.

22
Q

ECOA

Appraisal Disclosure rules

3

A

Right to receive copy of appraisal

Due promptly as completed or 3 business days before closing - whichever is earlier

Can be waived, bust must receive an closing

23
Q

ECOA

Regulation ?

A

B

‘Bout how to treat people

24
Q

ECOA

Overt Discrimination-

Disparate Treatment-

Disparate Impact -

A

Overt Discrimination- Redlining, reverse redlining, blatant refusal of protected class

Disparate Treatment- similarly situated borrowers treated differently (higher rate for women)

Disparate Impact- neutral policy without discriminatory intent but has discriminatory Impact

25
Q

ECOA

Exceptions of Prohibited questions while taking application

3

A

Immigration status

Info for special purpose credit assistance

Data collection requirements of ECOA

26
Q

ECOA

Penalties

Individual and class action

A

10,000 individual

Class action - lesser of 500,000 or 1% of net worth

27
Q

ECOA

Statue of Limitations

A

5 years

1 year to join DOJ suit

28
Q

TILA

Title XIV - Mortgage Reform and Anti-Predatory Lending Act

A

Yup

29
Q

TILA

Loans covered by TILA

Credit Transactions with 4 conditions…

A

Credit offered to consumers

Offer or extension of credit to made regularly

Credit includes a finance charge or is repaid in more than 4 installments

Credit for personal, family, or household purposes

30
Q

TILA

TILA does not apply to..

7

A

Business, agricultural, organizational

Credit in excess of annually adjusted threshold

Public utility credit

Credit extended by stock broker

Home fuel budget plan
Student loan
Employment sponsored retirement plans

31
Q

TILA

Close-ended loan

A

Lender disburses all of the funds at closing and demands repayment in a period of time. I.e. Mortgages

32
Q

TILA

Open-ended loans

A

Borrower and lender anticipate repeat transactions.

Limit on amount, but limit can be increased.

Payments depend on interest due or amount withdrawn.

33
Q

TILA

Creditors are defined as….

3

A

Regularly extend consumer credit

Repayment in more than 4 installments

Receive initial payments on debt that the borrower assumes

34
Q

TILA

Definitions

Application-

Business day-

Consummation-

A

Application- submission of customers financial information for the purposes of obtaining credit

Business Day- “general”- anyway creditor is open to the public. For LE. CFPB “business day” all except Sunday or Federal Holidays

Consummation- the time that a consumer becomes contractually obligated on a credit transaction

35
Q

TILA

Finance Charge-

Annual Percentage Rate-

A

Finance Charge- Cost of credit as a $ amount. Includes fees, does not include taxes, HOI, prepaids

APR- Cost of credit expressed as a yearly % rate

36
Q

TILA

Included fees

PMI - MIP
Discount points 
Mortgage broker fees
Origination fees
Processing fees
Underwriting fees
A

Excluded fees

Title fees
Escrow fees
Notary fees
Appraisal and credit report fees
Document prep fees
37
Q

ARM Rate Change Disclosure 60 to 120 days before first payment

A

Other ARM Disclosures

How interest rate is determined
Description of any limits on rate increases
How payment is determined
Info on negative amortization and prepay penalties

38
Q

TILA

LE and CD only apply to close-end loans

Define Periodic Rate

A

Rate of finance Charge I posed by a creditor in any subdivision of a year

39
Q

ROR applies to open and closed end loans secured by the consumers principal dwelling

A

Two copies of the CD for each party with ownership interest

40
Q

ROR Rescind - Creditor has 20 calendar days to return money or property to Consumer

A

Consumer must then return any funds received to the lender

41
Q

TILA

Advertising

Penalties

Criminal

Civil

Class Action

A

Criminal Liability- fines up to $5,000 and one year imprisionment

Civil Liability- no less than 400 or greater than 4000 fine

Class Action- 1,000,000 or 1% of net worth

42
Q

HOEPA - High Cost Mortgages - open and closed

Sections 31, 32, 34 of Reg Z

A

Thresholds-

First-lien - 6.5% or more above average prime

Subordinate Lien- 8.5% above average prime

$20,579 or more - points and fees exceed 5% total loan amount

$20,579 or less - lesser of 8% total loan amount or $1,029

43
Q

HOEPA

Considered high cost mortgage if prepay penalty more than 36 months after consummation

A

Refinances subject to HOEPA

44
Q

HOEPA Exceptions

Reverse mortgages

Bridge loans for initial construction

Housing finance agency is creditor

USDA loans (RHS)

A

HOEPA Disclosures

Any consumer who is primarily liable
Those with ROR rights
Due 3 business days before consummation 
Notice of balloon payment
Amount borrowed must be within $100
Notice of inclusion of insurance premiums 
Variable rate Disclosure
45
Q

HOEPA Requirements

Evaluating Ability to Repay

Borrowers receive counseling

Not notifying loan is a high cost loan

ATR does not apply to open-end loan

A

HOEPA Exceptions

Temporary and bridge loans

46
Q

HOEPA Prohibited loan Terms

Balloon payments
Negative amortization 
Advanced payments
Increased interest rate after default
Improperly calculated rebates
Prepayment penalties
Acceleration of debt
A

HOEPA Prohibited Practices

Direct payment to home improvement contractors

Loan flipping - repeated refinancing w/n 12 mo

Financing points and fees

Lending w/o regard to ATR

Lending w/o pre loan counseling

47
Q

HOEPA Higher Priced Mortgage Loans HPML

Section 35 Reg z

A

HOEPA Thresholds

Excerpt prime offer by:

  1. 5 points first-lien loans not to exceed conforming limit of 424,100 and 636,150
  2. 5 points first- lien Jumbo loans
  3. 5 points or more - subordinate lien
48
Q

HOEPA

Federal Financial Institutions Examination Council (FFIEC)

A

HOEPA HPML Escrow

Minimum 5 years

Can request cancellation at 20% equity if not delinquent or default

49
Q

HOEPA HPML

No Escrow Needed

Subordinate lien
Co-op
Initial construction 
12 or less bridge loan 
Reverse mortgage 
Open end credit (HELOC)
Insurance purchased by borrower not required by the creditor
A

HOEPA HPML

Small Creditor Exception

More than 50% rural or underserved
Not to exceed 2,000 loans per year
Assets less than 2billion annually

J9 NMLS (1 decks)

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