Federal-Related Mortgage Laws Flashcards
Party who, for a fee, originates loans on behalf of lenders but does not service such loans.
Mortgage Broker
The federal Home Mortgage Disclosure Act (HMDA) of 1975(12 U.S.C. 2801 et seq.) requires many depository and non-depository lenders to collect and publicly disclose information about housing-related loans and applications for such loans, including several applicant/borrower demographic characteristics. The HMDA is implemented by the Consumer Financial Protection Bureau’s Regulation C (12 CFR Part 1003).
Home Mortgage Disclosure Act
State-chartered banks, located mostly in the northeastern U.S., owned by depositors and operated for their benefit. Usually, a large portion of their assets are mortgages.
Mutual Savings Banks
The Fair and Accurate Credit Transactions Act of 2003, sometimes referred to as either the FACT Act or simply FACTA, amended the federal Fair Credit Reporting Act and is intended primarily to help consumers fight the growing crime of identity theft. The FACTA contains seven major titles: Identity Theft Prevention and Credit History Restoration; Improvements in Use of and Consumer Access to Credit Information; Enhancing the Accuracy of Consumer Report Information; Limiting the Use and Sharing of Medical Information in the Financial System; Financial Literacy and Education Improvement; Protecting Employee Misconduct Investigations, and Relation to State Laws.
Fair and Accurate Credit Transaction Act
The Homeowners Protection Act of 1998 (HPA or PMI Cancellation Act) was signed into law on July 29, 1998, became effective on July 29, 1999, and was later amended on Dec. 27, 2000. This act establishes provisions for canceling and terminating PMI, sets disclosure and notification requirements, and requires the return of unearned premiums. The Dodd-Frank Act granted authority to the Consumer Financial Protection Bureau (CFPB) to supervise for and enforce compliance with the Homeowners Protection Act with respect to entities within its jurisdiction.
Homeowners Protection Act
The federal Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (GLB Act), includes provisions in Title V to protect and regulate the disclosure of consumers’ personal financial information. There are three principal parts to the Title V privacy requirements: Safeguards Rule, Pretexting Provisions, and Financial Privacy Rule.
Gramm-Leach-Bliley Act
The termination of a contract with each party giving anything acquired under the contract back to the other party (verb form is to rescind).
Rescission
As defined by Regulation Z, which implements TILA, dwelling means a residential structure that contains one to four units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.
Dwelling
The Consumer Financial Protection Bureau (CFPB) is an independent government agency within the Federal Reserve System with rulemaking and enforcement authority over many consumer financial laws. The Bureau was established under Title X of the Dodd-Frank Act.
Consumer Financial Protection Bureau
The Currency and Foreign Transactions Reporting Act of 1970 (which legislative framework is commonly referred to as the “Bank Secrecy Act” or “BSA”) requires U.S. financial institutions to assist U.S. government agencies to detect and prevent money laundering. Specifically, the BSA requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Several anti-money laundering acts have been enacted up to the present to amend the BSA leading to the act now being commonly referred to as the BSA/AML Act.
Bank Secrecy Act
This Act, also known as the Dodd-Frank Act, was implemented to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘‘too big to fail’’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes. Title X of this Act creates a new Bureau of Consumer Financial Protection within the Federal Reserve Board as a new supervisor for certain financial firms and as a rule-maker and enforcer against unfair, deceptive, abusive, or otherwise prohibited practices relating to most consumer financial products or services. Title XIV of the Act amends the Truth in Lending Act, the Equal Credit Opportunity Act, and other consumer financial laws to prevent mortgage-related abuses and to improve availability of responsible, affordable mortgage credit.
Dodd-Frank Wall Street Reform and Consumer Protection Act
Federal Home Loan Bank System (FHLB) is a government-sponsored enterprise, created by Congress, but privately funded, that supports mortgage lending and related community investment for its member banks and financial institutions.
Federal Home Loan Bank System
The Government National Mortgage Association (GNMA) is commonly known as Ginnie Mae. This agency of the Department of Housing and Urban Development (HUD) operates in the secondary mortgage market. It is involved with special government financing programs, e.g., FHA-insured and VA-guaranteed loans.
Government National Mortgage Association
On January 1, 2011, the Federal Trade Commission (FTC) began enforcing the Fair and Accurate Credit Transactions Act (FACTA or FACT Act). Section 114 of the FACT Act is known as the Red Flags Rule. The Rule requires that financial institutions and creditors implement a written identity theft prevention program.
Red Flags Rule
The Telemarketing Sales Rule (16 CFR 310) requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.
Telemarketing Sales Rule
Regulation B (12 CFR Part 1002) implements the Equal Credit Opportunity Act. The purpose of Regulation B is to protect applicants from discrimination in any aspect of a credit transaction.
Regulation B
Regulation P (12 CFR Part 1016) implements the Privacy of Consumer Financial Information. It requires financial institutions to provide certain privacy notices and to comply with certain limitations on the disclosure of nonpublic personal information to nonaffiliated third parties.
Regulation P
The federal Truth in Lending Act (TILA) of 1968 was designed to promote the informed use of consumer credit through proper disclosure and allow for the rescission of certain transactions secured by a borrower’s principal dwelling. It is administered by the Consumer Financial Protection Bureau. The most relevant provisions of TILA are contained in Title I of the Consumer Credit Protection Act (15 U.S.C. § 1601 et seq.) and are implemented by Regulation Z (12 CFR § 1026).
Truth in Lending Act
The Equal Credit Opportunity Act (ECOA)(15 USC §1691 et seq.) is a federal law passed in 1974 that ensures that all consumers are given an equal chance to obtain and maintain credit. ECOA is implemented through Regulation B (12 CFR § 1002) and enforced by the Consumer Financial Protection Bureau.
Equal Credit Opportunity Act
The Federal Reserve System (FRS) is a federal agency that oversees and regulates monetary policy, which in turn affects interest rates and the availability of credit. All federally chartered commercial banks must be members.
Federal Reserve System
Take back or withdraw an offer or contract.
Rescind
As defined by Regulation X, which implements RESPA, settlement means the process of executing legally binding documents regarding a lien on property that is subject to a federally related mortgage loan. This process may also be called “closing” or “escrow” in different jurisdictions.
Settlement
