Financing Legislation and Computerized Loan Origination Flashcards
What does RESPA require that is a benefit to consumers during the settlement process?
That the parties to certain transactions receive the correct figures pertaining to their closing costs
What does the Truth in Lending Act require lenders to disclose to buyers?
The true cost of obtaining credit so that borrowers can compare the costs of various lenders
Who does Regulation Z apply to?
All media including websites, billboards, radio, TV and direct mailing
ECOA prohibits lenders from discriminating against applicants on what basis?
On the basis of Race Color Religion National origin Sex Marital status Age Dependency on public assistance
Why was the Community Reinvestment Act passed?
To prevent redlining
According to RESPA, a real estate firm may offer a computerized loan origination system (CLO) that does what?
Provides a prospective borrower information about mortgage loan products
Prequalifies a borrower
Initiates a loan application process for a fee
What two automated underwriting systems are available for users under Fannie Mae?
Desktop Underwriter
Desktop Originator
Who are the three major credit reporting agencies?
Equifax
Experian
Trans Union
The Real Estate Settlement and Procedures Act (RESPA)
is of great benefit to consumers during the settlement process. RESPA requires that the parties to certain transactions receive the correct figures pertaining to their closing costs.
The Truth in Lending Act,
Title I of the Consumer Credit Protection Act, is implemented by Regulation Z. This law requires lenders to disclose to buyers the true cost of obtaining credit, so that borrowers can compare the costs of various lenders.
Right to Rescind
In most cases the borrower has a right to cancel the transaction by notifying the lender within three days. This does not apply to residential first mortgage loans, but does apply to refinancing and home equity loans.
The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against applicants on the basis of:
Race Color Religion National origin Sex Marital status Age Dependency on public assistance
Financial institutions are required to fairly and impartially make credit available to all credit-worthy applicants
The Home Mortgage Disclosure Act of 1975 requires that lenders report statistical information each year to insure that lenders are not restricting loans to certain individuals or neighborhoods to exclude them from obtaining a mortgage (called “redlining”).
The Fair Credit Reporting Act, or Title VI of the Consumer Credit Protection Act of 1968, requires that lenders:
Keep all credit information confidential.
Obtain authorization from a consumer in order to seek the customer’s credit information.
Reveal the sources of the credit information to the consumer.
A real estate firm may offer a computerized loan origination system (CLO) that:
Provides a prospective borrower information about mortgage loan products
Prequalifies a borrower
Initiates a loan application process for a fee
