Home Buying Process & Fair Lending Acts

Question 1

Steps of the Homebuying Process a Counselor Assists With

Answer 1

1: Determining if homeownership is right for the client.
2: Figuring out how much the client can afford.
3: Helping clients understand their rights.

Question 2

Steps of the Homebuying Process the Client Works With a Team For

Answer 2

1: Shopping for a home.
2: Making an offer
3: Obtaining financing
4: Getting a home inspections
5: Purchasing homeowners insurance
6: Closing on a Home

Question 3

Questions to Ask Your Client to Determine if Homeownership is right for them

Answer 3

1: Do you have a record of paying bills and debts on time?
2: Are you willing to properly maintain the home and make repairs as needed?
3: Is your annual income equivalent to at least 1/3 of the average home price in the desired neighborhood?
4: Have you previously owned a home?
5: Do you have enough $ to pay for a down payment, closing costs, and other fees?
6: Do you have the ability to make a mortgage payment every month?

Question 4

What are the best ways to determine how much a client can afford to spend on purchasing a home?

Answer 4

Debt-to-income ratio, Annual Gross Income, and Savings

Question 5

Equal Credit Opportunity Act

Answer 5

Federal Law requiring lenders to make credit available equally without discrimination based on race, color, religion, nat’l origin, age, sex, marital status, or receipt of income from public assistance programs.

Question 6

Real Estate Settlement Procedures Act

Answer 6

Federal Law prohibits certain abusive acts that increase the cost of settlement services. Home sellers can’t require homebuyers to purchase title insurance from a particular company.

Question 7

Truth in Lending Act (TILA)

Answer 7

Federal law requiring that lenders disclose important info to borrowers. It requires lenders to provide consumers with loan cost information so they can comparison shop.

Question 8

TILA-RESPA Integrated Disclosure or TRID

Answer 8

TRID requires easier to use mortgage disclosure forms that clearly outline the terms of a mortgage to the borrower and provide detailed explanations about how forms should be completed and used.

Question 9

What lender disclosures did TRID combine?

Answer 9

• Good Faith Estimate & Truth in Lending disclosure became the loan estimate
• The HUD-1 Settlement Statement and the Final TIL disclosure became the closing disclosure.

Question 10

Home Ownership and Equity Protections Act (HOEPA)

Answer 10

HOEPA was enacted as an amendment to TILA to address abusive practices in refinances and closed-end home equity loans with high-interest rates of high fees.