Intro Flashcards
1
Q
What does TRID stand for & what is it designed to do?
A
TILA-RESPA Integrated Disclosure Rule
Designed to:
-help consumers understand their options
-avoid surprises @ closing
-help consumers become more informed shoppers
2
Q
Why do we have TRID? What Act created this?
A
Prior to October 3, 2015, borrower rcvd 2 cost-related disc forms at the time of app AND 2 more similar forms at closing. It contained overlapping info and quite confusing for consumers to understand. Dodd-Frank Act & CFPB combined these disclosures to make them easier to understand & cut back on excessive paperwork. Hence now TRID.
3
Q
The TRID rule does NOT apply to what type of mortgages?
A
-home equity lines of credit (HELOC)
-Reverse
-Mortgages for mobile homes not secured by real estate
-Loans from anyone who funds no more than 5 loans in a calendar year
*Loans exempted will continue to use the GFE, HUD, & TILA disclosure forms
4
Q
How many years does it require for the creditor to retain records for an LE?
A
3 years
5
Q
How many years does it require for the creditor to retain records that show compliance with a CD and related documents?
A
5 years
6
Q
What is the delivery of the LE to the consumer?
A
Required to give or mail the LE no later than 3 business days after taking borrower’s app & no later than 7 business days prior to consummation. If LE is mailed, it is considered to be rcvd by the borrower 3 bus. days after mailing. It includes creditor’s office are open to the public for business.
7 day business includes all calendar days except Sundays & legal holiday
7
Q
How many days needs to be provided for a revised LE?
A
W/in 3 business days of receiving info
8
Q
What other document needs to be indicated other than the LE?
A
Intent to Proceed
9
Q
How many days are the charges on the LE @ least good for?
A
@ least 10 business days
10
Q
What allows consumers to waive the 7 day period?
A
A “bona fide financial emergency”. It’s a written statement that includes all of the following:
-A description of the financial emergency (usually regarding a foreclosure issue)
-An express statement that the waiting period is waived/modified
-Signatures of all consumers that are obligated to repay the loan
11
Q
What is provided on the LE?
A
-Rate lock & all info (expires)
-Total Interest Percentage (TIP): how much INTEREST is paying in the loan and w/ a certain amount of years
-Provides comparison of payments made and the principal reduction of the loan in the first 5 years
-Estimated Cash to Close
-Servicing & delivery of appraisal
-Likelihood of future refinance, we don’t know what the market will be, we cannot guarantee you your right to refinance
-Designated place for borrower to sign
12
Q
What are Valid Changed Circumstances?
A
-Change in eligibility
-Consumer-requested revisions
-Delays caused by the consumer
-Extraordinary event beyond the control of any interest ex. natural disaster
-Unexpected event specific to consumer
-Change or inaccuracy
-New info specific to the consumer
13
Q
What is Zero Tolerance & what are the items?
A
NO tolerance for error
-Fees paid to the creditor, mortgage broker, undewriter, processing
-Origination Fees
-Cost of 3rd party services - appraisal, CR, tax service, flood cert
14
Q
What are the Cumulative tolerance of 10%?
A
Cannot exceed by more than 10%
-Recording Fees
-Fees to 3rd party service providers that the borrwer is allowed to shop for (title services, termite inspect)
-Govt recording fees
15
Q
What is the no tolerance requirement?
A
Meaning: WITHOUT LIMIT
> If borrower chooses their own 3rd party service provider. Example, HOI, title insurance
Fees that are paid per diem (pre-paid mortgage interest),
Homeowner’s/Flood/Property Taxes due at closing
16
Q
For a fixed-rate loan, what will NOT change?
A
Principal & interest
17
Q
What is the origination charge?
A
Itemizes each amount and a subtotal of all amts that the consumer will pay for the loan ex) points, app fee, underwriting fee
18
Q
What is disclosed on the “Other Considerations” on the LE?
A
-Appraisal: creditor will provide a copy even if the consummation does not occur
-Assumption: whether or not a subsequent purchaser of the property will be permitted to assume the loan on its original terms
-HOI: whether HOI is required and that the borrower may choose the provider
-Late Payment: more than 15 days late
-Loan Acceptance: consumer doesn’t have to accept the loan, not bound to it
-Refinance
-Servicing
19
Q
How many years does the creditor need to keep the copy of the CD? Who is responsible to send to the borrower & seller?
A
5 years; Creditor is responsible to send to borrower. Settlement agent is responsible to the seller.
20
Q
What are the valid change in circumstances for the CD?
A
1) Changes to the loan’s APR
2) Changes to the loan product
3) Addition of a prepayment penalty
21
Q
What is on page 4 of the CD?
A
-Negative Amoritization
-Demand features
-consumer to set up an escrow account, risk of failing
22
Q
What is on Page 5 of the CD?
A
1) Total of payments
2) Finance Charge: the total dollar amount the loan costs the client
3) Amount Financed: the loan amt avilable for the consumer’s use
4) APR
5) TIP: life of the loan
6) Other Disclosures: offer additional warnings about the risks. Appraisal, contract details, liability after foreclosure, refinance, tax deductions
7) Contact Info
23
Q
What does ECOA stand for & when was it enacted? What Regulation is it under? What does it do?
A
The Equal Credit Opportunities Act. Congress enacted in 1974 to eliminate discriminatory treatment of credit applicants. Gives equal chance to obtain credit. Requires separate credit files for married spouses IF requested. It addresses fairness in the app process, the extension of credit & appraisal disc requirements
Regulation B. - “BE EQUAL” **helps memorize
*primary reason was women were not being treated equally when applying for credit
-If an application for credit is DENIED based on the appraisal, under ECOA (Reg B) says borrower has 90 days to request a copy/lender has 30 days to deliver
=ECOA(RegB) allows the borrower to CHALLENGE the VALUE
Deals with credit APP
24
Q
What documents are disclosed to consumers under ECOA?
A
It needs to include a notice to the applicant of their right to receive a copy of any appraisal report that was used in the credit decision making process
25
What is the Fair Housing Act?
It addresses fairness in the extension of credit relating to housing and other housing related discrimination practices
26
Under ECOA, it prohibits discrimination in all types of credit based on what?
Sex, Race, Color, National Origin, Religion, AGE, MARITAL STATUS, Receipt of INCOME from public assistance (welfare, SSA, child support), exercised rights under the Consumer Credit Protection Act
27
How do you ask an applicant their marital status?
Are you married, unmarried, or separated?
28
When an applicant applies for a mortgage, what are the age requirements?
Age shouldn't be a factor but at least 18 and for reverse, at least 62
29
ECOA requires the creditor to notify the borrower of their status of the application within how many days?
w/in 30 days following receipt of a COMPLETED APPLICATION
30
Credit Decisions will generally take what kind of written form?
1) Approved - a commitment letter is provided to the applicant
2) Incomplete - a notice of incomplete application is provided to the applicant
3) Denied - a statement of Adverse Action is provided to the applicant
31
What is Adverse Action Notice?
It's a notification given to an applicant when adverse action is taken shall be in writing and shall contain a statement of the action being taken:
-a stmt of SPECIFIC REASONS for the action taken OR disclose that the applicant has the right to request the reason(s) for denial w/in 60 DAYS
-Disclosure needs to include name, address, and telephone # of the person/office from which stmt of reasons can be obtained
-If chosen to disclose orally, the creditor shall also disclose the applicants right to have them confirmed in writing w/in 30 days of rcving the applicant's written request for confirmation
32
How many days does a borrower need to receive a notice of his/her "Right to Receive" a copy of the appraisal?
w/in 3 days of the application
33
If an application is denied based on the appraisal report, how many days does the consumer have the right to request the appraisal report? how many days does the lender need to provide?
Consumer - 90 days; Lender 30 days
34
If application was approved, borrower should rcv the appraisal within how many days?
no later than 3 business days prior to the close of a 1st lien loan
35
How many months does ECOA disclosure must be retained? Why?
25 months; Civil action may be filed within 2 years (24 months) to sue for ECOA violation
36
What is the penalty for violations of ECOA?
$10K per violation
37
What is the Civil Rights Act & When?
1866; prohibits public and private racial discrimination in any property transaction in the US. Even though created then, it was basically ignored until 1968. **REMEMBER THIS IS ABOUT RACE
38
What Supreme Court Case really regulated the Civil Rights Act?
Jones v. Mayer
39
What are the remedies under the Civil Rights Act?
-injunction: required defendant to do/refrain
-compensatory damages: reimbursement for expenses
-punitive damages: punish
You can get 1 of these, or you can get ALL of them or any combos
40
What is the Fair Housing Act?
Part of what Act & When?
Title VIII of the Civil Rights Act of 1968. It makes it illegal to discriminate in the SALE OR LEASE of residential property and prohibits discrimination based on:
Sex, Race, Color, National Origin, Religion, PHYSICAL OR MENTAL DISABILITY, FAMILIAL STATUS (families w/ children under the age of 18, pregnant women, anything that has to do w/ children)
41
Congress further expanded the Fair Housing Act with expanded protection. What Act is this & when?
Americans with Disabilities Act (ADA), signed into law in 1990
42
What are the exemptions for the Fair Housing Act?
-It is NOT a violation to refuse rental of a room/unit in a dwelling with no more than 4 independent units, provided that the owner occupies one unit as a residence. If you own the house, you can discriminate of who you want to rent other people
-Single-family home is sold or rented by a private owner w/o the use of a broker, sell by owner
-Housing operated by organizations and/or private clubs (example: sorority, senior)
43
What are some of the discriminatory practices that violate the Fair Housing Act?
-Refusing to rent/sell property after good faith offer
-Refusing to negotiate sale/rental of residential property
(example: listing agent discriminates to show the house)
-Making any representation that property is not available for inspection/sale/or rent when it is available
-Using discriminatory advertising that indicates limitation/preference (example: no children on a listing)
-Coercing, intimidating, threatening/interfering w/ anyone for exercising rights
-Discriminating in the terms/conditions of any sale/rental of residential property or providing any services/facilities
44
What includes the Fair Housing Act Discriminatory Practices?
-Blockbusting (panic selling): trying to induce owners to SELL their homes by suggesting that the ethnic/racial composition of the neighborhood is changing w/ the implication that property values will decline due to this change, COMMITTED BY REAL ESTATE AGENTS
-Steering: channeling prospective real estate buyers/tenants to particular neighborhoods based on their race, religion, or ethnic background, COMMITTED BY REAL ESTATE AGENTS
-Redlining: refusal to make loans on property located in a particular neighborhood for discriminatory reasons. This promoted the passage of the HMDA law - THESE ARE COMMITTED BY LENDERS
45
What is the advertising for the Fair Housing Act?
Lenders are required to include the "equal housing lender" slogan in any broadcast advertisement
Display the Equal Housing Opportunity LOGO on all printed promo material
46
Within how many years can a written complaint may be filed with HUD office?
w/in 1 year of violation
47
What is the Community Reinvestment Act?
Congress enacted this to encourage financial institutions to help meet the CREDIT needs of the communities in which they operate, including low & moderate-income neighborhoods, consistent w/ safe & sound lending practices
48
What is the Home Mortgage Disclosure Act? What Regulation?
HMDA; Congress enacted this to encourage financial institutions to help meet the HOUSING needs of the communities in which they operate, including low & moderate-income neighborhoods, consistent w/ safe & sound lending practices
-it was written in response to "redlining"
-Regulation C
-if refused, and the app is taken face to face, interviewer is required to make a visual observation (ECOA) or otherwise, HDMA requires the lender to complete the report based on surname
49
Where is the HDMA information collected in?
Section 8 of the 1003
50
What does HMDA require lender to do?
File Loan Application Register (LAR) Reports due March 1st of each year. LAR reports contain info regarding the ethnicity, race and sex of individuals that apply for loans
51
What's the purpose in filling out the demographic info of the 1003?
Identifying possible discriminatory lending patterns through the collection & disclosure of data about applicant
52
What is the Homeowners Protection Act? When does it apply?
HPA; requires lenders or servicers to provide disclosures concerning private mortgage insurance (PMI) on residential mortgage transactions
Only applies if the loan is current & the payment history is acceptable. This means no payment was 30 days or more past due in the past 12 months and no payment was 60 days or more past due in the previous 24 months
53
When can a borrower request cancellation of PMI?
When loan balances reached 80% LTV of the OG purchase price/appraised value of the home *THiIS IS WHEN BORROWER MAY REQUEST AT 80%)
54
When is PMI automatically cancelled?
When the LTV reaches 78% or less of the OG purchase price or appraised value of the home at the time the loan was obtained, whichever is less (THIS IS WHEN IT AUTOMATICALY GETS CANCELLED - KNOW THE DIFFERENCE)
Lender/servicer must disclose this info annually to the homeowner
If the PMI has not been cancelled, it will end when loan reaches the midpoint. Example: 30 year loan midpoint is after 180 payments
55
What is FCRA & under what Regulation?
Fair Credit Reporting Act; Regulation V
Was enacted to ensure the accuracy, fairness, and privacy of consumers' personal info used by consumer reporting agencies (CRA)
-dealing with the granting of credit, access to credit info, rights of debtors, and the responsibilities of creditors
-It requires credit reporting agencies to VERIFY **REMEMBER* V AS IN VERIFY or VERY GOOD CREDIT that is under dispute and limits how long neg info can remain on a credit report
56
What are the 3 CRAs?
Equifax, Trasunion, & Experian
57
What is a creditor?
Defined as "a person who regularly extends consumer credit that is subject to a finance charge or is paid by written agreement in more than 4 installments, and to whom the obligation is originally payable"
58
FCRA provides what rights?
-Right to request a copy of credit file/report
-Right to request his/her credit score - indivd. may also request their credit score from the credit bureaus, but it's not free
-Right to Dispute Negative or inaccurate info. The consumer reporting agency must correct or delete inaccurate, incomplete, or unverifiable info. w/in 30 days of receipt of the dispute
-Right to limit prescreened offers
1) Adverse Action Notice
2) Copy of Credit File/REport
3) Right to Request his/her credit score
4) Right to Dispute Negative or Inacc Info
5) Right to limit prescreened offers
59
List situations in which it DOES & DOES NOT need to be retained on credit.
-Negative credit info of more than 7 years must be deleted (late payments, foreclosures, collections, tax lien)
-Bankruptcies, judgements or other public records no more than 10 years must be deleted. Chapter 7 provides for complete liquidation of the debtor's debts while Chapter 13 provides for the debtor to pay back their creditors through a payment plan decided by the court
-UNPAID federal tax liens may be retained on credit reports forever
-CRIMINAL CONVICTIONS remain forever
60
What are some of the limits with FCRA?
-Must limit access to a credit file to ONLY those with legit business need
-May not give out consumer credit info to an employer w/o written consent
-If MLO is running a credit report and sees a fraud alert, he must contact person whos name is on the account at the # provided to the credit bureau
-Min time frame that a consumer reporting agency must include a fraud alert in a consumer's file is 1 year
61
Can an MLO provide credit report?
No; only credit reporting agency
62
FCRA requires each of the consumer reporting agencies to provide an individual with his/her credit report IF in which circumstances?
1) Info resulted in adverse action (denial)
2) Victim of identity theft (fraud)
3) Inaccurate info as a result of fraud
4) On public assistance or unemployed
63
What other disclosures need to be provided for FCRA?
-Summary of Consumer Rights: revised sept 2018, right to obtain and dispute info
-Summary of Consumer Identity Theft Rights: revised sept 2018, rights when a victim of identity theft
-Notice of National Security Freeze Right: *new, must be provided when consumer receives either of the above summaries
64
What is FACTA & what does it allow?
Fair & Accurate Credit Transaction Act. It is an amendment to FCRA (Fair Credit Reporting Act) to PREVENT identity theft, improve resolution of consumer disputes, improve accuracy of consumer records.
It requires when a consumer applies for a home loan, he/she must rcv the Home Loan Application Credit Score Info Disclosure
-Gives consumer their right to one free CR each year from each CR agency, allows consumers to purchase a CR SCORE **you have to pay to get info about CR score
-Range of CR is 300-850
65
Under what section of the FACT Acts directs the Federal Trade Commission to create rules regarding ways to detect, prevent, and mitigate identity theft?
Section 114
66
What is the Section 114 Rules under the FACTA Act?
Red Flag Rules; it requires many businesses & org. to implement a written Identity Theft Prevention Program designed to detect the warning signs/red flags of identity theft in their day-to-day operations. Card issuers to assess the validity of change of address requests. Users of consumer reports to reasonably verify the identity of the subject of a consumer report in the event of discrepancy
67
What is the Red Flag Rule & what are its requirements?
Measured to address identity theft.
-Financial institutions & creditors must implement a written identity theft prevention program
-Credit card issuers must address the validity of change of address request
-Requires creditors & financial institutions to establish an Identity Theft Prevention Program
**Under the FCRA (Reg V)
68
What are the 5 categories that red flags fall into?
1) alerts, notifications, or warnings from a consumer reporting agency
2) suspicious documents
3) suspicious identifying info such as suspicious address
4) unusual use of a covered account (suspicious activity)
5) notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection w/ covered accounts (irregular payment)
69
In what situations can a new CD must be sent and within how many calendar days?
Non-numeric clerical errors & tolerance violations. Must be delivered w/in 60 calendar days following loan closing. Lenders have 60 days to refund any excessive various between the LE & the CD
70
What does SAFE Act stand for?
Secure and Fair Enforcement for Mortgage Licensing Act
71
If an application for credit is DENIED based on the appraisal, ECOA says borrower has how many days to request a copy/Lender has how many days to deliver?
90 days (borrower); lender (30 days)
72
What does HMDA stand for? What Regulation?
Home Mortgage Disclosure Act, Reg C
73
What does RESPA stand for? What Regulation?
Real Estate Settlement Procedures Act, Reg X
74
What does TILA stand for? What regulation?
Truth in Lending Act, Reg Z
75
What does HPA stand for?
Homeowners Protection Act = private mortgage insurance
76
What does HERA stand for?
Housing & Economic Recovery Act
77
What does FACT Act stand for?
Fair and Accurate Credit Transactions Act
78
What does AfBA/ABA stand for?
Affiliated Business Arrangement 1% (not 10%)
79
List reasons for the mortgage meltdown & what caused the crisis? Who's fault?
1) Investors paid higher priced incentives for subprime loans, leading to higher risk loans offered to borrowers
2) Relaxed underwriting standards
3) Unethical appraisers/LOs
4) No-doc mortgage products
80
List some of the processes that happened in the house marketing in the US between 1900s-1930s.
1) Large down payment generally required
2) Most were short-term period & required a balloon payment
3) Constant refinancing
81
What is a mortgage?
A written instrument using real property to secure repayment or debt
82
What is the primary market?
Where borrowers and lenders come together to negotiate terms for mortgages.
83
Name sources in the primary market lenders
1) Mortgage Banker
2) Mortgage Broker
3) Commercial Banks
4) Savings & Loans Association (Thrifts)
5) Credit Unions
6) Finance Companies
7) Mutual Savings Banks
84
What is a mortgage banker?
company, individual, or entity that originates, processes, underwrites, closes/funds, and services mortgage loans
85
What is a mortgage broker?
Company or individ who, for a fee, places loans with lenders, but does not service the loans
86
What are credit unions?
Cooperative financial instit owned & controlled by their members
87
What are Finance Companies?
Specialize in making higher-risk loans at higher interest rates
88
What is a Mutual Savings Bank?
State-Chartered banks that are owned by depositors (Thrifts)
89
What does FCRA stand for?
Fair Credit Reporting Act - Regulation V
90
What is the secondary market? Name some of the investors.
Where existing mortgage loans are bought and sold.
1) Fannie Mac
2) Freddie Mac
3) Ginnie Me
4) The Federal Home Loan Bank System
5) Private Investors
91
What is Fannie Mae? When was it created? What does it stand for?
Created 1938; to assist the housing sector during Great Depression.
-FNMA (Federal National Mortgage Association)
-It is a Govt Sponsored Enterprise (GSE) that acts as a quasi-govt agency for the purpose of making a secondary market for mortgages
-Nation's largest mortgage investor
92
What is Freddie Mac? What was it created? What does it stand for?
Created by Congress in 1970 to provide a secondary market for mtgs originated by savings and loan associations
-FHLMC (Federal Home Loan Mortgage Corp)
93
What is Ginnie Mae? When was it created? What does it stand for?
Created by Congress in 1968; now part of the HUD (Housing Urban Develop)
-Does NOT purchase or sell loans on the secondary market
-It does the same thing as Fannie & Freddie except it is a govt owned entity
-It issues guarantees on bond pools that are compromised exclusively of govt -backed (FHA/DVA/USDA) loans
-GNMA (Govt National Mortgage Association)
94
What does CFPB stand for and what is it? Who created it?
Consumer Financial Protection Bureau; one govt entity to regulate mortgage lending laws
Created by the Dodd-Frank Act & the Consumer Finance Protection Act
95
What offices are now under the CFPB?
1) Office of the Comptroller of the Currency (OCC) - Charters, regulates, & supervises all National Banks
2) Office of Thrift Supervision (OTS) - Supervises, charters, and regulates fed thrift institutions
3) Federal Deposit Insurance Corp (FDIC) - Insures deposits & examine & supervises financial instit
4) Federal Reserve - estab a federal charter for banks to make real estate loans & set up a way to influence rates
5) National Credit Union Admin (NCUA) - Charters & supervises federal credit union
6) The Dept of Housing & Urban Develop (HUD)
7) Federal Trade Commission (FTC)
96
Name some of the laws that are regulated by the CFPB
1) Regulation B: Equal Credit Opportunity (ECOA)
2) Reg C: Home Mortgage Disc (HMDA)
3) Reg F: Fair Debt Collection Practices Act (FDCPA)
4) Reg H: SAFE - state compliance & bureau registration system
5) Reg N: Mortgage Acts & Practices-Advertising
6) Reg O: Mtg Assistance Relief Services (MARS)
7) Reg P: Privacy of Consumer Financial Info
8) Reg V: Fair Credit Report Act (FCRA)
9) Reg X: Real Estate Settlement Procedures Act (RESPA)
10) Reg Z: Truth in Lending Act (TILA)
97
When did Congress pass the RESPA and what did it help?
Real Estate Settlement Procedures Act (Reg X) 1974
-helps consumers become better shoppers for settlement services & to eliminate unnecessary increases in the costs due to kickbacks & places limitation on the use of reserve accounts
98
What terms are used under RESPA?
"settlement", "loan consummation", "doc signing", "closing"
99
What is Record Keeping and under what Act?
Under RESPA; any docs provided must be kept for 5 years from the date of execution
100
What are some of the examples included in Settlement Services?
-Origination of a federally-related mortgage loan
-Mortgage broker services
-anything related to origination, processing, or federal mtg loan funding
-Title Services
101
Regulation X applies to what type of property or properties? It applies to what type of transactions?
Applies to 1-4 unit residential properties (owner occupied)
-Conventional, FHA, VA, govt sponsored, purchase, reverse, assumptions, refis, property improvement loans, equity lines of credit
102
What are some transaction examples of what regulation x does NOT cover?
-all cash sale, rental property trans of more than 4 units, property of 25 acres or more (agricultural), vacant land (unless a dwelling will be constructed or moved onto the property within 2 years), commercial properties, sale where the individ home seller takes back the mortgage, temporary construction loans
103
What is Section 6 in RESPA?
Mortgage Servicing & Mtg Servicing Abuse
-Mortgage servicers have been accused of excessive foreclosure/modification fees, foreclosing w/o proper paperwork, or failing to help ppl stay in homes; therefore, there have been numerous settlements paid by the nations largest mtg servicers to individ & states in connection w/ the servicing of mtg loans
104
What is Forced-Placed Insurance? What are the requirements?
Loan servicers have the right to administer this when the servicer believes that the policy has been cancelled or not renewed
Servicer must notify borrower 45 days before charging borrower
Servicer must sent a 2nd notice 30 days before charging borrower
*Remember: Forced-Placed Insurance protects the lender, not homeowner or possessions of homeowner
105
What is a Qualified Written Request? What are the certain steps that mtg servicers need to take?
Borrower may request info relating to the servicing of a loan when they are having issues with their mtg servicers under RESPA.
QWR imposes a duty to respond to borrowers' inquiries
Steps of deadlines include:
-Borrower complaints to servicers: Loan servicers have 5 days to ackwldge a borrowers' complaint & 45 days to resolve/explain position
-Missed/Delinquent Mtg Payments - Servicers must attempt to speak with delinquent borrowers w/in 36 days after the missed payment
-Servicers must mail/offer mitigation info w/in 45 days of borrowers missed payment
-A servicer cannot file a pre-foreclosure Notice of Default (NOD) until the mtg payment is 120 days late (previously 90 days)
106
What is Section 8 in RESPA?
Prohibits kickbacks, fee-splitting, and unearned fees (upfront/advance fees)
-Prohibits giving or accepting fees, kickbacks, or any thing of value for referrals of settlement service business
- Kickback = "a thing of value" to a 3rd party in return for the referral of a client, customer, or business or REFERAL FEE
"a thing of value" includes gift cards, sports tickets, advertising space and donations to a real estate agent's favorite charity, d/c, others
Ex: If a title company gives you pens, but puts YOUR company's LOGO on it that is a "thing of value" they cannot do that
107
What is Section 9 in RESPA?
Title Insurance
It is illegal for a property seller to require the buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale.
If violated - the buyers may sue a seller who violates this provision for an amount 3 times (TREBLE DAMAGES) all title insurance charges
108
What is Section 10 in RESPA?
Sets limits on the amt a lender may require a borrower to put into an escrow acct
Escrow acct - holds $ for purposes of paying HOI that mtg lenders collect every month along w/ mtg payments
The lender CANNOT require the borrower to deposit MORE THAN 1/12th the annual amt into an escrow acct of the taxes, insurance/other charges
Lenders may require a cushion of 2 months (1/6 of a year) of the total disbursements for the year @ closing
109
When is an escrow account analysis required?
Once a year & borrower must be notified of any shortages. Any excess of $50/more in escrow must be returned to the borrower (assuming not late, in that case then lender is not required to return excess)
110
What are some of the loan programs that require escrow accounts?
A mortgage loan that includes mortgage insurance, All govt-insured/guaranteed loans (FHA/DVA)
111
What is the penalty to violate RESPA?
-Fines up to $10K and/or
-imprisonment up to 1 year
Liability up to 3 times the amt of the charge paid for the service (civil lawsuit)
112
Which Disclosures needs to be sent at or within 3 business days of the application?
INITIAL DISCOSURES INCLUDE:
Home Loan Toolkit (RESPA) - "Know Before You Owe" Booklet. It replaced the HUD Special Info Booklet due to the TILA-RESPA Integrated Disclosure rule when dealing with PURCHASES ONLY
Loan Estimate (TILA): Formally the GFE (Good Faith Estimate)
*It is a TILA document, but WHEN you get it is RESPA
Mortgage Servicing Disclosure Statement (RESPA) - LENDERS INTENTION, provides notice regarding the lender's practices of transferring/retaining the servicing of the loan. Serving requires process of collecting PITIA, sending required notices & handling borrower inquiries
List of HUD Approved Home Counselors (RESPA)
113
Which Disclosures need to be sent Before Settlement?
Affiliated Business Arrangment (AfBA) Disclosure (RESPA) - exists when the referring party has a greater than 1% ownership interest in the business receiving the referral. Must be retained for 5 years.
Closing Disclosure: 3 days prior to consummation (TILA) formally known as the HUD
114
Which Disclosures need to be sent AT Settlement?
Finalized Closing Disclosure (TILA) - separate forms will be prepared for the borrower & seller
Initial Escrow Statement (w/in 45 days of closing) RESPA - itemizes the estimated taxes, ins prem, escrow acct. Usually given at settlement, but lender has 45 days from settlement to delivery. Sometimes referred to as the "HELLO LETTER"
115
Which Disclosures need to be sent AFTER Settlement?
Annual Escrow Statement (RESPA - RESPA SECTION 10) - summarizes escrow account deposits & payments during the year
Servicing Transfer Statement (RESPA) - required if the servicer sells/assigns the rights to another servicer
The loan servicer must notify the borrower 15 days before the date of a serving transfer, AKA "goodbye" letter. Statutory 60 day "grace period"
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What are the 6 items needed to make up a complete application?
1) Name(s) of borrower
2) SSN for each borrower
3) Gross monthly income of borrower(s)
4) Loan Amount sought
5) Subject property address (acceptable to use TBD/UNK) A lender cannot use N/A on LE, MLO should rather leave it blank than insert another phrase
6) Estimate of property value
**Remember: ALIENS
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When do initial disclosures need to be provided?
At or w/in 3 business days of COMPLETE application.
Exceptions: if borrower w/draws the application or the lender turns down the loan before the end of the 3 business-day period.
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Until LE and other required disclosures are delivered to borrower, a borrower may not be charged other than what fee?
Credit Report Fee
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What does TILA stand for & what is the purpose?
Truth In Lending Act; administered by the CFPB, implemented by Federal Reserve Board
Purpose is to promote the informed use of consumer credit. It requires lenders to disclose the COMPLETE COST OF CREDIT to consumer loan applicants & disclosure of the APR (Annual % Rating) in advertising.
The ONLY FEE that may be collected prior to these disclosures are fees for CREDIT REPORTS
MLOS & servicers are prohibited from charging a fee for the preparation of the TILA Disclosures
-Establishes a 3 bus. day RIGHT OF RECISSION in certain transactions (HELOC/REFI)
-Regulates advertising of consumer loans
-Applies when credit is payable by written agreement in MORE than 4 installments
*Creditor must return any $ collected to the loan WITHIN 20 days
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What 2 general areas are TILA disclosures required? What are the penalties? How many years to be kept?
1) When creditors offer credit but before the transaction is consummated
2) When credit terms are advertised to potential consumers
Penalties: if given false/inaccurate disclosure info, consistently understates the APR, or fails to comply with Reg Z. Can be fined up to $5,000 and be imprisoned for up to 1 year or both
-Disclosures must be kept for at least 2 years. Exceptions: Lenders must retain the CD for 5 years and the LE for 3 years
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What specific disclosures are required by Regulation Z?
-LE & CD
-Consumer Handbook on Adjustable Rate Mortgage (CHARM) within 3 bus. days of an application (only for ARM loans)
-WHEN YOUR HOME IS ON THE LINE disclosure - within 3 bus. days of an app (ONLY FOR HELOC/REFI)
-Notice of Right to Rescind: All individ w/ ownership interest should receive 2 copies of the right to rescind
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What is APR? AKA?
Annual % Rate AKA "Effective Rate"
It tells a borrower the total cost financing a loan in % terms as a relationship of the total finance charges to the total amt financed. It reflects certain finance charges associated w/ the loan, spread out over the life of the loan.
Other words for Interest Rate is "Note Rate or Nominal Rate"
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What is Finance Charge?
Regulation Z defines the finance charge as the cost of consumer credit as a dollar amt. Includes any charge payable by the consumer bc of the extension of credit
It is the total amount of interest and loan charges you would pay over the entire LIFE OF THE LOAN
purposes of calculating the APR: Interest, time, price differential and any amount payable under an add-on or discount system of additional charges. Also, may include service, transaction, activity and carrying charges, including any charge imposed on a checking or other transaction account to the extent that the charge exceeds the charge for a similar account without a credit feature. Points, loan fees, assumption fees, finder's fees and similar charges are also considered finance charges.
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TILA defines business day as?
All calendar days EXCEPT Sundays and legal public holidays WITH the exception of the INITIAL LE, which defines as a bus day as ANY day that the creditors office is open for business
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What is the Mortgage Disclosure Improvement Act (MDIA)? AKAs?
AKA 3/7/3 Act
States that initial disclosures are required w/in 3 bus. days of receipt of completed application
Earliest consummation is on the 7th bus. day after disclosures delivered/mailed
If redisclosure is required, consumer must rcv corrected disclosure at least 3 bus. days before loan can be consummated
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What is APR Accuracy & Redisclosure?
The APR is generally considered accurate if it does not vary above or below the APR initially disclosed by more than:
-1/8% (.125) for a regular transaction (30-year fixed/traditional mtg)
-1/4 (.25) for an irregular transaction (not a 30 year fixed/traditional mtg)
An irregular transaction includes one or more of the following: multiple advances, irregular payment periods/amts
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When does the Right of Rescission apply and when does it not?
It applies to any credit transaction involving estab of a security interest in a principal residence such as:
-Refinances
-Home Equity Loans/Equity Line of Credit
It DOES NOT apply to:
-Purchase Loans
-Construction/Commercial Loans
-Loans on vacation/second homes
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What are some of the consumers rights to rescind?
-If there are multiple borrowers, it only takes 1 borrower to rescind
-If a borrower rescinds, the borrower is entitled to a full refund of any funds provided to escrow w/in 20 days
-Creditors must inform consumers of their right to rescind by providing 2 copies of a Notice of Right to Rescind document to EACH consumer entitled to rescind
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Consumers may have the right to an extended rescission period of up to 3 years if ...
-The creditor fails to property notify consumers of their right to rescind
-The creditor does not provide the consumer with the required material disclosures
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What is HOEPA? Penalty?
Home Ownership & Equity Protection Act
It addresses certain deceptive & unfair practices in home equity lending
It amends the TILA and establishes requirements for certain loans with rates & fees above a certain threshold.
TILA & HOEPA require additional disclosures, & limitation on loan terms apply to certain loans w/ high interest rates &/ high loan fees
Lender who violates may be sued by consumer or consumer may rescind loan for up to 3 yrs
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How do we figure out if the loan is a high-cost loan?
Compare our loan's APR against the Average Prime Offer Rate (APOR)
-The first lien on the property has an APR that exceeds the value of the APOR index (as of the loan lock in date) by more than 6.5 % points
-A 2nd mtg has an APR that exceeds the value of the APOR Index (as of the loan lock in date) by more than 8.5% points
-5 percent of the total loan amount for a transaction with a loan amount of $20,000 or more
-Adjusted points & fees dollar trigger for high-cost mtgs in 2021 will be $1,103
Lesser of the 8% of the loan amount or $1,000 transaction for a loan that has less than $20,000 loan amount
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What is HOEPA, Section 32?
HIGH COST
It is a closed end loan or open-end credit plan secured by a borrower's principal residence
HOEPA provisions must be complied w/ after the triggers for a "high-cost loan" have been met.
It includes purchase-money mtgs, refi, closed-end home equity lines of credit (HELOC)
HOEPA does NOT regulate construction/reverse mtgs
It must meet the same criteria as Section 35 but it also include 3 additional:
1. APR is higher than the APOR by more than 6,5% on the 1st lien
2. exceeds 8.5% on the 2nd lien
3. Total lender/broker points and fees are greater than 5% of the total loan amount (8% for loans less than $22,052)
4. The adjusted points & fees dollar trigger high cost mtgs in 2021 will be $1,103
3. A prepayment penalty exceeds 2% of the prepaid amount or occurs more than 36 months after closing
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What are HPMLs? AKAs?
Higher-Price Mortgage Loans AKA "Section 35 Loans"
They are closed-end mtg loans that are secured by the borrower's principle dwelling.
These are loans where the APR of a mortgage loan exceeds the avg prime offer rate by:
-1.5% for a 1st mtg lien
-2.5% for a 1st lien Jumbo loan
-3.5% for a subordinate mtg lien
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If loan is a HPML, then what does the LO must establish?
**Reminder: HPML stands for High Priced Mortgage Loan
-The borrower's ability to repay the mortgage loan
-An escrow acct for taxes & insurance for the 1st 5 years
-A full appraisal with a physical visit of the interior of property performed by a licensed appraiser
-An additional appraisal MAY be required if the property was acquired less than 180 days prior to the sale contract
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What items does the HOEPA prohibts?
-Balloon payments
-Negative amortization
-Prepayment penalties
-Acceleration of debt. Strictly prohibited. Includes any provision that would enable the creditor to call the loan before maturity
-Refinance a HOEPA loan into another HOEPA loan within the 1st 12 months of origination unless the new loan is in the borrower's best interest
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What are the advertising disclosure requirements under TILA?
Regulation Z provides that when certain loan terms, called trigger terms, are shown in advertisement, several other terms must be disclosed as well TRIGGERING TERMS = ANYTHING THAT HAS A #
if there's a # on the APR then no addtl disc required
Examples of triggering terms:
20% down, pay only $700/month, 360 monthly payments, 30 year financing avail, 1% finance charge
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When using trigger terms, advertisement must also state what terms?
Must state ALL terms: amount of % of the down payment, terms of repayment, APR (and spell it out)
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What are examples of DO NOT TRIGGER terms?
5% APR loan available, easy monthly payments, FHA financing available, 100% VA financing available, terms to fit budget
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What are some prohibitions in advertising?
Misrep about govt endorsement, misleading use of the borrower's current lender's name, misleading use of the term COUNSELOR, misleading foreign-language
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What are some prohibited practices in appraisals under TILA?
-Implying to an appraiser that current/future retention of the appraiser depends on the amt at which it values
-Excluding an appraiser from future engagement
-Telling an appraiser a minimum reported value of consumer's dwelling that is needed
-Failing to compensate an appraiser
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What are some practices that are NOT prohibited in appraisals under TILA?
-Asking appraiser to consider addit. info ex) comparables
-Correct factual errors
-Obtaining multiple appraisals of consumer's dwelling as long as the creditor adheres by selecting the most reliable (not just bc highest value)
-W/holding compensation for breach of contract/performance of services as provided by contract
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What is the Loan Originator Compensation Rule? How many years do they keep record from creditors?
-Prohibits creditors from compensating MLOs based on the loans interest rate/other terms associated w/ the rate/terms of the loan
-Prohibits against dual compensation - restricts an LO of being paid by either the borrower OR the lender, BUT NOT BOTH
-LO organizations must keep record of payments from a creditor & payments to indiv. originators for 3 years
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What is the Ability-To-Repay (ATR) Mortgage Rule?
It requires lenders to make a reasonable, good-faith determination before or when a loan is consummated, that the borrower has a reasonable ability to repay loan
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What 8 types of information must creditors consider when establishing a borrower's ability to repay a mtg loan?
1) Current/reasonably expected income/assets
2) Current employment status
3) Borrower's Credit History
4) Monthly mortgage payment for this loan
5) Monthly payment on any simultaneous loans secured by the same property
6) Monthly payments for property taxes & insurance
7) Other debts like alimony, child support obligations
8) Monthly debt-to-income ratios
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What are the requirements of Qualified Mortgages?
-Full Documentation (No-doc/NINA loans ineligible): loans where the creditor does not verify income/assets
-No excess upfront points & fees - max 3% of the loan amount
-Cap on how much income can go toward debt - max 43% DTI
-Max loan term of 30 years
-Prepayment penalties prohibited EXCEPT for certain fixed-rate, qualified loans
-No risky or toxic features: No negative amortization, no balloon payments, no interest only loans
-For ARMs - must be underwritten as a fully amortizing loan at the max interest rate that the loan can adjust to in the 1st 5 years
-No TEASER rates
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What does GLBA stand for? What year? Under what Regulation? What does it include & pertain to?
Gramm-Leach-Bliley Act AKA Financial Modernization Act of 1999.
Under Regulation P
Includes provisions to protect individ's personal financial info.
Pertaining to its compliance it includes safeguard rules, pretexting rules, & financial privacy rules (SPF)
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What is a safeguard rule, under what act?
A WRITTEN SECURITY PLAN to protect the confidentiality & integrity of personal consumer info. Under GLBA Act.
The plan is to PROTECT data & employees be trained on the requirements of the plan
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List some of the written safeguards policy that it must follow.
Safeguard is under what Act?
1) Ensure security & confidentiality
2) Protect against anticipated threats or hazards
3) Protect against unauthorized access that could harm or inconvenience consumers
**Under GLBA
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What are Pretexting Provisions? Under what act?
Prohibits the use of FALSE PRETENSES, including fraudulent stmts & impersonation (pretexting) to obtain consumers' personal financial info, such as bank balances
It prevents other to "pretend" to be you. They put "security questions"
Under GLBA Act
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What is the Financial Privacy Rule? Under what act?
Governs the collection NON-PUBLIC INFO (not widely available known) & how it can (& cannot) be shared w/ affiliates
Under GLBA Act
They have to give you their customers privacy policies to explain the financial institution's info collection & sharing practicies. customers can choose to opt-out or not
Customer must rcv a financial institution's privacy notice EVERY YEAR as long as the customer relationship last
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What is the different between a "consumer" vs a "customer"? Under what Act?
A consumer is someone who obtains a SPECIFIC product/service for personal use. Example, going into a 7/11 and buying something.
A customer has an ONGOING significant relationship
Under GLBA act
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What is the MARS rule? What does it stand for? Under what Regulation?
Mortgage Assistance Relief Services. Under Reg O
Helps to protect distressed homeowners from foreclosure-prevention scams
It deals with loan mod and loan mod scams, deals with Federal Trade Commission
1) Fees may not be collected until a written agrmt from the lender that the loan terms may be modified and the customer ACCEPTS it. You can only get paid at the end and CANNOT be collected up front. MARS prevent UPFRONT fees.
2) Negotiator CANNOT advise borrowers to stop making mtg payments
3) Negotiator CANNOT interfere with the communication btwn the borrower & lender. Example: agents saying do not pick up the calls from your lender
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What is the DNC Registry? Signed into what year? Under what Legislation?
DO NOT CALL REGISTRY
Signed into law in 2003, part of the Telemarketing Consumer Fraud & Abuse Prevention Act and the Telemarketing Sales Rule
It's intended to allow consumers to restrict unwanted sale calls from coming into their homes
Today, the Fed Trade Commission, Fed Communications Commission and the state enforce the National DNC Registry
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List what companies should do to keep them from violating the DNC regulations.
A company must maintain BOTH national & internal (company) lists of customers & prospects, must update regularly
Both the national DNC list & company's internal must be updated every 31 days, and records to doc this must be maintained for 24 months
Calls must be placed between 8am-9pm in consumer's time zone
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What is the penalty if you violate DNC?
Can be fined up to $46,517 PER CALL (EACH CALL, NOT EACH DAY)
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What is the DNC Safe Harbor Rule?
Everybody makes mistakes, and companies WONT be held liable if:
1) Written do not call policy
2) train employees on a regular basis regard policy
3) maintain an internal list who requested not to be called
4) access the register every 31 days (doc required)
5) must provide call was made in error
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What is the EBR? Relates to what?
Established Business Relationship; relates to the DNC
If you have actually closed a deal with this person then you have an EBR, some of the DNC list does not apply. It can be established in one of 2 ways:
1) 18 months after the consumer's last purchase/transaction. Even if the person is on the DNC list, bc you closed business with them an EBR, you can call them for 18 months preceding a telemarketing call
2) 3 months after the consumer makes an inquiry/submits an application even if they are not on DNC preceding a telemarketing call
**If a consumer SPECIFICALLY ASKS that they do not want to be contacted, you have to honor
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What is the USA Patriot Act? What does it stand for?
Passed after the 9/11 in 2001 terrorist attack
It gives law enforcement agencies broad powers to investigate, indict, & bring terrorists to justice.
USA PATRIOT stand for Uniting & Strengthening America by Providing Appropriate Tools Required to Intercept & Obstruct Terrorism
It deters & punishes terrorist attacks through enhanced law enforcement & strengthened money laundering prevention
-It sets min standards for verifying customers' identities
-Required lenders to verify name, address, DOB, and SSN of all applicants
-Requires the estab of ANTI-MONEY laundering programs
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What is the MAP? Under what Regulation?
How many years does copy of adv?
Mortgage Acts & Practices, under Regulation N
Prohibits FALSE OR MISLEADING Commercial Advertising for mtg products, cannot contain any MATERIAL MISREPRESENTATIONS, a fact is "material" if knowledge of the truth would lead reasonable consumers to consider an alt option in accomplishing their goals
Deals with advertising and commercial products usually AIR ways like internet, radio, billboards, print & television advertising
-Regulated by the CPFB
Copy of all advertisements MUST be kept for at least 2 years
Example) "5 year fixed rate" when it is actually an adjustable-rate loan and only has initial rate period of 5 years
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What does BSA/AML stand for & what does it require? How many yrs to keep?
Bank Secrecy Act/Anti-Money Laundering, Congress passed this in 1970. First laws to fight money laundering in the US
It requires financial institutions to institute a compliance program to detect money laundering & suspicious activity
Requires FINANCIAL INSTITUTIONS (bank) to keep records of cash transactions that EXCEED $10K & report any suspicious activity. Example: deposit, withdraw or transport when you go to the bank
LOs required to report any suspicious activity that might be any suspicious activity if it EXCEEDS $5K
It has been amended several times including provisions in the USA PATRIOT ACT
The required SAR must be filed no later than 30 calendar days after the date of initial detection
Bank must maintain a copy of any SAR filed and all supporting documentation for 5 years from date of filing
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What is the purpose of the E-Sign Act? What are it's requirements?
Electronic Signatures in Global & National Commerce Act
Establishes that electronic signatures are valid. You cannot force someone either, need to obtain permission.
Requirements:
-Customers have a right or option to rcv info on paper
-Identify whether the consent relates to a partic trans or to ongoing diclosures
-Consumer has the right to w/draw consent as well as the consequences
-Describe procedures for updated the consumer's contact info
-Outline the software requirements for accessing & retaining records
-Explain how to obtain paper disclosures after consent has been given & any associated fees
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What is HERA?
Housing & Economic Recovery Act; It is a major housing law that serves multiple purposes. Law that created the SAFE Act
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What is a key component of HERA? What does it do?
Housing & Economic Recovery Act
Title V, the Secure & Fair Enforcement for Mortgage Licensing Act of 2008 (or SAFE ACT)
It requires states to implement SAFE-Compliant MLO licensing that meet certain min requirements through the National Mortgage Licensing System & Registry (NMLSR)
164
What 2 entities created NMLS-R?
1) The Conference of State Banks Supervisors (CSBS)
2) The American Association of Residential Mortgage Regulators (AARMR)
165
What are the objectives of the SAFE Act?
> To provide a UNIFORM license application & requirements for state-licensed LOs
> To provide increased accountability & tracking
> To streamline the licensing process & reduce regulatory burden
> To enhance consumer protections & support anti-fraud measures
> To provide a licensing & database
> Provide consumers with free, easy-to-access info about MLO's employment history, public discplinary
> Facilitate responsible behavior
> Provide comprehensive training & examination requirement
> Have consumers file a complaint against you with an NMLS
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A balloon loan is defined as:
A loan that has specific amortization period but matures (meaning final payment is due) prior to the it fully amortizes
167
When may a LO NOT issue revisions on a LE?
If they later discover technical errors, miscalculations, or underestimations of charges
168
When may a LO issue revisions on a LE?
If they are valid changed circumstances like:
1) Resulting in increased charges
2) Rate Lock
3) Change in eligibility: impacts the creditworthiness of the applicant or the value of the property
4) Consumer-requested revisions: changes to loan terms or settlement
5) Delays caused by the consumer: if applicant waits more than 10 business days after creditor provides LE before indicating his/her interest in proceeding
6) An extraordinary event beyond the control of any interested party ex natural disaster
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When may a LO issue revisions on a LE?
If they are valid changed circumstances like:
1) Resulting in increased charges
2) Rate Lock
3) Change in eligibility: impacts the creditworthiness of the applicant or the value of the property
4) Consumer-requested revisions: changes to loan terms or settlement
5) Delays caused by the consumer: if applicant waits more than 10 business days after creditor provides LE before indicating his/her interest in proceeding
6) An extraordinary event beyond the control of any interested party ex natural disaster
7) Unexpected event specific to the consumer ex) title insurer goes out of business
8) A change or inaccuracy in the info consumer provided
9) New info specific to the consumer or transaction
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Assumption
Indicates whether or not a subsequent purchaser of the property will be permitted to assume the loan on its original terms
on LE, it states "if you sell or transfer this property to another person, we will not allow assumption or not"
171
What is the purpose of RESPA?
Helps consumers become better shoppers for SETTLEMENT SERVICES
172
What does TRID stand for
TILA RESPA Integrated Disclosure
*RESPA deals with TIMING. WHEN certain items have to be given out
Section 1098 & 1100A of the Dodd-Frank Wall Street Reform & Consumer Finance Protection Act (Dodd-Frank Act) directed to combine certain disclosures that was under TILA & RESPA
173
Who is responsible in providing the statement (CD) to the borrower? Who is responsible in selling to the seller?
The creditor or the lender to the borrower
Settlement agent to the seller
174
How long is the LE good for?
10 Days
175
APR
AKA Effective Rate
Costs over the loan term expressed as a rate. This is NOT your interest rate.
It is the cost of borrowing & the total amt financed
176
TILA deals with?
Credit, APR, and Advertising.
177
If a lender issues a Qualified mortgage, it receives what?
It receives "safe harbor" (legal protection) if the borrower later goes into foreclosure
178
Who is responsible in sending out the final CD to the client?
The lender
179
Credit reporting agencies may NOT report outdated negative credit info. List them.
1) Neg. credit info. more than 7 years
2) Bankruptcies more than 10 years
3) Criminal conviction - does not expire
4) UNPAID tax liens - will stay in there forever. Paid tax liens will stay in there for 7 years.
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Credit Freezes (Under what Section, Under what Act?)
Under FACTA, Section 112
Allows consumer to place a credit freeze on a credit file in order to prevent fraud info from showing on credit report.
Must keep fraud alert in file for 90 DAYS
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Truncation (Under what Section, Under what Act?)
Under FACTA, Section 113 *Remember T starts with THIRTEEN)
Prohibits businesses from printing MORE THAN 5 DIGITS of any customer's credit/debit card # or expiration date on receipt
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Security & Disposal (Under what Section, Under what Act?)
Under FACTA, Section 216.
Requires business to burn or shed papers that contain consumer report info
Destroying or erasing elec files or media so that info CANNOT be recovered, and LOCKING up ALL PENDING loan docs at the end of workday
183
Penalty of FACTA
Fined up to $5,000 or imprisonment for 1 year, or both
184
Difference between CRA & HMDA
CRA - meets CREDIT needs
HMDA - meets HOUSING needs
185
Mortgage Serving Disclosure
standard form used to disclose to the borrower whether the lender intends to retain the mortgage servicing of the loan(handling the monthly payments and paying the taxes and insurance obligations). This must be delivered to the borrower at or within three days of the loan application.
186
Initial Escrow Statement
Lender has 45 days from settlement to deliver, AKA "HELLO LETTER"
187
TIL does not require what to appear?
Interest Rate
188
Creditor
A person, including a lender and a table funding mortgage broker, that regulary extends credit that is subject to a finance charge or is payable by written agreement in more than 4 installments. They may also be a credit card issuer
189
Who took over Freddie & Fannie in 2008? Who allowed it?
FHFA - Federal Housing Financial Admin; HERA
190
Who enforces FCRA
FTC (Federal Trade Commission)
191
Who enforces TILA
CFPB
192
Who enforces RESPA
CFPB
