Last Minute Deck Flashcards
What are the different forms and what are they for?
- 1003 - URLA - Loan Application
- 1004 - URAR Appraisal - Form 442
- 1005 - VOE Payroll - Paystubs
- 1006 - VOD Bank Balance - Bank Statements
- 1007 - SFR Rent Schedule
- 1008 - Transmittal Summary - Sent to UW
- 1009 - Reverse Mortgage
What are the different sections of the 1003 URLA?
- Section 2: Purpose of the Loan - Property Info
- Section 3: Borrower Information
- Section 4: Employment
- Section 5: Monthly Income/Housing Expense
- Section 6: Assets and Liabilities
- Section 7: Details of Transaction
- Section 8: Declarations
- Section 9: Acknowledgement and Agreement
- Section 10: HMDA Reporting
What items makes a complete loan application?
ALIENS
- Address
- Loan Amount
- Income
- Estimated Value of Home
- Name
- Social Security
What are the different flood zones, risks, and insurance requirements?
- High-risk – Zones A and V (insurance is mandatory)
- Moderate – Zones B and X (insurance is optional)
- Low-risk – Zones C or X (not required)
What is property flipping vs. property flopping?
Flopping is the latest in mortgage fraud, in which sellers actually want as low a price as possible. Then an accomplice can flip the home for a big gain. Flipping is when a con artist buys a property with the intent to re-sell it an artificially inflated price for a considerable profit, even though they only make minor improvements to it.
What are the conditions/features of a HCML (HOEPA)?
- 6.5% First Lien 50K+
- 8.5% First Lien 50K or less
- 8.5% on a subordinate lien
- Must see HUD Counselor
- Must have ATR
- No Prepay penalty
- No Balloon payment
- Can include Variable Interest Rate
What are the conditions/features of a HPML (TILA)?
-1.50% - first lien loans - non-jumbo
-2.5% - Jumbo first -lien loans
-3.5% - Subordinate Liens
-Require Escrow Tax & Hazard ins.) for the first 5
years
-No Prepayment Penalty (unless in
the first 2 years)
-Must have ATR (Ability to Repay)
What does RESPA NOT deal with?
- Bridge Loans
- Construction Loans
- Temp Financing
- Commercial Property
- Vacant Land (unless it will be built on within 2 yrs
- 25+ Acres of Land
- Rental Units 4+
- All Cash Sales
What does TRID does not apply to?
- HELOC
- Reverse Mortgage
- Mobile Homes not secured by real estate
What are all of the initial disclosures?
- K/H - Know before you owe handbook
- A - AfbA
- M - Mortgage Servicing Disclosure
- L - List of HUD counselors (10)
- L - Loan Estimate
- W - When your home is on the line
- GFH/HUD (Non-Purchases)
- No K/H or LE for Reverse Mortgages*
What are the RESPA Disclosures and when must they be sent?
- K/H - Know before you owe handbook -> Initial
- A - AfbA -> Initial (at time of referral)
- M - Mortgage Servicing Disclosure -> Initial
- I - Initial Escrow -> Give at closing or within 45 days
- L - List of HUD approved counselors (10) -> Initial
- A - Annual Escrow -> Done annually
- S - Servicing Transfer Disclosure - HELLO -> 15 days prior to transfer/60 days grace. No Credit Ding and No Late Fee
- GFH/HUD (Non-Purchases) -> Initial - Reverse
What are the TILA Disclosures?
- B - Ballon Notice
- R - Right to Recession
- A - ARM disclosure” Given 60 days prior
- W - When your home is on the line Initial
- L - Loan Estimate
- C - CHARM
- C - CD (Includes Partial Payment Policy)” Initial
- T - Transfer of Mortgage Notice.(ownership) Other - 30 days Prior
How long must docs be kept with a specific lender or agency?
How long to keep docs
- TILA docs 2 years
- MAP - 2 years/24 months
- Escrow Cancellation - 2 Years
- Partial Payment Policy - 2 Years
- MCR - 2 years
- DNC Documents - 2 Years
- ECOA - 25 Months
- Loan Compensation - 3 years
- LAR – 3 years - Due in March
- LE - 3 years
- CD - 5 years
- SAR – 5 years
What are the 4 main indexes?
- PRIME
- COFI
- LIBOR
- COSI
What documents must you put your NMLS number on?
- 1003 URLA
- Promissory Note Mortgages
- Advertisements
- Trust Deeds
What are the conditions for a Qualified Mortgage?
- 3% Points & Fees Max, & ATR
- 43% Ratio
- PP Penalty limited to first 3 years on fixed rate QM not over 30 years
- No Toxic Features - No Balloon, No Interest Only, No Neg Am
- Protects Lender
What determines whether a seller has the Ability to Repay? What is looked at?
MICE DOES have the ATR
- Monthly Mortgage
- Income/Assets
- Credit
- Employment
- Debt to Income DTI
- Other Debt
- Expenses - Monthly
- Simontaous Mortgage
What agencies enforce FCRA, ECOA, TILA, and RESPA?
- FCRA (1970) is enforced by Federal Trade Commision
- ECOA (1974) is enforced by CFPB
- TILA (1968) is enforced by CFPB
- RESPA (1974) is enforced by CFPB (used to be HUD)
What agencies/regulations implemented/created the DNC, TILA, HMDA, and the Red Flags Rules?
- DNC (Do Not Call) - Created by FCC & FTC
- TILA is implemented by Federal Reserve Board
- HMDA (1975) in Implemented by - Federal Reserve Board
- Red Flag Rules created by FTC & FACTA
When did the Civil Rights Act become the Fair Housing Act?
Civil RIghts Act of 1866 became Fair Housing Act in 1968
What items on the Loan Estimate that have 0% Tolerance?
0% Tolerance = TRAIL T - Transfer Taxes R - Report (Credit) A - Appraisal I - Interest L - Loan Origination
What items on the Loan Estimate that have 10% Tolerance?
10% Tolerance
- Gov’t recording fees
- Title Insurance
What items on the Loan Estimate that have no tolerance?
No Tolerance (3rd party)
- Hazard Insurance
- Termite Inspection
- Title Insurance
- Per Diem Fees (pre-paid mortgage interest)
What fees/costs are included in APR?
Included in APR: • Origination fees • Discount points • Tax service fees • Underwriting fees/Processing fees • Prepaid/per diem interest • Mortgage insurance premium • Mortgage insurance impounds/reserves • Warehouse fees • VA funding fees • FHA UFMIP • Buydown • Flood certification fees • Closing fees • Courier fees (Lender)
What fees/costs are NOT included in APR?
NOT included in APR = ENACTT E - Escrow N - Notary Fee A - Appraisal C - Credit Report T - Termite Inspection T - Title Insurance
What do prepaid finance charges include?
PREPAID FINANCE CHARGES INCLUDE:
- Loan origination
- Discount points
- Commitment fees
- Underwriting fees
- Processing fees
- Tax service fees
- Courier fees (if paid to creditor)
- Buy-down funds
- Prepaid interest
- Any prepaid PMI, FHA UFMIP, VA funding fee, or USDA guarantee fee
What do prepaid finance charges NOT include?
FINANCE CHARGES DO NOT INCLUDE
- Points paid by the seller
- Bona fide and reasonable fees
- Security interest charges (if itemized and disclosed)
- Credit Report fee
- Appraisal fee
- Notary fee
What are the different RESPA Sections?
RESPA Sections: 6 - Mortgage Servicer & Abuse 8 - Fee Splitting/Kickbacks/Unearned Fees 9 - Title (Treble Damages) 10 - Annual Escrow Analysis 11 - Appraisals
How soon must a Lender respond to a Qualified Written Request (QWR)?
Qualified Written Request (QWR)
- Lender acknowledge request by 5 business days
- Seek to resolve the issue/concern within 30 days
15 day extension if needed in connection to notices of error submitted by the borrower
What are the main Loan Estimate Facts?
Loan Estimate Facts
- Available for 10 business days
- Only place to find the Rate Lock
- Old GFE + Initial TIL = LE
- Must be delivered or mailed no later than (3) three business days after a loan application is submitted.
- Revised Loan Estimate is received at least four (4) business days prior to consummation of the mortgage
- The creditor is ultimately responsible for the delivery of the LE to the borrower
What is a note?
This is an unsecured promise to pay back the lender. A promissory note provides the financial details of the loan’s repayment, such as the interest rate and method of payment.
What is the relationship between a mortgage, deed, and trust?
A promissory note is a promise to pay and the lender retains it while the deed of trust/mortgage gets recorded at the courthouse. Since a promissory note is not secured to satisfy the transaction, a mortgage (aka the security instrument) is needed to attached the note to a specific property (as collateral). A mortgage specifies the procedure that will be followed if the borrower doesn’t repay the loan.
What are the 5 types of Liens and are they Voluntary or Involuntary?
- Mortgage = Voluntary
- Attachments = Involuntary
- Judgements = Involuntary
- Mechanics Liens = Involuntary
- Tax Liens = Involuntary
