Laws Flashcards
RESPA does not apply to…
vacant land and temporary financing, such as bridge loans and construction loans.
RESPA does not apply to properties containing…
25 or more acres (agricultural property).
According to RESPA Section 6 a creditor may not seek judicial foreclosure or a trustee’s sale action for at least
120 days for a borrower who is delinquent.
The lender must provide the borrower with a list of
(10) HUD approved counselors.
Standard form used to disclose to the borrower whether the lender intends to retain the mortgage servicing of the loan
Mortgage Servicing Disclosure
A “valid changed circumstance” is defined under RESPA as:
An Act of God, New information regarding the consumer, Information regarding the consumer’s qualification
The lender has _____ after the closing to refund to the borrower any portion
of the charges that exceeded the acceptable amount of a stated tolerance level.
60 Business Days
TRID rules do not apply to…
HELOCS, reverse mortgages, mortgages for mobile
homes not secured by real estate.
The Rate Lock information is ONLY found on:
the loan estimate
The main purpose of RESPA is to help consumers become better shoppers for:
Settlement services
TILA is administered by the
Consumer Financial Protection Bureau.
TILA Disclosers
disclosure of financing charges, distribution
of the Consumer Handbook on Adjustable-Rate Mortgages (CHARM) booklet, and the
right of rescission.
Is required to be provided to the
borrower if he/she received a Home Equity Line of Credit (HELOC) or Home Equity Line of Credit Loan.
“When Your Home is on the Line” disclosure
Requires that entities that purchase or acquire
mortgage loans notify the borrower and provide the name, address and telephone number of the new owner of the mortgage, within 30 days of acquisition.
The Transfer of Ownership Disclosure
The Transfer of Ownership Disclosure only applies to :
primary mortgage.
The APR is generally higher than the:
Note Rate
A fee the buyer would not pay if it were a cash deal.
Finance Charge
A loan will be considered a High Cost (Section 32) loan if its APR exceeds the APOR by more than
6.5% for a first lien of $50,000 or higher, 8.5% on a first lien less than $50,000, and or 8.5% for a subordination lien
A loan will be considered a High Priced (Section 35) loan if its APR exceeds the APOR by more than
1.5%, 2.5% for jumbo first-lien loans, and 3.5% for
subordinate liens.
HIGH COST home loans have the following restrictions:
most balloon mortgages are prohibited, the borrowers must prove an ability to repay the loan, and the borrower must speak to a HUD-approved housing counselor.
Penalties for violation of TILA
$5,000 per day for a single violation, $25,000 per
day for reckless violations, $1,000,000 per day for knowingly violating TRIDrules.
Some fees ARE NOT included in the prepaid finance charges used in APR calculations:
Title Insurance Escrows for taxes and insurance Notary fees Appraisal fees Termite inspection fees Credit report charges
Once an Application, as defined, is received, creditors are obligated to
Issue the loan estimate
According TRID, a lender or broker may not charge the borrower anything but a reasonable credit report fee until the borrower…
has received the Loan Estimate and expressed intent to proceed.
A loan originator should not ask an applicant how many children do they have (or plan to have) – the proper way to obtain this information is…
“How many dependents do you have?”
ECOA requires credit bureaus to keep separate files on…
married spouses, if requested
ECOA notification of adverse action (denial letter) must be in…
Writing
A consumer can sue for a violation of ECOA for up to
24 months
The penalty for violating ECOA is
$10,000
Was enacted to reduce discriminatory credit practices against low-income neighborhoods. Designed to help meet the credit needs of the community.
Community Reinvestment Act (CRA)
The range of possible FICO credit scores is
300 to 850
Borrowers are entitled to a free credit report if the lender takes
adverse action against them.
VA loans may not be use for:
Investment properties
The Red Flag rules require credit card issuers to verify the:
validity of any change of address
Any person who obtains a credit report without prior authorization, or a credit reporting agency employee who gives a credit report to an unauthorized person, maybe be fined up to:
$5,000 or imprisonment for 1 year, or both.
