Laws Flashcards
What law deals with credit,APR & Advertising of consumer loans?
TILA/REG Z
Which regulation prohibits kickbacks?
Respa Section 6
Which regulation requires the lender to cancel PMI when the loan reaches 78% LTV
HPA- Homeowners Protection Act
Which regulation prohibits fee splitting?
Respa
X is the letter used to describe which regulation?
Respa
RESPA is the acronym to describe which law
Real estate settlement procedures act
What type of mortgage requires a non refundable funding fee?
VA loan
What is the provision enabling a lender to demand full repayments if the borrower defaults on the loan
Acceleration Clause
What is the provision in a mortgage enabling a lender to demand full repayment if the borrower transfers the loan
Alienation Clause
What does CFPB stand for?
Consumer Financial Protection Bureau
What two laws created CFPB
Dodd Frank and Consumer Finace Protection Act
Which regulation is designed to help meet the credit needs of the communities in which it operates?
Community reinvestment Act
Under ECOA rules and regulations how many days does the borrower have to request a copy of an appraisal report if the application was denied?
90 days
Under ECOA rules and regulations if an application for credit is denied and if the borrower requests a copy, the lender has how many days to provide a copy of the appraisal?
30 days
If a loan application is approved, under ECOA when must a copy of the appraisal be provided to the borrower
3 business day prior to settlement
Conforming loans follow the guidelines of which regulators
Fannie and Freddie
Which regulation requires the lenders to be equal when extending credit to borrowers
ECOA - Regulation B
How old must a borrower be to qualify for a reverse mortgage
62 years
Which regulation has the primary function of preventing identity theft?
Fact Act
Which regulation has section 114 rules?
Fact Act
Which regulation requires the creditor to verify the validity of any changes of address received?
Section 114 of Fact Act
What is the payment method used in reverse mortgages that allow the homeowners to receive a monthly check while living int h property
Tenure Method
What is the fraud scheme where a borrower use someone else’s name to purchase the property but that person will not be living at the property?
Straw buyer/Nominee buyer
What type of lender insures mortgages
FHA approved lenders
What type of lender guarantees mortgages
VA & USDA approved lenders
What is the entity that
loans money to fund
purchases in rural areas?
USDA/Dept. of
Agriculture
What is the value
remaining in property
after all liens and debts
have been paid?
Equity
A borrower is refinancing
his home. How much time
does Reg Z give him to
change his mind (rescind)?
3 days
Which Regulation
established the 3-day
right of rescission rule?
TILA/REG Z
Redlining is part of
which regulation/Law?
Fair Housing Act
Blockbusting is part of
which regulation/Law?
Fair Housing Act
Steering is part of which
regulation/Law?
Fair Housing Act
Trying to convince a homeowner to SELL his home by implying that another race/ethnicity is moving in the neighborhood is called?
Blockbusting/panic
selling
Trying to convince a homeowner to PURCHASE in a particular neighborhood based on his race, religion or ethnicity is called?
STEERING
Refusing to make loans on a property in a certain neighborhood for discriminatory reasons is called?
Redlining
What does HOEPA stand
for?
Home Ownership and
Equity Protection Act
HOEPA Loans are part
of which larger
regulation?
Reg Z/TILA
High Cost Loans are part
of which larger
regulation?
Reg Z/TILA
High Priced Loans are
part of which larger
regulation?
Reg Z/TILA
Section 32 Loans are part
of which larger
regulation?
Reg Z/TILA
Section 35 Loans are part
of which larger
regulation?
Reg Z/TILA
MDIA ACT is part of
which larger regulation?
Reg Z/TILA
Mortgage Disclosure
Improvement Act is part
of which larger
regulation?
Reg Z/TILA
What is another name for
Annual Percentage Rate?
Effective Rate
What is another name for
Interest Rate?
Note Rate or Nominal
Rate
PITI divided by Gross
Monthly income is
referred to as what?
Housing Ratio or Front-
End DTI
PITI + monthly debt
divided by Gross
Monthly income is
referred to as what?
Total Obligation Ratio –
Back-end Ratio
How long must TILA
Disclosures be kept?
2 years
(exceptions – LE is kept
for 3 years and CD is
kept for 5 years)
What is the maximum
amount of time that
NEGATIVE info can
remain on a credit report?
7 years
What is the maximum
amount of time that a
bankruptcy can remain
on a credit report?
10 years
Which law/regulation states
that a Bankruptcy can only
remain on your credit for a
MAX of 10 years?
FCRA – Fair Credit
Reporting Act – Reg V
Which law/regulation states
that negative information can
only remain on your credit for
a MAX of 7 years?
FCRA – Fair Credit
Reporting Act – Reg V
Which law allows a consumer who has had her credit card used by an identity thief to place a credit freeze on her credit report?
FACT ACT
Which law requires
creditors to TRUNCATE
debit and credit card info
on receipts?
FACT ACT
Which regulation requires that loan officers must take measures to secure and dispose of (burn and/or shred) a borrower’s sensitive credit information?
FACT ACT
Which regulation states that if a borrower is denied credit, he can receive a FREE copy of his credit report?
FCRA – Fair Credit
Reporting Act
REG V
Which regulation states that if
a borrower is unemployed, he
can receive a FREE copy of
his credit report?
FCRA – Fair Credit
Reporting Act – Reg V
Which regulation states that if a borrower is on SSI or Disability, he can receive a FREE copy of his credit report?
FCRA – Fair Credit
Reporting Act – Reg V
Which regulation states that if a borrower has been the victim of fraud, he can receive a FREE copy of his credit report?
FCRA – Fair Credit
Reporting Act – Reg V
Which regulation states that a borrower can receive a FREE copy of his credit report once a year (no reason or requirement necessary)?
FACT Act
During the loan process,
if you ask a borrower if
he is single…which law
are you violating?
ECOA – Regulation B
Which regulation states that the only correct way to ask about a borrower’s marital status is: are you married, unmarried or separated?
ECOA – Regulation B
Who is responsible for
providing the closing
disclosure to the
borrower?
The Creditor/Lender
Who is responsible for
providing the closing
disclosure to the Seller?
Settlement Agent/Title
Agent
Which regulation
requires the borrower to
receive the Loan
Estimate?
TILA – REG Z
Which regulation
requires the borrower to
receive the Closing
Disclosure?
TILA – REG Z
Which regulation requires
the borrower to receive the
Loan Estimate within 3
business days?
RESPA – Regulation X
Which regulation requires
the borrower to receive the
Closing Disclosure within
3 business days?
RESPA – Regulation X
As it relates to the loan
estimate – what is the
definition of a Business
day?
Any day that the
Creditor’s office is open
for business
According to TILA/REG
Z – what is the definition
of a Business day?
Any calendar day except
for Sunday and Legal
Holiday
During the loan process,
where do you find
HMDA government
monitoring information?
Section X of the 1003
application
What does HMDA stand
for?
Home Mortgage
Disclosure Act
What appraisal approach is used when appraising property that has been destroyed by a natural disaster?
Cost Approach or
replacement cost
approach
In the sales comparison
approach, how many
comps are required?
3
What is another name for
the Financial Services
Modernization Act of
1999?
Graham Leach Bliley
Act
How many days does a CREDITOR have to notify a consumer of the status of a credit application (denied, approved, need more info)?
30 days
Which regulation states that a creditor has 30 days to notify a consumer of an application approval or denial?
ECOA – REG B
How many hours of
Ethics is required to be
taught in the 20hr
Pre-licensing course?
3
How many hours of Ethics
is required to be taught in
the 8hr Continuing
Education course?
2
How many hours of
Federal Law is required
to be taught in the 20hr
Pre-licensing course?
3
A mortgage that includes
more than one parcel of
land is called what?
Blanket Mortgage
A mortgage that includes
appliances such as a
stove or refrigerator is
called what?
Package Mortgage
Which closing document itemizes the final closing cost and items paid in connection with the loan for the borrower?
Closing Disclosure
Which law deals with
APR and Advertising of
credit terms?
TILA – REG Z
What is the official
name for the 3/7/3 rule?
Mortgage Disclosure
Improvement Act or
MDIA Act
What regulation requires
the lender to perform an
escrow analysis?
RESPA – REG X
Which law states that it is a
violation to discriminate
against a potential borrower
on public assistance?
ECOA – REG B
What two classes are
protected under Fair
Housing Act - but NOT
under ECOA?
Disability/Handicap &
Familial Status
What three classes are
protected under ECOA
but NOT under Fair
Housing?
Age, Marital Status, and
Public Assistance
What is another name for
a non-conforming loan?
Jumbo Loan
What is another name for
a Jumbo loan?
Non-Conforming Loan
The front Ratio for an
FHA loan is 31%… what
is the back ratio?
43%
The front Ratio for a
Conventional loan is
28%… what is the back
ratio?
36%
The Ratio for a VA loan
is?
41%
What is another name for
the Bank Secrecy Act?
The anti-money
laundering act
What is another name for
the Anti-Money
Laundering Act
Bank Secrecy Act
Which law requires banks
(financial institutions) to
keep records of deposits of
$10,000 made in cash?
Anti-Money Laundering
Act/Bank Secrecy Act
Which law requires MLOs to file suspicion activity that might be a sign of tax evasion, money laundering, or other possible criminal activity exceeding $5,000.
Anti-Money Laundering
Act/Bank Secrecy Act
If you fail the test, how
long must you wait
before retaking the
exam?
Required 30-day waiting
period before retaking a
failed test
How many hours of Federal Law is required to be taught in the 8hr Continuing Education course?
3
What does AUS stand
for?
Automated Underwriting
System
What does SAFE Act
stand for?
Secure & Fair
Enforcement Act
What does HERA stand
for?
Housing & Economic
Recovery Act
What does HPA stand
for?
Homeowner’s Protection
Act
What does GLBA stand
for?
Graham Leach Bliley Act
What type of property is
covered under RESPA?
1 – 4 unit Residential Property
Which regulation allows lenders to
OBTAIN information regarding a
borrower’s ethnicity, to help identify
possible discriminatory patterns?
HMDA – Regulation C
When can a borrower
request cancellation of
PMI?
When LTV Reaches 80%
When must the lender
automatically cancel
PMI?
When the LTV reaches 78%
What is the primary market?
Where borrowers/consumers
obtain mortgage loans
What is the secondary
market?
Where lenders buy &
sell loans from one
another
Name the two
Government Sponsored
Enterprises (GSEs)?
Fannie Mae
Freddie Mac
Which GSE is the
Federal National
Mortgage Association?
Fannie Mae
Which GSE is the
Federal Home Loan
Mortgage Association?
Freddie Mac
TILA applies when credit
is payable by written
agreement in __________
installments?
More than 4 installments
Which AUS system does
Fannie Mae use?
Desktop Underwriter
DU
Which AUS system does
Freddie Mac use?
Loan Product Advisor
(formerly Loan
Prospector)
How often must
National DNC and
internal DNC list be
updated?
Every 31 days and
records must be
maintained for 24
months
An appraisal is valid for
_____ months?
An appraisal is valid for 6 months (updated 1/1/2020). It must be re-certified if the appraisal will be 4 months (120 days) old or more at closing.
What is the penalty for
violating the DNC list?
$42,530 now it is 43280 per call
Which regulation allows
the borrower to sue for
3x’s the amount paid for
title insurance?
RESPA Section 9
If money was collected,
and a borrower rescinds,
how long does escrow
have to return the funds?
20 days
MLOs seeking to become licensed in other states or who seek to move from a bank to a non-bank lender will be allowed \_\_\_\_ days of transitional (temporary) authority.
These individuals are allowed to originate loans while completing any state-specific requirements for licensure such as education or testing for up to 120 days while they are applying to the state agency for their new
license.
What is the only fee that
can be collected prior to
delivery of the Loan
Estimate?
Credit Reporting fee
Once an individual is unlicensed for
________ years as an MLO, most states require that the individual retake the 20 hrs of pre-licensing education in order to have his MLO license reinstated.
Once an individual is unlicensed for
three (3) years as an MLO, most states require that the individual retake the 20 hrs of pre-licensing education in order to have his MLO license reinstated.
