Laws Flashcards
1
Q
Dodd Frank created (4)
A
- CFPB
- Residential MLO standards
- Minimum UW Standards
- Appraisal Activities
2
Q
RESPA Sections 6, 8, 10
A
- Servicing guidelines(transfers)
- Kickbacks (no excessive costs and unearned fees)
- Escrow (limits amount)
3
Q
TILA involves (3):
A
Cost of Credit must be uniformly disclosed (APR & Finance charge)
Advertising must be truthful and accurate
Right to Rescind
4
Q
Reg C
A
HMDA
5
Q
Reg B
A
ECOA
6
Q
Reg X
A
RESPA
7
Q
Reg Z
A
TILA
8
Q
GLB deals with (3):
A
Safeguards Rule
Pretexting Prohibition
Financial Privacy
9
Q
What is an MLO? (3)
A
- Takes an app
- Negotiates terms
- Receives compensation of the direct origination of the loan
10
Q
Mandates a nationwide licensing and registration system for residential MLOs
A
SAFE Act
11
Q
Both Registered and State-licensed MLOs require: (4)
A
- NMLS unique identifier
- Background check, fingerprints
- Sponsorship
- Credit check
12
Q
What does the NMLS do? (3)
A
- Develop written test and approve providers
- Develop mortgage call report
- Provide public access to licensing info of licensee and sponsor
13
Q
20 hours pre-licensing:
A
Laws- 3
Ethics- 3
Non-traditional Mortgages- 2
Electives- 12
14
Q
8 hours continued education:
A
Laws- 3
Ethics- 2
Non-traditional Mortgages- 2
Electives- 1
15
Q
What falls under Dodd Frank? (6)
A
- ATR
- QM
- HPML
- CFPB
- LO Comp Rule
- USPAP
16
Q
An instrument that transfers real property from one person to another free and clear
A
deed
17
Q
Written loan agreement between two parties that requires the borrower to pay the lender on a future date
A
promissory note
18
Q
a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation.
A
lien/encumbrance
19
Q
Fees which lenders may receive for selling or transferring the servicing rights to a loan
A
Service Release Premium
20
Q
Where does Unique Identifier (NMLS #) need to be displayed? (3)
A
- Business cards
- Applications
- Marketing material
(not required for interoffice communication or company signage)
21
Q
3 forms for SAFE licensing:
A
- MU1: Company
- MU3 : Branch
- MU4: Individual/MLO
22
Q
Related to “costs of loan”
A
RESPA
23
Q
Related to “costs of credit”
A
TILA
24
Q
RESPA covered loans:
A
Residential (1-4 family dwellings) for permanent financing.
25
exempt RESPA loans
commercial
construction
agricultural over 25 acres
temporary loans
vacant land
26
Purpose of RESPA (4)
1. education borrower of costs of settlement
2. shop for settlement services
3. protects from unearned costs and excessive fees
4. Limits escrow amount
27
When is LE due for RESPA?
within 3 biz days of application, starting day after submitted
28
0% Tolerance of LE (7)
1. Origination fee
2. Rate lock charges
3. Transfer taxes
4. Processing
5. Underwriting
6. Discount
7. 3rd party fee REQUIRED by lender
29
10% Tolerance of LE (2)
1. Settlement services lender suggests
2. Government recording charges
30
unlimited Tolerance of LE (3)
1. Prepaid interest
2. Escrow reserves and escrow cushion
3. 3rd party provider the customer selected on their own
31
If COC takes place, the lender must re-disclose the LE within ___
3 biz days of the change
32
States that the lender does/does not service the loan:
Sent within ___ days of app as part of ___
Mortgage Servicing Disclosure
3 biz
LE
33
Required when a person refers a provider when they have 1%+ ownership interest in.
Due ___
Affiliated Business Arrangement Disclosure
at time of referral
34
CD of TRID replaced:
HUD-1 (purchase)
HUD-1A (refinance)
under RESPA
35
CD due ___
3 biz days prior to consummation
36
Only fee an MLO can collect before the CD is issued is
application fee
37
HUD-1 is still used for ___
HECMs
38
Servicer transfers: (Servicing Transfer Statement)
Transferor must notify borrower ___
new servicer must notice ___
no late fees for ___
15 days before transfer
within 15 days after transfer
60 days following transfer
39
Under RESPA, GFE is required for:
HELOCs & HECMs
40
Under RESPA, HUD-1 is required for
HECMs
41
Reg V
FCRA and FACTA
42
Reg P
GLB Act
43
CFPB enforces: (7)
1. RESPA
2. TILA
3. TRID
4. ECOA
5. HMDA
6. FCRA/FACTA
7. GLB ACT
44
Who regulates RESPA?
HUD
45
FTC regulates: (2)
1. FCRA/FACTA
2. GLB Act
46
RESPA document retention:
5 years
-except GFE - 3 years
47
TILA document retention:
3 years
48
Under TILA, ARM disclosure
CHARM
49
Under TILA, Early ARM Disclosure for:
every ARM product borrower inquires about
50
Under TILA, HELOC disclosure
Open End Credit Disclosure
51
Under TILA, disclosure for non-purchase of primary residence
Notice of Right to Rescind
52
LE and CD not used for :
HELOCs and HECMs
53
LE and Intent to proceed is retained for :
3 years
54
CD is retained for:
5 years
55
Disclaimers under ECOA: (4)
1. Notice of Right to Receive Appraisal Report
2. Notice of Action Taken
3. Notice of Incomplete Application
4. Notice of Adverse Action
56
ECOA documents retained for:
25 months
57
____ Helps the government identify discriminatory lending practices. Helps to ensure that lending institutions are meeting the housing needs of their communities.
HMDA
58
used for reporting HMDA data:
LAR
59
HMDA documents retained for
3 years
60
____ ensures accuracy, fairness and privacy of consumer information that is assembled by the CRAs
FCRA
61
Purpose of FACTA: (4)
1. Prevent identity theft (FTC Red Flags rule)
2. Improve resolution of consumer disputes and accuracy of records
3. facilitate consumer's access to the info retained by CRAs
4. implement appropriate disposal methods for private info (FTC Disposal Rule)
62
GLB disclosures: (3)
1. Initial Privacy Notice
2. Opt Out Notice
3. Annual Privacy Notice
(these cannot be faxed)
63
Dodd Frank purpose: (4)
1. Protect consumers from abusive financial practices-created CFPB
2. Set residential MLO standards
3. Outlined min UW requirements (ATR & QM)
4. limited appraisal activities
64
ATR and QM records must be stored for
3 years
65
TRID
Initial Loan estimate is due
within 3 biz days of app
66
TRID
Revised LE is due
within 3 biz days of COC
67
TRID
CD is due
3 biz days before closing
68
TILA
CHARM is due
within 3 biz days of app if proceeding with ARM
69
TILA
Early ARM Disclosure due
within 3 biz days of app if borrower inquired about an ARM
70
TILA
Open-End Credit Disclosure is due
within 3 biz days of app for HELOC
71
TILA
Right to Rescind (2 copies) due
At closing (loan cannot fund for 3 biz days) for non-purchase of primary residence
72
RESPA
MSDS due
within 3 biz days of app
73
RESPA
SCIB is due
within 3 biz days of app
74
RESPA
ABA is duE
At time of referral if have more that 1% ownership
75
RESPA
Initial Escrow Statement is due
usually provided at closing but REQUIRED within 45 days of closing (for escrow taxing and HOI)
76
RESPA
Servicing Transfer Notice is due
15 days before transfer & within 15 days after transfer
77
RESPA
GFE is due
within 3 biz days of app for HELOC and HECM
78
RESPA
List of Homeowner Counseling Organizations is due
within 3 biz days of app for HECM or HOEPA loan
79
RESPA
HUD-1 Settlement Statement is due
1 biz day before closing for HECM
80
RESPA
Annual Escrow Statement is due
annually for escrowing taxes and HOI
81
HPA
Notice of Right to Cancel PMI is due
annually if paying PMI
82
HOEPA
Special HOEPA Disclosure is due
3 biz days before closing for high cost loan
83
GLBA
Initial Privacy Notice and Opt Out Notice is due
Consumers: prior to sharing NPI
Customers: when customer relationship is established
84
FACTA
Disclosure of Credit Score is due
as soon as practicable
85
ECOA
Notice of Action Taken is due
within 30 days of app or 30 days from last notice
86
ECOA
Notice of Incomplete Application is due
within 30 days of app
87
ECOA
Notice of Adverse Action is due
within 30 days of adverse action
88
ECOA
Notice of Right to Receive Appraisal Report is due
within 3 biz days of app
89
ECOA
Appraisal Report is due
3 biz days before closing
if not closing- within 30 days
if declined- borrower has 90 days to request
if requested- lender has 30 days to comply
90
SAFE exam attempts
fail-30 days-fail- 30 days- fail- 6 months
91
Who must be state licensed?
-Anyone acting as an MLO that does NOT work for a government agency, FDIC, or NCUA, etc
-any processor or underwriter that is independently contracted (not w-2ed by a licensed lender or broker)
92
Replaced GFE under RESPA
LE
93
Only fee that can be collected prior to Intent to Proceed or provided an LE is
credit report fee
94
only fee that MLO can collect before the CD is issued:
application fee on behalf of the lender
95
The ___ on the CD is used to prevent escrow overages
Aggregate Adjustment
96
We cannot charge a ___ fee for CD, as per ___
prep, RESPA
97
Initial Escrow Statement is due no later than ___ after an escrow account is established
45 days
98
Any escrow surplus over ___ must be reimbursed t the borrower within ___
$50, 30 days
99
Escrow includes (4):
1. Real estate taxes
2. HOI
3. Flood insurance
4. mortgage insurance
(never HOA)
100
charging customer unilateral increase over true cost
markup
101
If customer does not maintain an ___ policy, the servicer will obtain a ___ policy. A servicer must give the borrower ____ notice to get insurance.
HOI, Forced Place Insurance, 45 days
102
FORECLOSURE NOTIFICATON is due from the servicer regarding foreclosure proceeding- ____ contract must be made by the ____ day of delinquency and a ____ must be sent no later than the ___ day
LIVE
36th
WRITTEN NOTICE
45th
103
RATE CHANGE DISCLOSURE must be sent no LATER than ___ days BEFORE the the adjustment but no EARLIER than ___ days to ensure the borrower has time to refinance.
60
120
104
APR tolerance for re-disclosure is :
1/8th% or .125%
105
Unlike RESPA, TILA applies to : (4)
(Any financing for Personal Use)
1. Residential 1-4 unit, primary residence
2. credit cards
3. car loans
4. student loans
106
Finance Charge is any cost associated :
Directly with the lender
107
If a TRIGGER TERM is used, Reg Z requires that ______ disclosure of other pertinent info must be provided with ____
3 things must be included:
clear and conspicuous
equal prominence
1. APR (not a trigger)
2. Terms of repayment
3. Down payment
108
If borrower rescinds, Lender has ____ days to return any property paid.
Can waive 3 day rescission if
20
bona fide financial emergency
109
rescission only applies to
primary residence REFI (FHA, HELOC)
110
"know before you owe" falls under
TRID
111
TRID
What would only be sent on a purchase transaction?
Special Information Booklet/ Home Loan Toolkit
112
For initial LE, a business day is defined as
any day open to the public (includes Saturday)
113
After initial LE is disclosed ____ days must have surpassed before consummation based on the day the LE is issued
7 biz days
114
If COC, re-disclosure is due within _____
3 biz days
115
When LE is re-disclosed the lender must wait ____ from the date of re-disclosure before the consumer is at consummation
4 biz days
116
Any inaccurate overages charged between the LE and Final CD must be refunded within
60 days of consummatino
117
What enacted TRID?
The RESPA Act of 2013
118
What 2 main aspects of a loan application does an underwriter examine to determine if lender guidelines are being met?
Applicant and collateral
119
The primary reason for adopting special appraisal requirements for HPMLs was to:
Discourage the use of inflated appraisals to flip properties
120
Government monitoring information regarding applicant demographics is found where?
1003
121
What is the name of the rule that increases requirements for the consideration of a borrower's ability to repay?
ATR/QM Rule
122
If a borrower waives the right to receive a copy of an appraisal:
They must receive a copy of the final report at least 3 biz days before consummation
123
The responsibilities of a loan servicer include: (4)
1. Accepting payments
2. Disbursing escrow funds
3. Maintaining records
4. Managing delinquent accounts
124
VA funding fees are never:
refundable
125
Finance charges that are withheld from the proceeds of the loan are considered to be
Prepaid finance charges
126
Under HOEPA, verifying the consumer's repayment ability in an open-end, high-cost mortgage:
is based on verifying
-income
-assets
-current obligations
127
Which 2 loans are exempt from ATR requirements?
HECMs and HELOCs (ATR covers installment loans only)
128
Max DTI for QM
43%
129
QM has no balloons unless ____
made by small creditor (less than 2000 loans per year by a non-profit)
130
QM PPP:
must have fixed interest rate
-max penalty of 2% in first 2 years
-max penalty of 1% in 3rd year
QM ARM and gov loans CANNOT have PPP
131
For HPMLs, an escrow account must be maintained for at least ____
5 years
132
2nd appraisal requirements for HPML
2nd appraisal required if :
-buying for 10% more than what purchased for 90 days prior
-20% more than180 days
protect against property flipping
133
HUD approved counseling is required for: (3)
1. High cost/HOEPA loans
2. HECM
3. neg amortization
(due within 3 biz days, 10 local counselors )
134
HOEPA strictly prohibits:
equity-based lending
135
Which loan is not subject to HOEPA rules?
HECM (don't make payments)
136
HPA relates to
removal of PMI
