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NMLS+ > Laws > Flashcards

Laws Flashcards

1
Q

Dodd Frank created (4)

A
  1. CFPB
  2. Residential MLO standards
  3. Minimum UW Standards
  4. Appraisal Activities
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2
Q

RESPA Sections 6, 8, 10

A
  1. Servicing guidelines(transfers)
  2. Kickbacks (no excessive costs and unearned fees)
  3. Escrow (limits amount)
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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

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4
Q

Reg C

A

HMDA

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5
Q

Reg B

A

ECOA

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6
Q

Reg X

A

RESPA

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7
Q

Reg Z

A

TILA

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8
Q

GLB deals with (3):

A

Safeguards Rule
Pretexting Prohibition
Financial Privacy

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9
Q

What is an MLO? (3)

A
  1. Takes an app
  2. Negotiates terms
  3. Receives compensation of the direct origination of the loan
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10
Q

Mandates a nationwide licensing and registration system for residential MLOs

A

SAFE Act

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11
Q

Both Registered and State-licensed MLOs require: (4)

A
  1. NMLS unique identifier
  2. Background check, fingerprints
  3. Sponsorship
  4. Credit check
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12
Q

What does the NMLS do? (3)

A
  1. Develop written test and approve providers
  2. Develop mortgage call report
  3. Provide public access to licensing info of licensee and sponsor
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13
Q

20 hours pre-licensing:

A

Laws- 3
Ethics- 3
Non-traditional Mortgages- 2
Electives- 12

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14
Q

8 hours continued education:

A

Laws- 3
Ethics- 2
Non-traditional Mortgages- 2
Electives- 1

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15
Q

What falls under Dodd Frank? (6)

A
  1. ATR
  2. QM
  3. HPML
  4. CFPB
  5. LO Comp Rule
  6. USPAP
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16
Q

An instrument that transfers real property from one person to another free and clear

A

deed

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17
Q

Written loan agreement between two parties that requires the borrower to pay the lender on a future date

A

promissory note

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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

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19
Q

Fees which lenders may receive for selling or transferring the servicing rights to a loan

A

Service Release Premium

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20
Q

Where does Unique Identifier (NMLS #) need to be displayed? (3)

A
  1. Business cards
  2. Applications
  3. Marketing material
    (not required for interoffice communication or company signage)
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21
Q

3 forms for SAFE licensing:

A
  1. MU1: Company
  2. MU3 : Branch
  3. MU4: Individual/MLO
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22
Q

Related to “costs of loan”

A

RESPA

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23
Q

Related to “costs of credit”

A

TILA

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24
Q

RESPA covered loans:

A

Residential (1-4 family dwellings) for permanent financing.

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25
Q

exempt RESPA loans

A

commercial
construction
agricultural over 25 acres
temporary loans
vacant land

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26
Q

Purpose of RESPA (4)

A
  1. education borrower of costs of settlement
  2. shop for settlement services
  3. protects from unearned costs and excessive fees
  4. Limits escrow amount
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27
Q

When is LE due for RESPA?

A

within 3 biz days of application, starting day after submitted

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28
Q

0% Tolerance of LE (7)

A
  1. Origination fee
  2. Rate lock charges
  3. Transfer taxes
  4. Processing
  5. Underwriting
  6. Discount
  7. 3rd party fee REQUIRED by lender
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29
Q

10% Tolerance of LE (2)

A
  1. Settlement services lender suggests
  2. Government recording charges
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30
Q

unlimited Tolerance of LE (3)

A
  1. Prepaid interest
  2. Escrow reserves and escrow cushion
  3. 3rd party provider the customer selected on their own
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31
Q

If COC takes place, the lender must re-disclose the LE within ___

A

3 biz days of the change

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32
Q

States that the lender does/does not service the loan:
Sent within ___ days of app as part of ___

A

Mortgage Servicing Disclosure
3 biz
LE

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33
Q

Required when a person refers a provider when they have 1%+ ownership interest in.
Due ___

A

Affiliated Business Arrangement Disclosure
at time of referral

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34
Q

CD of TRID replaced:

A

HUD-1 (purchase)
HUD-1A (refinance)
under RESPA

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35
Q

CD due ___

A

3 biz days prior to consummation

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36
Q

Only fee an MLO can collect before the CD is issued is

A

application fee

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37
Q

HUD-1 is still used for ___

A

HECMs

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38
Q

Servicer transfers: (Servicing Transfer Statement)
Transferor must notify borrower ___
new servicer must notice ___
no late fees for ___

A

15 days before transfer
within 15 days after transfer
60 days following transfer

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39
Q

Under RESPA, GFE is required for:

A

HELOCs & HECMs

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40
Q

Under RESPA, HUD-1 is required for

A

HECMs

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41
Q

Reg V

A

FCRA and FACTA

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42
Q

Reg P

A

GLB Act

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43
Q

CFPB enforces: (7)

A
  1. RESPA
  2. TILA
  3. TRID
  4. ECOA
  5. HMDA
  6. FCRA/FACTA
  7. GLB ACT
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44
Q

Who regulates RESPA?

A

HUD

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45
Q

FTC regulates: (2)

A
  1. FCRA/FACTA
  2. GLB Act
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46
Q

RESPA document retention:

A

5 years
-except GFE - 3 years

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47
Q

TILA document retention:

A

3 years

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48
Q

Under TILA, ARM disclosure

A

CHARM

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49
Q

Under TILA, Early ARM Disclosure for:

A

every ARM product borrower inquires about

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50
Q

Under TILA, HELOC disclosure

A

Open End Credit Disclosure

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51
Q

Under TILA, disclosure for non-purchase of primary residence

A

Notice of Right to Rescind

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52
Q

LE and CD not used for :

A

HELOCs and HECMs

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53
Q

LE and Intent to proceed is retained for :

A

3 years

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54
Q

CD is retained for:

A

5 years

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55
Q

Disclaimers under ECOA: (4)

A
  1. Notice of Right to Receive Appraisal Report
  2. Notice of Action Taken
  3. Notice of Incomplete Application
  4. Notice of Adverse Action
56
Q

ECOA documents retained for:

A

25 months

57
Q

____ Helps the government identify discriminatory lending practices. Helps to ensure that lending institutions are meeting the housing needs of their communities.

A

HMDA

58
Q

used for reporting HMDA data:

A

LAR

59
Q

HMDA documents retained for

A

3 years

60
Q

____ ensures accuracy, fairness and privacy of consumer information that is assembled by the CRAs

A

FCRA

61
Q

Purpose of FACTA: (4)

A
  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
Q

GLB disclosures: (3)

A
  1. Initial Privacy Notice
  2. Opt Out Notice
  3. Annual Privacy Notice
    (these cannot be faxed)
63
Q

Dodd Frank purpose: (4)

A
  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
Q

ATR and QM records must be stored for

A

3 years

65
Q

TRID
Initial Loan estimate is due

A

within 3 biz days of app

66
Q

TRID
Revised LE is due

A

within 3 biz days of COC

67
Q

TRID
CD is due

A

3 biz days before closing

68
Q

TILA
CHARM is due

A

within 3 biz days of app if proceeding with ARM

69
Q

TILA
Early ARM Disclosure due

A

within 3 biz days of app if borrower inquired about an ARM

70
Q

TILA
Open-End Credit Disclosure is due

A

within 3 biz days of app for HELOC

71
Q

TILA
Right to Rescind (2 copies) due

A

At closing (loan cannot fund for 3 biz days) for non-purchase of primary residence

72
Q

RESPA
MSDS due

A

within 3 biz days of app

73
Q

RESPA
SCIB is due

A

within 3 biz days of app

74
Q

RESPA
ABA is duE

A

At time of referral if have more that 1% ownership

75
Q

RESPA
Initial Escrow Statement is due

A

usually provided at closing but REQUIRED within 45 days of closing (for escrow taxing and HOI)

76
Q

RESPA
Servicing Transfer Notice is due

A

15 days before transfer & within 15 days after transfer

77
Q

RESPA
GFE is due

A

within 3 biz days of app for HELOC and HECM

78
Q

RESPA
List of Homeowner Counseling Organizations is due

A

within 3 biz days of app for HECM or HOEPA loan

79
Q

RESPA
HUD-1 Settlement Statement is due

A

1 biz day before closing for HECM

80
Q

RESPA
Annual Escrow Statement is due

A

annually for escrowing taxes and HOI

81
Q

HPA
Notice of Right to Cancel PMI is due

A

annually if paying PMI

82
Q

HOEPA
Special HOEPA Disclosure is due

A

3 biz days before closing for high cost loan

83
Q

GLBA
Initial Privacy Notice and Opt Out Notice is due

A

Consumers: prior to sharing NPI
Customers: when customer relationship is established

84
Q

FACTA
Disclosure of Credit Score is due

A

as soon as practicable

85
Q

ECOA
Notice of Action Taken is due

A

within 30 days of app or 30 days from last notice

86
Q

ECOA
Notice of Incomplete Application is due

A

within 30 days of app

87
Q

ECOA
Notice of Adverse Action is due

A

within 30 days of adverse action

88
Q

ECOA
Notice of Right to Receive Appraisal Report is due

A

within 3 biz days of app

89
Q

ECOA
Appraisal Report is due

A

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
Q

SAFE exam attempts

A

fail-30 days-fail- 30 days- fail- 6 months

91
Q

Who must be state licensed?

A

-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
Q

Replaced GFE under RESPA

A

LE

93
Q

Only fee that can be collected prior to Intent to Proceed or provided an LE is

A

credit report fee

94
Q

only fee that MLO can collect before the CD is issued:

A

application fee on behalf of the lender

95
Q

The ___ on the CD is used to prevent escrow overages

A

Aggregate Adjustment

96
Q

We cannot charge a ___ fee for CD, as per ___

A

prep, RESPA

97
Q

Initial Escrow Statement is due no later than ___ after an escrow account is established

A

45 days

98
Q

Any escrow surplus over ___ must be reimbursed t the borrower within ___

A

$50, 30 days

99
Q

Escrow includes (4):

A
  1. Real estate taxes
  2. HOI
  3. Flood insurance
  4. mortgage insurance
    (never HOA)
100
Q

charging customer unilateral increase over true cost

A

markup

101
Q

If customer does not maintain an ___ policy, the servicer will obtain a ___ policy. A servicer must give the borrower ____ notice to get insurance.

A

HOI, Forced Place Insurance, 45 days

102
Q

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

A

LIVE
36th
WRITTEN NOTICE
45th

103
Q

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.

A

60
120

104
Q

APR tolerance for re-disclosure is :

A

1/8th% or .125%

105
Q

Unlike RESPA, TILA applies to : (4)

A

(Any financing for Personal Use)
1. Residential 1-4 unit, primary residence
2. credit cards
3. car loans
4. student loans

106
Q

Finance Charge is any cost associated :

A

Directly with the lender

107
Q

If a TRIGGER TERM is used, Reg Z requires that ______ disclosure of other pertinent info must be provided with ____
3 things must be included:

A

clear and conspicuous
equal prominence
1. APR (not a trigger)
2. Terms of repayment
3. Down payment

108
Q

If borrower rescinds, Lender has ____ days to return any property paid.
Can waive 3 day rescission if

A

20
bona fide financial emergency

109
Q

rescission only applies to

A

primary residence REFI (FHA, HELOC)

110
Q

“know before you owe” falls under

A

TRID

111
Q

TRID
What would only be sent on a purchase transaction?

A

Special Information Booklet/ Home Loan Toolkit

112
Q

For initial LE, a business day is defined as

A

any day open to the public (includes Saturday)

113
Q

After initial LE is disclosed ____ days must have surpassed before consummation based on the day the LE is issued

A

7 biz days

114
Q

If COC, re-disclosure is due within _____

A

3 biz days

115
Q

When LE is re-disclosed the lender must wait ____ from the date of re-disclosure before the consumer is at consummation

A

4 biz days

116
Q

Any inaccurate overages charged between the LE and Final CD must be refunded within

A

60 days of consummatino

117
Q

What enacted TRID?

A

The RESPA Act of 2013

118
Q

What 2 main aspects of a loan application does an underwriter examine to determine if lender guidelines are being met?

A

Applicant and collateral

119
Q

The primary reason for adopting special appraisal requirements for HPMLs was to:

A

Discourage the use of inflated appraisals to flip properties

120
Q

Government monitoring information regarding applicant demographics is found where?

A

1003

121
Q

What is the name of the rule that increases requirements for the consideration of a borrower’s ability to repay?

A

ATR/QM Rule

122
Q

If a borrower waives the right to receive a copy of an appraisal:

A

They must receive a copy of the final report at least 3 biz days before consummation

123
Q

The responsibilities of a loan servicer include: (4)

A
  1. Accepting payments
  2. Disbursing escrow funds
  3. Maintaining records
  4. Managing delinquent accounts
124
Q

VA funding fees are never:

A

refundable

125
Q

Finance charges that are withheld from the proceeds of the loan are considered to be

A

Prepaid finance charges

126
Q

Under HOEPA, verifying the consumer’s repayment ability in an open-end, high-cost mortgage:

A

is based on verifying
-income
-assets
-current obligations

127
Q

Which 2 loans are exempt from ATR requirements?

A

HECMs and HELOCs (ATR covers installment loans only)

128
Q

Max DTI for QM

A

43%

129
Q

QM has no balloons unless ____

A

made by small creditor (less than 2000 loans per year by a non-profit)

130
Q

QM PPP:

A

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
Q

For HPMLs, an escrow account must be maintained for at least ____

A

5 years

132
Q

2nd appraisal requirements for HPML

A

2nd appraisal required if :
-buying for 10% more than what purchased for 90 days prior
-20% more than180 days
protect against property flipping

133
Q

HUD approved counseling is required for: (3)

A
  1. High cost/HOEPA loans
  2. HECM
  3. neg amortization
    (due within 3 biz days, 10 local counselors )
134
Q

HOEPA strictly prohibits:

A

equity-based lending

135
Q

Which loan is not subject to HOEPA rules?

A

HECM (don’t make payments)

136
Q

HPA relates to

A

removal of PMI

NMLS+ (7 decks)

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