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NMLS > Laws > Flashcards

Laws Flashcards

1
Q

What do federal laws protect?

A

Consumers and their principal dwelling

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2
Q

RESPA is Reg?

A

Regulation x

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3
Q

RESPA stands for what?

A

Real estate settlement procedures act

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4
Q

ECOA And fair housing act are what reg?

A

Regulation B

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5
Q

What does ECOA stand for?

A

Equal credit opportunity act

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6
Q

TILA and HOEPA are what regulation?

A

Regulation Z

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7
Q

What does TILA stand for?

A

Truth in Lending Act

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8
Q

What does HOEPA stand for?

A

Home Ownership And Equity Protection Act

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9
Q

Home mortgage disclosure act is what regulation?

A

Regulation C

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10
Q

What does HMDA stand for?

A

Home mortgage disclosure act

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11
Q

What does FCRA stand for?

A

Fair credit reporting act

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12
Q

What does MARS stand for?

A

Mortgage assistance relief services

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13
Q

What does GLBA stand for?

A

Gramm Leavh Bliley Act

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14
Q

When was RESPA enacted?

A

1974

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15
Q

What is RESPA’s objective?

A

Ensure greater and more timely information and costs of obtaining a residential mortgage loan and to protect against unnecessarily high settlement changes caused by certain abusive practices. This was changed by the new TRID disclosure

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16
Q

What are the RESPA exemptions?

A 
Agriculture 
Business
Commercial
Temporary Financing
Vacant Land
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17
Q

What are the four RESPA disclosures?

A
  1. Good Faith Estimate
  2. TRID Loan Estimate
  3. Initial servicing disclosure
  4. Special information booklets if applicable
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18
Q

When does the good faith Estimate need to be sent or signed?

A

3 business days

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19
Q

What is a good faith Estimate?

A

Preferred provider relationship - only if services are required just MLO list name, address, phone number, type and cost of service, and nature of the relationship

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20
Q

When should the initial servicing disclosure be signed?

A

At application or within 3 business days but must be signed before settlement

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21
Q

What are the two special information booklets?

A

Buying your home - settlement costs booklet and when your home is on the line (HELOC)

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22
Q

When must the special information booklets be sent?

A

Within 3 business days

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23
Q

If the loan is denied within the first 3 business days, are the disclosures required?

A

No but a denial letter is required

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24
Q

What is the HUD-1/HUD-1A?

A

Settlement statement that must be given at closing with an itemization of charges

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25
Q

What is an escrow account?

A

Collects and holds funds for taxes

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26
Q

What are Affiliated Business Arrangement Disclosures?

A

Include the nature of the relationship, and range of charges, ownership interest can be as small as 1%.

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27
Q

AfBA cannot require services except for what?

A

Attorneys, credit providers, and appraisers

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28
Q

Can sellers require the use of a specific title company?

A

No

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29
Q

What are section 8 violations?

A

Kickbacks referral fees and unearned fees

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30
Q

What are the RESPA penalties?

A

$10,000 or 1 year in jail or both per violation

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31
Q

When was ECOA issued?

A

1974

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32
Q

What is the purpose of ECOA

A

To promote the availability of credit to all creditworthy applicants without regard to race color religion national origin sex marital status age to the fact that all or part of the applicants income derives from a public assistance program or to the fact that the applicant has in good faith except used any right under the consumer credit protection act

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33
Q

What are the ECOA Notices?

A

Notice of adverse action taken
Appraisal notice
ECOA notice

34
Q

What does FHACT stand for?

A

The fair house act

35
Q

What Regulation implements the FHACT

A

Regulation B

36
Q

What does CFPB stand for?

A

Consumer financial protection bureau

37
Q

What is the objective of the Fair housing act (FHACT)

A

Stop discrimination in housing rental sale and appraising

38
Q

What is redlining?

A

To refuse home mortgages or home insurance to areas or neighborhoods deemed poor financial risks or to discriminate against by refusing to grant loans mortgages or insurance to

39
Q

What is the objective of TILA?

A

For consumers to compare credit terms from lender to lender (APR), provides the right to cancel (recession) And to protect against unscrupulous lenders

40
Q

What are TILA exempt transactions

A

C- commercial
A - agricultural
B- business
O- organizational credit

41
Q

What is included in the APR?

A

Interest rate, mortgage insurance, and loan costs paid to you or ultimate lender

42
Q

What is Section 32 of TILA?

A

Discusses high cost loans

43
Q

What triggers Section 32 of TILA?

A

First loan- interest rate is 6.5% higher than the APOR

Subordinate second mortgage- interest rate is 8.5% higher than the APOR

44
Q

What is the APOR?

A

Average Prime Offer Rate

45
Q

What is the points and fees test?

A

Prepaid finance charges and other fees charged trigger HOEPA if fees exceed 5% or $1,020 for 2016 of the LOAN AMOUNT whichever is greater

46
Q

What is the APR test?

A

If the APR exceeds by more than 6.5% on a 1st mortgage or 8.5% on a subordinate lien on treasury securities with a compatible maturity

47
Q

What is Section 35 of TILA?

A

Higher priced mortgage loan

48
Q

What triggers Section 35 of TILA?

A

Loan secured by the consumers principal dwelling with an APR that exceeds the APOR by 1.5% on first lien or 3.5% on subordinate lien

49
Q

What is a loan originator?

A

A person or organization that for compensation or other monetary gain performs loan origination activities

50
Q

What are the compensation restrictions for LO’s?

A

No compensation based on terms
No dual compensation
No steering

51
Q

What is ATR?

A

Ability to Repay

52
Q

What is Ability to Repay?

A

The rule requires creditors to make a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan based on its terms

53
Q

What does a qualified mortgage do?

A

Provides liability protection for creditors, creates the presumption that the creditor complied with the ATR requirements and to protect consumers from unduly risky mortgages

54
Q

What are the four types of QM’s?

A

General, temporary, small creditor, and balloon payment

55
Q

What are the general QM loan requirements?

A

No negative amortization, no interest only, no balloon payment features, cannot exceed 30 year, may not have points and fees that exceed the specified limits

56
Q

Debt to income ratio limit for QM?

A

No more than 43%

57
Q

What is a higher priced QM?

A

First time lien - the APR was 1.5% points or more over the APOR

Subordinate mortgage - The APR exceeded the APOR BY 3.5% or more

58
Q

What is the MDIA?

A

Mortgage disclosure improvement act

59
Q

What are the features of the mortgage disclosure improvement act?

A

Closing date must by 7 business days after initial disclosures

Appraisal must be given 3 business days prior to closing

If there is a .125% variance in APR then to just re disclose

60
Q

An application consists of the submission of..?

A

Consumers name, income, social security number, property address, estimate of the value of the property, and the mortgage loan amount

61
Q

What is an HELOC?

A

Home equity line of credit

62
Q

What is the HMDA?

A

Home Mortgage Disclosure Act

63
Q

Which regulation does the HMDA fall under

A

Regulation C

64
Q

What is the purpose of the HMDA?

A

Detect discriminatory lending patterns, enforce anti discrimination statuses, help distribute public monies where needed, prevent redlining and blockbusting

65
Q

What is the FCRA?

A

Fair credit reporting act

66
Q

What is the objective of the FCRA?

A

Assure fairness, relevancy, confidentiality, and accuracy

67
Q

What is FACTA?

A

Fair and accurate credit transaction act

68
Q

What is the objective of FACTA?

A

Improves consumer access to credit information and resolution of customer disputes with credit agencies, helps prevent identity theft and helps victims of identify theft to restore their history

69
Q

What is the red flags rule designed to do?

A

Protect consumer sensitive person data

70
Q

Red flags rule penalty?

A

$3500 per incident

71
Q

What is the Dodd-Frank Act?

A

Created the Consumer Financial Protection Bureau (CFPB) established a Qualified Mortgage, and desired lenders ensure the borrowers Ability To Repay. Acceptable debt to income ration is no greater than 43%, limits amount of fees costs and points the borrower paid to a max of 3% of the loan amount

72
Q

What is MARS?

A

Mortgage assistance relief services

73
Q

What is the purpose of MARS?

A

Stopping preventing or postponing any mortgage or deed of trust foreclosure sale for the consumers dwelling, any repossession of the consumers dwelling, or otherwise saving the consumers dwelling from foreclosure or repossession. Negotiating obtaining or arranging a modification of any term of a dwelling loan including a reduction in the amount of interest, principal balance, monthly payments, or fees . Obtaining any forbearance or modification in the timeout of payments from and dwelling loan holder or services on and dwelling loan

74
Q

BSA/AML

A

Bank secrecy act/ anti money laundering

75
Q

What is the Currency and Foreign Transactions Reporting Acr of 1960

A

Requires us financial institutions to assist government agencies to detect and prevent money laundering (bsa)

76
Q

What is a SAR

A

Suspicious activities report

77
Q

What is the Gramm leach bliley act

A

Objective is to protect confidentiality of non public personal info

78
Q

Four rules of GLBA

A

Privacy rule
Safeguard rule
Pretexting rule
Opt out rule

79
Q

What is MAP

A

Mortgage acts and practices

80
Q

What regulation is MAP?

A

Regulation N

81
Q

What is MAP

A

Prohibits certain material representations in any commercial communication about any term of a mortgage product

NMLS (4 decks)

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