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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
What is an escrow account?
Collects and holds funds for taxes
26
What are Affiliated Business Arrangement Disclosures?
Include the nature of the relationship, and range of charges, ownership interest can be as small as 1%.
27
AfBA cannot require services except for what?
Attorneys, credit providers, and appraisers
28
Can sellers require the use of a specific title company?
No
29
What are section 8 violations?
Kickbacks referral fees and unearned fees
30
What are the RESPA penalties?
$10,000 or 1 year in jail or both per violation
31
When was ECOA issued?
1974
32
What is the purpose of ECOA
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
33
What are the ECOA Notices?
Notice of adverse action taken Appraisal notice ECOA notice
34
What does FHACT stand for?
The fair house act
35
What Regulation implements the FHACT
Regulation B
36
What does CFPB stand for?
Consumer financial protection bureau
37
What is the objective of the Fair housing act (FHACT)
Stop discrimination in housing rental sale and appraising
38
What is redlining?
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
What is the objective of TILA?
For consumers to compare credit terms from lender to lender (APR), provides the right to cancel (recession) And to protect against unscrupulous lenders
40
What are TILA exempt transactions
C- commercial A - agricultural B- business O- organizational credit
41
What is included in the APR?
Interest rate, mortgage insurance, and loan costs paid to you or ultimate lender
42
What is Section 32 of TILA?
Discusses high cost loans
43
What triggers Section 32 of TILA?
First loan- interest rate is 6.5% higher than the APOR Subordinate second mortgage- interest rate is 8.5% higher than the APOR
44
What is the APOR?
Average Prime Offer Rate
45
What is the points and fees test?
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
What is the APR test?
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
What is Section 35 of TILA?
Higher priced mortgage loan
48
What triggers Section 35 of TILA?
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
What is a loan originator?
A person or organization that for compensation or other monetary gain performs loan origination activities
50
What are the compensation restrictions for LO's?
No compensation based on terms No dual compensation No steering
51
What is ATR?
Ability to Repay
52
What is Ability to Repay?
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
What does a qualified mortgage do?
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
What are the four types of QM's?
General, temporary, small creditor, and balloon payment
55
What are the general QM loan requirements?
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
Debt to income ratio limit for QM?
No more than 43%
57
What is a higher priced QM?
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
What is the MDIA?
Mortgage disclosure improvement act
59
What are the features of the mortgage disclosure improvement act?
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
An application consists of the submission of..?
Consumers name, income, social security number, property address, estimate of the value of the property, and the mortgage loan amount
61
What is an HELOC?
Home equity line of credit
62
What is the HMDA?
Home Mortgage Disclosure Act
63
Which regulation does the HMDA fall under
Regulation C
64
What is the purpose of the HMDA?
Detect discriminatory lending patterns, enforce anti discrimination statuses, help distribute public monies where needed, prevent redlining and blockbusting
65
What is the FCRA?
Fair credit reporting act
66
What is the objective of the FCRA?
Assure fairness, relevancy, confidentiality, and accuracy
67
What is FACTA?
Fair and accurate credit transaction act
68
What is the objective of FACTA?
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
What is the red flags rule designed to do?
Protect consumer sensitive person data
70
Red flags rule penalty?
$3500 per incident
71
What is the Dodd-Frank Act?
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
What is MARS?
Mortgage assistance relief services
73
What is the purpose of MARS?
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
BSA/AML
Bank secrecy act/ anti money laundering
75
What is the Currency and Foreign Transactions Reporting Acr of 1960
Requires us financial institutions to assist government agencies to detect and prevent money laundering (bsa)
76
What is a SAR
Suspicious activities report
77
What is the Gramm leach bliley act
Objective is to protect confidentiality of non public personal info
78
Four rules of GLBA
Privacy rule Safeguard rule Pretexting rule Opt out rule
79
What is MAP
Mortgage acts and practices
80
What regulation is MAP?
Regulation N
81
What is MAP
Prohibits certain material representations in any commercial communication about any term of a mortgage product

NMLS (4 decks)

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