Laws Part 2: Flashcards
The costliest type of fraudulent activity costing the mortgage industry millions of dollars each year is:
Fraud For Profit
l of the following homeowner obligations would be found in a mortgage contract except:
Owner must maintain a reliable source of income
Creditors may not issue revisions to a Loan Estimate due to…
technical errors, miscalculations or underestimations of charges
What does a title commitment do?
A title commitment is a legal promise to issue a title policy; it is a statement of the terms and conditions that the insurance company agrees to uphold. The title commitment describes the condition of the property at that time.
Under the Fair Credit Reporting Act, a “furnisher” is defined as:
An entity that furnishes credit information to a CRA
The Model State Law is a document
created by the CSBS and the AARMR to guide states in implementing the legislation required by the SAFE Act.
A lien on real property, documented by a signed mortgage contract, gives the lender the right to:
to take possession of and sell the property to recoup some or all losses.
The income approach used in an appraisal may determine value based on
rental rates of similar competing properties.
If a consumer submits a complaint about a mortgage lender to the CFPB, the lender has how many days to respond before CFPB publishes the complaint in its public complaint database?
15
A mortgage and lien are both examples of____
encumbrances
If a foreclosure proceeding has been initiated by a creditor, the borrow may exercises his/her three year right to rescind if the finance charge for the loan was understated by:
More than 35$
Disparate Impact
It occurs when a practice or policy that appears to be non-discriminatory on its face has a disproportionately negative effect on members of a particular race, gender or other protected class.
Disparate Treatment
Discrimination that is defined by differences in the way members of a protected class are served by the institution.
ECOA requires the borrower to know the status of his/her loan within
30 days of application
Oversight for FCRA is shared between the
FTC and the CFPB
The promissory note contains
borrower’s name, loan amount, interest rate, loan terms, and a provision requiring notices be done in writing
Transactions for higher-priced mortgage loans do not include:
Counseling
Which loans require counseling:
High Cost, Reverse Mortgages, and Negative Amortization
That a borrower’s income will require verification describes the underwriting concept of..
Capacity
What do USDA Rural Development loans take into consideration?
the area median income
In order to complete an appraisal for a construction loan, what specific information does the appraiser need from the builder?
plans and specs of the project
A document that conveys ownership of real property from the grantor to the grantee is known as a
deed
factors involved in determining the movement on an ARM loan include
Frequency of change, caps, index, margin
The mortgage loan originator’s employment history is…
Available for access
Which of the following statements describes a lending practice that is prohibited by HOEPA and its implementing regulations?
lending decisions based solely on the amount of equity in a loan applicant’s home and requires consideration of repayment ability
Which act provides a specific definition of a nontraditional loan?
SAFE Act
High-cost mortgages are permitted to have a
variable interest rate
When funds are placed in a separate escrow account to offset the monthly payments required by the terms of a loan, and those funds are used to reduce the payment rate for a period of time, this is known as
Temporary Buy Down
A qualified mortgage may only include a balloon payment if the loan has:
a term of at least five years, has a fixed interest rate, and is made by a small creditor.
A Loan Program Disclosure must be provided for each variable-rate mortgage product in which
the applicant expresses an interest
the fact that an adult has a child 18 or younger living with him or her.
familial status
A revised Loan Estimate is required when:
The loan applicant locks his or her interest rate
A VA loan that is an IRRRL:
Is a qualified mortgage, and may have a conclusive presumption of compliance
When a credit report shows only a balance on a revolving debt, rather than a payment, an originator should:
Use 5% of the debt as the payment
Under federal law, a mortgage broker does not have a…
fiduciary relationship with a loan applicant
The “Your Home Loan Toolkit” disclosure is required for a
purchase transaction
FACTA requires an initial Fraud Alert to be kept in a consumer’s file for a period of:
1 year
