Mortgage Flashcards
What is definition of general business day
(For purpose of meeting 3 day day requirement for LE and CD) a day on which creditors offices are open to the public for carrying out substantially all of its business functions
What is definition of precise business day
(for all other disclosure timing purposes other than 3 day for LE and CD) all calendar days except Sundays and legal public holidays
When must variable rate disclosure be provided?
When blank application form is provided or before collecting a non refundable fee
When is charm booklet required
At application or before non refundable application fee
When can an LE expire
Not before 10 days
Does LE apply to heloc
No only closed end
What is the only fee permitted prior to receiving an ITP (intent to proceed)?
Credit report fee
How soon after learning about a change in circumstance affecting settlement charges would CU have to provide new LE
Three business days
What are the three ways to cure a tolerance violation between LE and CD
1) issue a credit on CD
2) refund any overage to the borrower not later than 60 calendar days after closing
3) principal reduction
Does Ability to Repay reg apply to HELOC?
No, only closed end secured by dwelling, which means it also does not apply to:
Temporary or bridge loans with term of 12 mos or less, loans secured by timeshare, reverse mortgage, or construction period of construction loan
When was 43% cap on DTI eliminated
October 2022
What are elements of a QM (qualified mortgage)
1) regular periodic payments
2) loan term not exceeding 30 yrs
3) limitation on points and fees that may be charged in connection with the transaction
4) monthly payment based on max interest rate in first 5 yrs
What is test for determining if a high cost mortgage (that uses APR vs APOR test)
If consumer credit transaction secured by borrowers principal dwelling has APR (this includes fees) exceeds APOR (average prime offer rate) by:
1) 6.5% or more for first lien loan
2) 8.5% or more for first lien loan of less than $50k
3) 8.5% for subordinate lien loan
What is test for determining if high if high cost using points and fees test
Consumer transaction secured by principal dwelling which total points and fees charged in connection with the transaction exceed:
1) 5% of the loan amount for loans greater than $24, 866 (or)
2) for loans less than 24,866, the lesser of 8% of loan amount or $1,243
Once preliminary CD provided, if something changes that would require a new 3 day waiting period, would a new LE need provided
No, just do a new CD and there would be a new 3 day (precise business day) window. At this point, CD is the controlling document, and issuing a new LE would cause an unneeded delay in closing time frame requirements
When issuing a revised CD, what three things would cause the need for a new 3 day waiting period?
1) a change to APR outside the acceptable tolerance levels (1/8 of 1% for fixed transactions OR 1/4 of 1% for ARMs)
2) Change to the loan product
3) addition of prepayment penalty on loan
Does right of rescission use general or precise business day
General - if not open on Saturday then it doesn’t count as a bus. day
If fail to properly provide opportunity to rescind, how long is period for rescission now allowed
3 years instead of 3 days
True or false: right of rescission is granted to all owners of property regardless of whether they are on loan
True
What is time requirement to provide a requested payoff statement to a consumer for loan secured by dwelling
NLT seven business days after receiving request (participation loans exempt)
When must initial escrow statement be provided
Within 45 calendar days of closing (typically given at closing)
When must annual escrow statement be provided
Within 30 days of completion of escrow account computation year
When does short year escrow account statement need sent
Either within 60 days of receipt of payoff funds OR within 60 days of effective date of servicing transfer
When does escrow surplus greater than $50 need refunded
Within 30 days
How soon after mortgage paid off would any net remaining escrow amount need refunded
Within 20 days
When are periodic statements required to be sent
Within a reasonably prompt time (four days) following the close of the previous billing cycle
Per TILA, when must cu deliver initial rate adjustment notice
Between 210 and 240 days before the first payment at the adjusted level is due
When must cu deliver subsequent rate adjustment notices
Between 60 and 120 days before first payment at adjusted level is due
For initial and subsequent rate adj notices, if new rate or payment are not known at time of disclosure, cu must
1) use value of index reported within 15 days of notice date and
2) clearly label as an estimate
Per RESPA, when mortgage loan sold of transferred what are requirements for delivery of notice of sale/transfer?
1) Separate notices:
Goodbye letter at least 15 days before effective date of transfer and hello letter from new servicer at least 15 days after transfer (or)
2) combined - hello/goodbye letter 15 days before effective date of transfer (combined with both old and new servicer)
What is in scope for error resolution under RESPA
Mortgage secured by first or subordinate liens on residential property (1-4 family, principal dwelling), including refinancing
Does RESPA error resolution apply to HELOC
No
What must written notification of error from borrower include
1) borrower name
2) loan account number
3) description of alleged error
How long does cu have to acknowledge receipt of error notification
5 days
How long does cu have to investigate error and respond
30 days (or 45 days but must properly notify borrower of extension if needed)
Is creditor or servicer responsible for error resolution process?
Servicer
What are the three exceptions where error resolution process is not required
1) error notice is duplicative
2) error notice is overbroad
3) error notice was received more than one year after the loan was transferred to a different service provider or paid in full
How long after receiving error notice is cu prohibited from furnishing negative info to credit report agency regarding the payment that is subject of error notice
60 days
What are exceptions where cu does not have to comply with requests for information?
1) request is duplicative
2) request is overbroad
3) request is untimely
4) request is for confidential or privileged information
What are notice requirements when force placing insurance on mortgage collateral
Initial notice sent no later than 45 days before assessing fee or force placing insurance (and)
Reminder notice NLT 15 days before fee or FPI
What is scope of early intervention requirements
Mortgage secured by borrowers primary residence (exception for small servicers)
What are requirements for early intervention
CU must make good faith effort to establish live contact nlt 36th day of delinquency (and)
Provide written notice not 45th day of dq
What 5 things must early intervention notice contain
1) statement encouraging borrower to contact cu
2) cu mailing address and phone number
3) list of possible loss mitigation options
4) instructions as to how the borrower can obtain more info on loss mitigation options
5) website to access either HUD or CFPB list of homeownership counseling organizations
When is cu exempt from 36 day live contact requirement for early intervention
Borrower is in bk (or) borrower has made a cease communication request under the Fair Debt Collection Practices Act (FDCPA)
What is a “small servicer”
A servicer who (together with their affiliates) services fewer than 5000 loans
What is scope of Continuity of Contact Provision
Mortgage secured by borrowers primary residence
What is requirement of Continuity of Contact Provision
Person or team at cu shall be assigned to a delinquent borrower
Are small servicers exempt from Continuity of Contact Provision
Yes
What is a loss mitigation application
A request for payment relief
What is scope of loss mitigation procedures
Mortgage secured by borrowers primary residence
Are small servicers exempt from loss mitigation procedures
Yes except for requirement that cu cannot proceed to foreclosure until borrower is at least 120 day dq
What must cu do when receive loss mitigation application 45 days or more before foreclosure
Promptly review application for loss mitigation assistance (and) notify borrower within 5 days of the status of the application (complete or incomplete and what is needed to complete)
How long does cu have to render a determination after receiving complete application for loss mitigation assistance
30 days
How long may a borrower appeal cu denial of their loss mitigation application
Within 14 days and the appeal must be considered by a different staff member
Is full loss mitigation process completed each time member falls into dq and applies for LM assistance
Yes, same every time
Must cu have written procedures to follow when presented with information that a person could be a successor in interest for a property
Yes
What are the three reg z disclosures for HELOC
Early program disclosure, account opening disclosure, and periodic billing statement
When must HELOC account opening disclosure required to be provided
Prior to first transaction
When is periodic statement for HELOC required to be delivered
Within a reasonably prompt time (4 days) following close of previous billing cycle
What is general rule for record retention under reg z
2 years
For loans secured by real property, what is record retention requirement for application disclosures
3 years
For loans secured by real property, what is record retention requirement for loan originator compensation records
3 years
For loans secured by real property, what is record retention requirement for closing disclosure
5 years
What is section 8 of RESPA
Kickback provision - prohibits the giving or accepting thing of value for a referral of settlement real estate business (title, appraisal, anything related to a referral for real estate)
Under section 8 is splitting of a fee for a settlement service is allowed if services not actually performed?
No, basically there is a prohibition on unearned fees
What is HMDA (home mortgage disclosure act)
Data collection and reporting regulation used to use to measure compliance with FHA and ECOA
What CUs need to report HMDA data
CU with assets in excess of $54million (as of 12/31/22), have a home office in a metropolitan statistical area, originated at least one home purchase or refi in preceding calendar year, federally insured or regulated, originated at least 25 closed end mortgages in each of preceding two years, originated 200 open end mortgages in each of two preceding calendar years
What transactions are subject to HMDA
Applications for, originations of, and purchases of all loans secured by a dwelling (including HELOC, business purpose loans secured by dwelling, and reverse mortgages)
Does CFPB anonymize info in LAR (loan application register (has data points required by HMDA reporting)) and make public to be strutinized by others?
Yes
When do loans have to be added to the LAR
Within 30 calendar days of final action on the loan
What are “actions taken” for HMDA final action date purposes
Code1 loan originated
Code2 application approved but not accepted
Code 3: app denied
Code 4: application withdrawn by applicant
Code 5: file closed for incompleteness
Code 6 purchased loan
What is the threshold to determine if cu required to report to HMDA quarterly or annually
If more than 60k HMDA reportable transactions on an annual basis, must report on a quarterly basis (for annual reporting do March 1)
What is FHA
Protects from discrimination for housing related activities (including renting)
What are the seven protected classifications under FHA
Gender, national origin, race, color, religion, handicap, familial status
What are the nine protected classes under ECOA
Age, color, gender, marital status, national origin, race, religion, applicant’s exercise of a right under the consumer credit protection act, applicant’s receipt of public assistance income
What are the nine community property states
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
A credit union that receives an application for credit primarily for the purchase or refinance of a principal residence shall request what five pieces of information for ECOA monitoring purposes?
Ethnicity
Race
Sex
Marital status
Age
If force placing flood insurance, when is notice of force placement required to be sent
Nlt 45 days before force placement
When borrower gets flood insurance and there has been forced placed flood insurance, cu must terminate FPFI, refund applicable premium paid into FPFI - what is timing requirement for completing these?
Within 30 days of being notified that the borrower has purchased adequate flood insurance coverage
What are the four types of private mortgage insurance (re, homeowners protection act of 1998)
1) borrower paid (bpmi)
2) lender paid (lpmi)
3) single premium
4) split premium
If cu denies request to cancel bpmi, when must it provide written notice of denial
Within 30 days and identifying the grounds relied upon in denying request
When does automatic PMI termination happen
When loan reaches 78% ltv
When is initial disclosure for PMI given
Consummation
Under SCRA, when does 6% cap end on mortgage related debt
12 months following service members return from active duty
When must a revised LE be received by applicant
Nlt 4 business days before closing
Do federally related mortgages include reverse mortgages
No
Under what regulation is the Appraisal Notice a requirement
Reg B
When does Reg B require appraisal delivery
Promptly upon completion or not 3 bus days prior to consummation, whichever is earlier
What is the NCUA requirement for appraisal delivery?
Federally chartered cus shall make availableupon request a copy of any appraisal obtained in connection with a subordinate lien loan secured by a dwelling
What situation does reg B say adverse action notice required not in 30 days of denial?
Within 90 days of applicant rejection of counter offer
When a cu uses adverse action notice, it is exempt from risk based pricing notification: true or false
True
What is the Notice to Home Applicant Disclosure
Disclosure provided when a credit score is used in connection with a mortgage loan (reg V)
Delivery is as soon as reasonably practicable
Which reg requires HELOC Brochure
Tila
Must an escrow account be established for a high priced mortgage loan?
Yes
