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
