Mortgage Lending Flashcards
What tolerance applies to fees charged by a lender affiliate under RESPA?
Zero tolerance
According to the SAFE act, a mortgage loan officer is someone who?
Takes the application and negotiates rates and terms with the member
How many days does a lender have to provide an initial loan estimate after receipt of a TRID application?
3 general business days (Saturdays only included if lender is open for substantially all its business on Saturdays)
When an escrow account is established as a condition of a mortgage loan, the CU must provide an Initial Escrow Account Statement:
At closing or within 45 calendar days of closing
What 6 pieces of information constitute a TRID application?
Name, income, SSN, property address, estimated property value, and loan amount
Which transactions require an appraisal according to NCUA Part 722?
Residential mortgage loans exceeding 400k
Which transactions require an appraisal according to NCUA Part 722?
Residential mortgage loans exceeding 400k
What information is provided in the Homeownership Counseling Notice?
A list of HUD approved housing counseling agencies serving the borrower’s area
True or False: The Fair Housing Act prohibits Credit Scoring.
False
How often and when must a lender who originated 15,000 closed end mortgages report its HMDA data?
Annually on March 1st of the following year
True or False: The SAFE act requires a MLO to provide his NMLS # in his initial written communication with the borrower.
True
Under the SCRA the interest rate on debts in existence at the time of being called to active duty must be reduced to?
6%
What is meant by “Disparate outcome” in the context of fair lending laws?
Unintentional discrimination resulting in unequal treatment
Under what circumstances can a borrower request cancellation of PMI?
Once the loan balance reaches 78% of the original property value
Real Estate owned by a service member may not be foreclosed upon during their term of active duty service or for a period of _____ following their return from active duty.
12 months
True or False? Under the Fair Housing Act credit unions may vary the terms of credit offered based on credit score.
True
True or False? Correcting a mistake made in a Loan Estimate is a Valid Change in Circumstance.
False
What is the maximum percentage of allowable fees for a High-Cost Mortgage loan?
5% of the total loan amount
When must a mortgage servicer notify a borrower about the placement of force-placed insurance?
Within 15 days of determining that the borrower’s hazard insurance has lapsed or become insufficient.
What is the HMDA final action date?
The date of consummation, settlement, or closing date
What conditions must be met for Borrower requested cancellation of PMI?
Borrower is current, has good payment history, loan balance has reached 80% of the original property value, and property is free of any subordinate liens
What is the maximum allowable time frame for a mortgage servicer to acknowledge receipt of a written notice of error from a borrower according to RESPA?
5 business days
The loss mitigation procedures found in RESPA prohibit a CU from foreclosing until the borrower is at least ____ days past due.
120
True or False: If the CU discovers a deficiency in an escrow account that is less than 1 month’s escrow payment, it is permitted to allow the deficiency to exist.
True
What distinguishes a High Priced Mortgage Loan from other loans?
It has an APR that exceeds the Average Prime Offer Rate by a specified threshold
How many days prior to closing must a Closing Disclosure be provided to a borrower?
3 business days (precise)
What does a safe harbor provision provide for mortgage lenders?
A level of protection by establishing specific actions or practices that ensure compliance with certain legal requirements
3 forms of discrimination recognized by the ECOA?
Overt Discrimination
Disparate treatment
Disparate impact
3 forms of discrimination recognized by the ECOA?
Overt Discrimination
Disparate treatment
Disparate impact
Name the 5 types of Mortgage products
Fixed Rate Mortgage
Adjustable Rate Mortgage (ARM)
Closed End Home Equity loan
Home Equity Line of Credit (HELOC)
Reverse Mortgage
A Point is traditionally _% of the loan amount.
1%
Escrow
Am account held by the CU to pay taxes and insurance on behalf of the borrower.
RESPA
Real Estate Settlement Procedures Act
PITI
Principal, Interest, Taxes, and Insurance
ITP
Intent to Proceed
What Regulation does the Home Mortgage Disclosure Act fall under?
Regulation C
What Regulation does the Real Estate Settlement Procedures Act fall under?
Regulation X
What are the 3 parts of the Lifecycle of a Mortgage loan?
- Origination
- Servicing
- Default
What are the 2 parts of the ARM interest rate?
Prevailing Index plus Margin
Loan Amount/appraised value
Loan to Value (LTV)
