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Mortgage Regulatory Compliance > Origination > Flashcards

Origination Flashcards

1
Q

What of the below is NOT included in the definition of a TRID application?
Applicant’s name
Applicant’s income
Applicant’s social security number
Property address
Appraised value
Loan amount

A

Appraised value

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2
Q

Which definition of business day applies to the timing of sending a Loan Estimate?

-General
-Precise

A

General - the inclusion of Saturdays will be dependent upon whether the credit union is open for substantially all business on Saturdays. If not, then Saturdays are excluded from the counting of days.

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3
Q

Fees are always required on the Settlement Services Provider List?

T/F

A

False, the fees on the good faith estimate will apply to vendors included on the SSPL. It is not necessary to include fees.

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4
Q

Which of the following is NOT an exception to the mandatory appraisal requirement found in NCUA Part 722.3?

-Transactions of less than $100,000
-Transaction involves a real estate lease
-Lien taken only as an abundance of caution
-Transaction is guaranteed by or eligible for sale to a U.S. government agency

A

Transactions of less than $100,000

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5
Q

A federally-chartered credit union is required to make an appraisal copy obtained in connection with a subordinate lien loan available?

-Immediately upon receipt
-Upon the borrower’s request
-No later than 3 business days prior to closing
-At closing

A

Upon the borrower’s request

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6
Q

Which of the following is NOT an element of the definition of mortgage loan originator under the SAFE Act?

-An individual who takes a residential mortgage loan application
-An individual who offers terms of a residential mortgage loan
-An individual who negotiates terms of a residential mortgage loan
-An individual who performs purely administrative and/or clerical tasks

A

An individual who performs purely administrative and/or clerical tasks

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7
Q

Under the SCRA, the interest rate on debts in existence at the time of being called to active-duty service must be reduced to?

A

6%

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8
Q

When is a credit union permitted to foreclose on the mortgage debt for a servicemember who is no longer on active duty ___%

A

12 months following the return from active duty

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9
Q

When must a credit union provide the “Notice to the Home Loan Applicant”?

-Simultaneously with the application
-3 days after application
-As soon as possible
-At the closing

A

As soon as possible

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10
Q

When the credit union uses 5 (A - E) tiers of risk for risk-based lending, what tiers are not required to receive the risk-based pricing notice?

A

Tiers A and B

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11
Q

Varying the terms of credit offered based on credit score is prohibited by the Fair Housing act? T/F

A

False. Varying the terms of credit is based on credit score is permissible under the Fair Housing Act

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12
Q

Which is NOT a protected classification under the Fair Housing Act EXCEPT?

-Age
-Color
-Race
-Religion

A

Age

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13
Q

Which of the following actions would eliminate the fair lending self-test statutory privilege protection?

-Taking corrective action to address violations
-Thoroughly determining the effectiveness of the Fair Housing Act compliance program
-Sending a list of violations to an attorney to file away
-Identifying possible violations

A

Sending a list of violations to an attorney to file away

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14
Q

Which of the following is not an element of the institutional coverage under HMDA?

-Assets in excess of $1.052 billion as of 12/31/2022
-Home or branch office in a Metropolitan Statistical Area (MSA).
-Originating at least one home purchase and/or refinance transaction in the preceding calendar year.
-Federally insured or regulated.

A

Assets in excess of 1.052 billion is not an element.
Assets in excess of 54 million is the threshold for assets.

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15
Q

HMDA data must be added to your credit union’s Loan Application Register (LAR) within _____ calendar days after the end of the quarter in which final action was taken.

A

30

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16
Q

What is the action taken date on an originated loan?

A

The date of origination or the closing date.

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17
Q

Which of the following are not HMDA reportable transactions?

-Reverse mortgages
-Home equity lines of credit
-Business purpose loans secured by a dwelling
-Unsecured home improvement loans

A

Unsecure home improvement loans

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18
Q

When a borrower requests cancellation of PMI – which is not required?

-The borrower is current
-The borrower has a good payment history
-The loan balance has reached 80% of the NEW appraised value of the property
-The property is free of any subordinate liens

A

The loan balance has reached 80% of the NEW appraised value of the property is not a prerequisite when a borrower requests cancellation of PMI.

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19
Q

How many days does the credit union have to refund any unpaid premiums after cancelling borrower paid mortgage insurance?

A

The premium must be refunding within 30 days from cancellation

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20
Q

Private mortgage insurance must be cancelled under the automatic termination provisions of the Homeowner’s Protection Act when the loan balance is scheduled to reach _____ of the original property value.

A

78%

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21
Q

How many days does the credit union have to cancel forced place flood after the borrower provides proof of coverage?

A

30 days from receipt of proof of coverage

22
Q

The “Notice of Special Flood Hazard” disclosure must contain all the following EXCEPT?

-A description of the flood insurance purchase requirements
-The approved FEMA warning that the building is located in a special flood hazard area
-An estimated percentage of the likelihood that the property may flood
-A statement that flood insurance coverage is available under both the NFIP and from private insurers

A

An estimated percentage of the likelihood that the property may flood is not included in the Notice of Special Flood Hazard

23
Q

How many days must the credit union retain a copy of the “Standard Flood Hazard Determination Form” for?

A

The credit union must retain a copy of the “Standard Flood Hazard Determination Form” for the ENTIRE TIME IT OWNS THE LOAN.

24
Q

When must the credit union must provide an “Initial Escrow Account Statement”?

-At the time of closing only
-Within 5 business days of closing only
-Within 30 business days of closing only
-At closing or within 45 calendar days of closing

A

The credit union must provide an “Initial Escrow Account Statement” at closing or within 45 calendar days of closing.

25
Q

How many days past due may a credit union initiate foreclosure proceedings?

A

A credit union initiate foreclosure proceedings 120 days after the account goes delinquent.

26
Q

The credit union can require the borrower to immediately pay the amount of the escrow account deficiency. T/F

A

False. The credit union CANNOT require immediate payment of an escrow account deficiency. The credit union can:
-Allow the deficiency to exist
-Require the borrower to pay the deficiency within 30 days
-Require the borrower to pay the deficiency in 2 or more equal payments

27
Q

A credit union must acknowledge a member’s request for information within _____ days?

A

5 days

28
Q

The written notice required under RESPA’s early intervention requirements must contain all the following EXCEPT?

-The name of the mortgage servicer who is the single point of contact
-The credit union’s mailing address and telephone number
-A statement encouraging the borrower to contact the credit union
-The website to access either HUD’s or the CFPB’s list of homeownership counseling organizations

A

The name of the mortgage servicer who is the single point of contact is not required to be included on the written notice for early intervention.

29
Q

A borrower must include all the following in their notice of error to the credit union EXCEPT?

-Their name
-The contact number for their attorney
-Information sufficient to identify their mortgage loan account (e.g., account number)
-A sufficient description of the alleged error

A

The contact number for their attorney does not have to be included in a notice of error.

30
Q

The credit union must send a notice warning the borrower it will force place insurance ___ days before the force-placed policy is put in place

A

45 days

31
Q

The credit union can send a combined notice with a new servicer 5 days prior to the effective day of a servicing transfer? T/F

A

False. The credit union can send a combined notice with a new servicer 15 days prior to the effective day of a servicing transfer.

32
Q

When must the “Notice of Right to Receive a Copy of an Appraisal Report” be provided to the applicant?

A

The “Notice of Right to Receive a Copy of an Appraisal Report” be provided to the applicant within 3 days of application.

33
Q

The following information must be requested in connection with an application for credit primarily for the purchase or refinance of a principal residence?

-Ethnicity
-Race
-Sex
-All of the above

A

All of the above must be requested with an application for credit.

34
Q

Disparate intentions are prohibited under the Equal Credit Opportunity Act. T/F

A

False! Overt discrimination, Disparate treatment, and Disparate impact are prohibited under the Equal Credit Opportunity Act.

35
Q

Which of the following is NOT considered a valuation under Regulation B?

-Tax assessed value
-Appraisal
-Broker price opinion
-Automated valuation model

A

Tax assessed value is not considered a valuation under Regulation B.

36
Q

An “Adverse Action Notice” must be provided within 30 days of taking all the following actions EXCEPT?

-Taking adverse action on a completed application
-Extending a counteroffer to an applicant that is not accepted
-Taking adverse action on an incomplete application
-Taking adverse action on an existing account

A

Extending a counteroffer to an applicant that is not accepted - this requires a notices within 90 days of the extension of the counteroffer.

37
Q

Which of the following would NOT be a permissible question under the Equal Credit Opportunity Act?

-“How many dependents do you have?”
-“Do you anticipate having any children during the loan term?”
-“What is the current age of each of your dependents?”
-“What are the expenses associated with each of your dependents?”

A

It is not permissible to ask if the applicant anticipates having any children during the loan term.

38
Q

The credit union can create loan products designed specifically for persons 45 and older? T/F

A

False. The credit union can create loan products designed specifically for persons 62 and older.

39
Q

The credit union must issue an adverse action in all of the following situations except:

-A refusal to grant new credit requested
-An unfavorable change in the terms of an existing account
-A member’s expressed notification to withdraw
-A refusal to grant a requested increase in the limit of an existing account

A

The credit union does not issue an adverse action when the member expressly withdraws.

40
Q

The credit union does not have to provide a copy of the appraisal when the member expressly withdraws. T/F

A

False. The appraisal must be provided when a loan is originated, the application was denied and when the application is withdrawn or cancelled.

41
Q

Marital status must be considered when assessing the ability to repay? T/F

A

False. Marital status is not required in an assessment of the ability to repay.

42
Q

How far in advance of the due date for the new adjusted payment must a credit union send the “Initial Rate Adjustment Notice”?

A

The credit union must send the “Initial Rate Adjustment Notice210 to 240 days in advance of the due date for the new adjusted payment.

43
Q

The “Closing Disclosure” must be received by the borrower no later than 3 general business days before closing. T/F

A

False. The “Closing Disclosure” must be received by the borrower no later than 3 precise business days before closing. Only Sundays will be excluded for the counting of days for the CD!

44
Q

All persons with an ownership interest in the subject property MUST exercise the right to rescind in order to cancel the transaction. T/F

A

False. If only one person with an ownership interest in the subject property exercises the right to rescind, the transaction is cancelled.

45
Q

Under Reg Z, the general definition of business day is:

-Any calendar day other than Sunday or legal public holidays
-Any day on which the creditor’s offices are open for carrying on substantially all of its business functions
-Monday through Friday
-All calendar days except legal public holidays

A

Under Reg Z, the general definition of business day is any day on which the creditor’s offices are open for carrying on substantially all of its business functions.

46
Q

A high-cost mortgage CAN have an acceleration clause. T/F

A

False

47
Q

The closing manager has to make a good faith cure after closing. She wants to send a VISA gift card. Will you tell her that’s a good idea?

A

Absolutely NOT! The permissible methods of making a good faith cure are: Issuing a credit on the Closing Disclosure, Refunding any overage to the member no later than 60 calendar days after closing or making a
Principal reduction. Sorry - no VISA gift cards!

48
Q

All the following are elements of a qualified mortgage EXCEPT?

-Limitation on points and fees
-Regular periodic payments
-45% maximum debt-to-income ratio
-Term not to exceed 30 years

A

45% maximum debt-to-income ratio is not an element of a qualified mortgage.

49
Q

A TRID application includes all of the following except:
Loan amount

-Property address
-Member’s name
-Member’s date of marriage
-Estimate property value

A

Member’s date of marriage is not included in the TRID definition of application.

50
Q

The member requests changing the loan product on the day before closing. The credit union revises the disclosure and closes the loan the same day. Does the closing violate TRID?

A

Yes. A change in loan product requires redisclosure and a new 3 day waiting period. The closing should have been rescheduled.

51
Q

The credit union is making a higher priced loan with a balloon payment. What amount will the underwriter use to qualify the member?
-The monthly payment amount
-Two times the monthly payment amount
-The maximum payment amount scheduled during the first 5 years of the loan
-The maximum payment amount during the entire payment schedule

A

On a higher priced loan with a balloon payment, the underwriter will use the maximum payment amount during the entire payment schedule to determine if the member has the ability to repay.

Mortgage Regulatory Compliance (1 decks)

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