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MLO Test 844 Affinity Facts > OTHER FEDERAL LAWS > Flashcards

OTHER FEDERAL LAWS Flashcards

1
Q
  1. The Home Mortgage Disclosure Act (HMDA) is implemented by the
A

Federal Reserve Board’s REGULATION C.

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2
Q
  1. HMDA information is found on Section -
A

Section 8 (Demographic Information) of the1003 Loan Application.

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3
Q
  1. HMDA determines if
A

financial institutions are serving the housing needs of their communities.

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4
Q
  1. HMDA laws were written in response to
A

the public concerns that lenders were “redlining”.

(Because of all the redlining that was taking place – HMDA rules and regulations were created to help “identify” possible redlining. Redlining is found under the Fair Housing Act.)

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5
Q
  1. HMDA requires lending institutions to
A

report public loan data. More specifically, HMDA requires lenders to file annual reports regarding the ethnicity, race, and sex of all applicants. These reports are due every year in March.

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6
Q
  1. The log of applications that a creditor must keep and provide to the federal government is called a
A

Loan Application Register (or LAR).

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7
Q
  1. HMDA reports (LARs) must be maintained for -
A

for three years.

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8
Q
  1. HMDA does NOT set lending quotas for protected classes of borrowers. HMDA does not expressly prohibit redlining or require that a certain number of loans be made in certain neighborhoods. Instead, lenders subject to HMDA must compile certain data, provide the data in a certain format to government agencies, and make available to the public, a disclosure statement regarding that institution’s lending activities.
A
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9
Q
  1. HMDA requires a lending institution to post a general notice about
A

the availability of HMDA data in the lobby of its home office and in the lobby of each branch office located in a metropolitan area.

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10
Q
  1. HMDA data must be maintained and made available upon request, for -
A

three (3) years.

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11
Q
  1. The Community Reinvestment Act is a regulation designed to -
A

help meet the credit needs of the communities in which it operates.

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12
Q
  1. The Federal Financial Institutions Examination (FFIEC) Council is a formal U.S. government interagency body composed of five banking regulators that is “empowered to prescribe uniform principles, standards, and report forms to promote uniformity in the supervision of financial institutions”
A
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13
Q
  1. Role of FFIEC -
A

Compiles information as individual disclosure statements foreach institution, and in the form of aggregate reports for all covered institutions.

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14
Q
  1. The Gramm-Leach-Bliley Act (GLBA) includes provisions to
A

protect consumer’s personal financial information held by financial institutions.

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15
Q
  1. Another name for the Gramm-Leach-Bliley Act is the -
A

Financial Services Modernization Act.

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16
Q
  1. The GLBA requires financial institutions to -
A

give their customers privacy policies that explain the financial institutions’ information-sharing practices. In turn, consumers have the right to limit some sharing of their information.

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17
Q
  1. Under the GLBA Privacy Rule –
A

a borrower receive the Privacy Policy Notice at first contact, and thereafter, once a year as long as he/she remains a customer

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18
Q
  1. Consumers and customers have the right to -
A

opt-out of having their information shared with certain third parties per the GLB Act.

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19
Q
  1. The GLBA has SPF –
A

Safeguarding Policies, Pretexting Policies and Financial Privacy Policies.

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20
Q
  1. The Gramm-Leach-Bliley Act requires all financial institutions to design, implement and maintain-
A

safeguards to protect customer information.

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21
Q
  1. The Gramm-Leach-Bliley Act applies to
A

financial institutions that give loans or financial advice.

(This includes mortgage brokers, lenders, tax preparers and debt collectors.)

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22
Q
  1. According to the GLBA a CONSUMER is
A

an individual who obtains or has obtained a financial product or service from a financial institution for personal, family or household reasons.

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23
Q
  1. According to the GLBA a customer is a consumer with
A

a continuing relationship with a financial institution.

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24
Q
  1. GLBA Financial Privacy Rule -
A

governs collection of non-public personal information (NPI), restricts when information may be disclosed to affiliates and non-affiliated third parties, prohibits disclosure of access codes and account numbers to non-affiliated third parties, requires Consumer Privacy Notice.

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25
Q
  1. Non-public Personal Information (NPI) is -
A

“NPI is any personally identifiable financial information that a financial institution collects about an individual in connection with providing a financial product or service, unless that information is otherwise publicly available.’’

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26
Q
  1. GLBA Pretexting Rule -
A

protects consumers from individuals and companies that obtain their personal financial information under false, fictitious, or fraudulent pretenses (pretenders).

27
Q
  1. GLBA provides guidance to institutions regarding sharing of
A

non-public information and requires at a minimum they disclose: what information is collected about its customers and to whom they share it with.

28
Q
  1. Penalty for fraudulently obtaining personal information is up to -
A

five years in prison and a fine.

29
Q
  1. The Federal Communication Commission (FCC) and the Federal Trade Commission (FTC) established the
A

national Do-Not-Call (DNC)Registry.

30
Q
  1. Telemarketers and sellers are required to search the registry at least -
A

once every 31 days and drop from their call lists the phone numbers of consumers who have registered.

31
Q
  1. Violators of the DNC list could be fined up to
A

$43,792 per call, as each call, NOT EACH DAY , is considered a separate incident.

32
Q
  1. Both the national DNC list and the internal DNC list must be
A

updated every 31days and records to document this must be maintained for 24 months.

33
Q
  1. The National Do-Not-Call Registry does not limit calls by
A

does not limit calls by political organizations, charities, or telephone surveyors

34
Q
  1. Telemarketing calls may only be placed between -
A

8am and 9pm
(in the time zone of the consumer being called)

35
Q
  1. A company with which a consumer has an 𝐞𝐬𝐭𝐚𝐛𝐥𝐢𝐬𝐡𝐞𝐝 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩 may call for up to
A

18 months after the consumer’s last purchase, last delivery, or last payment unless the consumer asks the company not to call again.

36
Q
  1. If a consumer makes an inquiry or submits an application to a company -
A

the company can call for 3 𝙢𝙤𝙣𝙩𝙝𝙨..

37
Q
  1. Do Not Fax - Advertisers may not send a message to anyone’s
A

𝗳𝗮𝘅 𝗻𝘂𝗺𝗯𝗲𝗿 𝘂𝗻𝗹𝗲𝘀𝘀: 𝘁𝗵𝗲𝘆 𝗵𝗮𝘃𝗲 𝗮𝗻 𝗲𝘀𝘁𝗮𝗯𝗹𝗶𝘀𝗵𝗲𝗱 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗿𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽, 𝗳𝗮𝘅 𝗻𝘂𝗺𝗯𝗲𝗿 𝗶𝘀 𝗽𝘂𝗯𝗹𝗶𝗰 𝗶𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻, 𝗿𝗲𝗰𝗶𝗽𝗶𝗲𝗻𝘁 𝗴𝗿𝗮𝗻𝘁𝗲𝗱 𝗽𝗲𝗿𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗮𝗻𝗱 𝗮𝗱𝘃𝗲𝗿𝘁𝗶𝘀𝗲𝗺𝗲𝗻𝘁 𝗵𝗮𝘀 𝗰𝗹𝗲𝗮𝗿 𝗼𝗽𝘁-𝗼𝘂𝘁 𝗶𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗳𝗶𝗿𝘀𝘁 𝗽𝗮𝗴𝗲 𝗼𝗳 𝘁𝗵𝗲 𝘁𝗿𝗮𝗻𝘀𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗳𝗼𝗿 𝗿𝗲𝗰𝗶𝗽𝗶𝗲𝗻𝘁𝘀 𝘄𝗵𝗼 𝗻𝗼 𝗹𝗼𝗻𝗴𝗲𝗿 𝘄𝗶𝘀𝗵 𝘁𝗼 𝗿𝗲𝗰𝗲𝗶𝘃𝗲 𝗳𝗮𝘅𝗲𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝘀𝗲𝗻𝗱𝗲𝗿. 𝗧𝗵𝗲 𝗽𝗲𝗻𝗮𝗹𝘁𝘆 𝗳𝗼𝗿 𝘃𝗶𝗼𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗶𝘀 $𝟱𝟬𝟬 𝗽𝗲𝗿 𝘂𝗻𝗮𝘂𝘁𝗵𝗼𝗿𝗶𝘇𝗲𝗱 𝗳𝗮𝘅.

38
Q
  1. The Mortgage Assistance Relief Services (MARS) Rule Regulation O - applies to
A

negotiators assisting borrowers with 𝗺𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗹𝗼𝗮𝗻 𝗺𝗼𝗱𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 .

(The Mortgage Assistance Relief Services (MARS) Rule helps to protect distressed homeowners from foreclosure-prevention scams.)

39
Q
  1. MARS bans collecting fees until
A

homeowners have an acceptable written offer from the lender or servicer.

40
Q
  1. MARS prohibits advising consumers
A

To 𝒅𝒊𝒔𝒄𝒐𝒏𝒕𝒊𝒏𝒖𝒆 𝒄𝒐𝒎𝒎𝒖𝒏𝒊𝒄𝒂𝒕𝒊𝒐𝒏 𝒘𝒊𝒕𝒉 𝒍𝒆𝒏𝒅𝒆𝒓𝒔.

41
Q
  1. The Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) laws require companies to
A

𝙛𝙞𝙡𝙚 𝙖 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙮 𝙏𝙧𝙖𝙣𝙨𝙖𝙘𝙩𝙞𝙤𝙣 𝙍𝙚𝙥𝙤𝙧𝙩 𝙬𝙞𝙩𝙝 𝙩𝙝𝙚 𝙄𝙍𝙎 𝙛𝙤𝙧 𝙘𝙖𝙨𝙝 𝙩𝙧𝙖𝙣𝙨𝙖𝙘𝙩𝙞𝙤𝙣𝙨 𝙚𝙭𝙘𝙚𝙚𝙙𝙞𝙣𝙜 $10,000 𝙞𝙣 𝙤𝙣𝙚 𝙙𝙖𝙮.

(The act requires financial institutions to keep detailed records of cash transactions exceeding $10,000(withdrawing, depositing, or transporting).)

42
Q
  1. The BSA act also requires that loan originators report suspicious activity that might be a sign of tax evasion, money laundering, or other possible criminal activity. MLOs are required to report any suspicious activity exceeding $5,000.
A
43
Q
  1. Money laundering involves bringing illegally obtained funds into and out of the financial system in a manner that evades law enforcement
A

(Laundered funds are often linked to such serious crimes as terrorism, arms smuggling and drug trafficking)

44
Q
  1. Under the BSA/AML the government requires financial intuitions to file Suspicious Activity Reports (SARs) within -
A

30 days of detecting suspicious activity if the perpetrator is an identifiable person, or within 60 days of initial Detection if the perpetrator cannot be identified.

45
Q
  1. The BSA act requires financial institutions to keep detailed records of cash transactions exceeding
A

$10,000 (withdrawing, depositing, or transporting).

46
Q
  1. BSA/AML The act also requires that loan originators report suspicious activity that might be a sign of tax evasion, money laundering, or other possible criminal activity,
A

MLOs are required to report any suspicious activity exceeding $5,000.

47
Q
  1. Copies of the SAR reports must be kept for-
A

at least five years.

48
Q
  1. The Homeowner’s Protection Act (HPA) requires lenders to cancel -
A

the PMI when the LTV reaches 78% of the original purchase price.

49
Q
  1. Under the HPA, Borrowers can request a cancellation when it -
A

reaches 80%, which will usually be granted if they have a good payment history.

50
Q
  1. HPA Allows borrowers to accelerate the cancellation date by making -
A

additional payments that bring the LTV to 80%.

51
Q
  1. Lenders may require evidence that the value of the property has not declined below its -
A

original value and that the property does not have a second mortgage, such as a home equity loan.

52
Q
  1. The E-Sign Act allows
A

electronic records and electronic signatures to be valid

( whenever a regulation requires a document to be in writing as long as the consumer has consented to its use.)

53
Q
  1. The E-Sign Act ensured the validity and legality of -
A

contracts and documents that are entered into by electronic methods.

54
Q
  1. The E-Sign act, a party to a contract cannot be forced to use -
A

electronic signature methods and may sign in ink.

( also called “wet signature”. One party can use electronic signature method, while the other party to the contract can retain the right to sign the document personally (wet signature) )

55
Q
  1. The USA Patriot Act requires mortgage applicants to provide their
A

name, address, social security number or employee identification number and a government issued photo ID.

56
Q
  1. The USA Patriot Act increased the ability of law enforcement agencies to
A

search telephone, email, medical and financial records.

57
Q
  1. The USA Patriot Act was created to prohibit _____ ______ and the _______ _____ .
A

money laundering and the financing of terrorist activities.

58
Q
  1. The USA Patriot Act requires financial institutions to verify the -
A

𝗶𝗱𝗲𝗻𝘁𝗶𝘁𝘆 𝗼𝗳 𝗮𝗰𝗰𝗼𝘂𝗻𝘁 𝗵𝗼𝗹𝗱𝗲𝗿𝘀

(And compare the account names to names in a federal database of fugitives and suspected terrorists, establish an anti-money laundering policy and train employees on the policy)

59
Q
  1. Mortgage Acts and Practices (REG N) – deals with
A

Advertising of Mortgage Products

(MAPS Regulation N was issued by the CFPB in order to prohibit false or misleading advertising of mortgage products.)

60
Q
  1. MAPS applies to any “commercial advertisement” designed to produce a sale or to create interest in mortgage products or services. It is illegal to misrepresent any loan terms or conditions in an advertisement.
A

MAP IS REGULATION N

61
Q
  1. In general, Regulation N prohibits misleading claims by
A

mortgage lenders

(concerning government affiliation, interest rates, fees, cost, payments associated with the loan, and the amount of cash or credit available to the consumer in any commercial advertisement)

62
Q
  1. Copies of commercial communications and supporting documents must be kept for -
A

for2 years.

63
Q
  1. The HUD Equal Access Rule states that a lender cannot inquire about-
A

an applicant’s sexual orientation or gender identity

MLO Test 844 Affinity Facts (15 decks)

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