Questions #2 Flashcards
The Safeguards Rule is a component of what federal regulation?
The Gramm-Leach-Bliley Act, among other things, requires all financial institutions to implement a program to protect the sanctity of customers’ and consumers’ non-public, personal information. This program must be assigned an individual overseer, must be periodically updated, and must be regularly tested.
Which of the following regulations requires all financial companies and some creditors to implement an identity theft prevention program?
The FTC’s Red Flags Rule, among other things, requires that all financial institutions and some creditors implement and administer an identity theft prevention program that identifies the red flags of identity theft, designs a method of detecting the red flags identified, spells out the appropriate actions that anyone detecting a red flag must take, and details how the institution will keep its identity theft prevention program current to react to new threats.
this is when the lender provides the settlement agent with the loan proceeds.
Providing the proceeds to “fund” the loan is known as funding.
The maximum LTV permitted through an FHA cash-out refinance is:
80%.
An option loan affords all but which of the following four payment options:
minimum payment which could lead to negative amortization and payment shock, interest only which could lead to payment shock, a 15-year payment equivalency, and a 30-year payment equivalency.
non traditional credit report - # of trade lines and age to get a mortgage?
A non-traditional credit report must contain a minimum of four tradelines with one being residential. All tradelines used must also contain a minimum 12-month history.
Which of the following is a consequence of exercising one’s right to rescind?
When a right to rescind is exercised, the new loan does not fund, the loan which it may have originally intended to refinance does not pay in full, and any money that the applicants paid into the transaction must be fully refunded to them within 20 calendar days.
How would the reissuance of a Closing Disclosure affect the loan closing?
When a revised Closing Disclosure is issued, three additional precise business days must elapse before the customer may consummate the transaction in order to provide the customer with ample time to consider the changes and into what they’re entering.
example of a standard ARM?
A 1/1 is an example of a standard ARM. A standard ARM carries an initial interest rate that is stable for the first year and adjusts annually thereafter.
Prior to closing on a HOEPA loan, the borrower must:
Customers seeking to close on a loan that exceeds one or more of the established HOEPA thresholds must complete homeownership counseling from a HUD-approved counseling agency. Within three business days of receiving an application for a HOEPA loan, lenders must provide the applicant with a list of 10 homeownership counseling agencies that are closest to the zip code of the applicant’s current address.
Once a Closing Disclosure is issued can a revised LE be issued?
Once the Closing Disclosure is issued, the lender may not issue a revised Loan Estimate. If a valid change of circumstance occurs between the fourth and third days prior to closing but before the issuance of the Closing Disclosure, the lender may reflect the changes on the Closing Disclosure.
When must a Loan Estimate be issued to an applicant in accordance with TRID?
three general business days from the date of application
By when must a revised Loan Estimate be reissued in the presence of a valid change of circumstance?
no later than three general business days from the date of the change of circumstance.
What is Life of Loan?
The life-of-loan cap establishes an interest rate ceiling beyond which a particular loan’s adjustable interest rate may not climb.
What are the 4 typles of ARM caps?
1) initial adjustment, 2) periodic 3) life-of-loan 4) payment.
Committing fraud pertaining to a federally-guaranteed or insured loan may result in a penalty of
30yrs in prison and $10K fine
What is a full factual
A full factual (also referred to as an investigative consumer report) is a real-time verification and accurate report reflecting a consumer’s complete credit profile ascertained through interviews with the consumer and his or her creditors.
The legal description of the property being financed appears on the:
The schedule A of a title insurance binder describes who is listed as the owner or owners of record on a property and also provides the property’s legal description.
Who’s responsibility to certify permissible purpose to the CRA?
It is the user’s responsibility to certify permissible purpose to the CRA from which it ascertains consumer credit information. FCRA requires furnishers to notify CRAs when previously-reported information warrants correction, when a customer disputes the accuracy or completeness of previously-provided information, when customers become delinquent, and with the results of the investigation it must conduct along with whatever corrective action it is taking, if applicable, within 30 days of receipt of notification from a CRA informing it of a customer dispute.
Model State Legislation:
is Min Licensing Standards. The Model State Legislation is the basic foundation constituting the SAFE Act’s implementation. States may individually layer on top of this basic model.
what are the three standard appraisal approaches?
1) The cost approach 2) income approach 3) The sales comparison approach
Residential mortgage loans that do not require a right of rescission
purchase transactions, refinances of non-primary residential properties, original mortgages refinanced through their original lenders, and refinances through state agencies.
3 ways FTC’s Disposal Rule mandates that any non-public, personal information be disposed of
shredding, burning, or pulverizing
