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NMLS-SAFE Vocabulary > RESPA, TILA, ECOA, HPA, GLBA > Flashcards

RESPA, TILA, ECOA, HPA, GLBA Flashcards

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1
Q

RESPA Purpose

A

To promote the informed use of consumer credit through disclosures about its terms and cost. Ensures that consumers can make informed decisions about real estate transactions by understanding costs for settlement.

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2
Q

RESPA Governs

A

All federally regulated mortgage loans that are secured by residential property.

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3
Q

RESPA Doesn’t Govern

A

Loans on residential property of more than 25 acres

  • Loans for income-producing properties like farms or commercial properties like office buildings or storefronts
  • Properties that have a business purpose
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4
Q

Section 6

A

Servicing

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5
Q

Section 8

A

Referrals

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6
Q

Section 9

A

Title Agent

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7
Q

Section 10

A

Escrow

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8
Q

Mortgaging Servicing Disclosure Statement (MSDS)

A

Servicing

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9
Q

Notice of Transfer Statement (NTS)

A

Servicing

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10
Q

Affiliated Business Arrangement Disclosure (ABA, Af BA)

A

Referrals

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11
Q

Initial and Annual Escrow Statements

A

Escrow

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12
Q

Provide timely and accurate information in relation to an information request, complaint, foreclosure process, or death of a borrower

A

Section 6

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13
Q

Properly oversee and ensure compliance of all employees with relation to procedures and laws

A

Section 6 Servicing

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14
Q

Properly process and evaluate loss mitigation applications

A

Section 6 Servicing

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15
Q

Ensure necessary information about probable or actual transfer of servicing are disclosed and ensure that all documentation is transferred during actual servicing transfer situations

A

Section 6 Servicing

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16
Q

Payment or provisions of a thing of value in exchange for a referral is outlawed under RESPA

A

Section 8 Referrals

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17
Q
  • Prohibits referrals and kickbacks
A

Section 8 Referrals

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18
Q

Requires that MLOs disclose to their client if they are referring them to a company with whom the MLO is affiliated

A

Section 8 Referrals

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19
Q

Borrowers have the right to choose their own title agent

A

Section 9 Title Agent

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20
Q

Initial and Annual Escrow Statements

A

Section 10 Escrow

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21
Q

Protects consumer’s escrow accounts

A

Section 10 Escrow

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22
Q

Requires borrowers to be informed about their escrow account

A

Section 10 Escrow

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23
Q
  • Permits the servicer to collect a maximum of 1/6 (or 2 months) of the borrower’s annual tax and insurance payment
A

Section 10 Escrow

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24
Q

Informs the borrower that their loan may be assigned to another company for servicing

A

Section 6 Mortgaging Servicing Disclosure Statement

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25
Q

Informs the borrower that their loan is being placed with a new servicer

A

Section 6 Notice of Transfer Statement

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26
Q

Informs the consumer of the business arrangement between the two parties

A

Section 8 Affiliated Business Arrangement Disclosure

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27
Q

Explains the amount needed for escrow and breaks down each payment

A

Section 10 Initial and Annual Escrow Statements

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28
Q

Informs the borrower of local counseling organizations

A

Homeownership Counseling Organization List

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29
Q

Good Faith Estimate

A

Informs the consumer of expected costs of the completed transaction and is good for 10 business days

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30
Q

At application or within 3 days (excluding legal public holidays) on first lien mortgages

A

Mortgaging Servicing Disclosure Statement

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31
Q

Notice of Transfer Statement

A

15 days prior to the transfer of servicing and 15 days after the servicing is transferred

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32
Q

Affiliated Business Arrangement Disclosure

A

At the time of referral

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33
Q

Initial and Annual Escrow Statements

A

At closing

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34
Q

At application or within 3 business days if mailed

A

Homeownership Counseling Organization List

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35
Q

At application or within 3 business days if mailed

A

Good Faith Estimate

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36
Q

TILA

A

To promote the informed use of consumer credit through disclosures about its terms and cost.

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37
Q

TILA

A

Regulation Z

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38
Q

RESPA

A

Regulation X

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39
Q

TILA Governs

A

Organizations that provide consumer credit

-Mortgages, Auto loans, Credit Cards

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40
Q

TILA Does’t Govern

A

Business or Commercial Credit

            - Business, agriculture or organization credit
            - Credit >$58,300 if not secured by real property
            - Public utility credit 
            - Student Loans
            - Home fuel budget plans 
            - Credit from a broker
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41
Q

Section 19

A

Mortgage Disclosure Improvement Act (MDIA)

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42
Q

Mortgage Disclosure Improvement Act (MDIA)

A

Requires a 7-business day waiting period between delivery of the initial disclosure and loan closing

43
Q

Mortgage Disclosure Improvement Act (MDIA):

A

-Intent to proceed provision for closed-end mortgages

44
Q

Mortgage Disclosure Improvement Act (MDIA):

A

-Require Delivery of Charm Booklet and Early ARM Disclosure

45
Q

Section 23

A

The Right of Rescission

46
Q

The Right of Rescission

A

Allows consumers to back out of refinance and reverse mortgages after closing within 3 business days

47
Q

Section 32

A

Home Ownership Equity Protection Act (HOEPA

48
Q

Home Ownership Equity Protection Act (HOEPA

A
  • Protect consumers with limited finances or credit challenges from excessive cost during financing
49
Q

Home Ownership Equity Protection Act (HOEPA

A
  • Three high price loans determining criteria (APR to APOR, Prepayment penalty, Minimum term for balloon loans)
50
Q

Higher Priced Mortgage Loans (HPML):

A

Protects borrowers who have qualification limitations

51
Q

Section 35

Higher Priced Mortgage Loans (HPML):

A

Requires mandatory escrow accounts and full physical appraisals

52
Q

Section 36

A

The Loan Originator Rule

53
Q

Section 36

The Loan Originator Rule

A

Added by CFPB to address MLO behavior

54
Q

Section 36

The Loan Originator Rule

A

Limits how MLOs are compensated

55
Q

Section 36

The Loan Originator Rule

A

Ensures servicers process payments on receipt date, handle late payments appropriately and provide payoff statements within 7 business days

56
Q

Section 35

A

Higher Priced Mortgage Loans (HPML)

57
Q

Section 36

The Loan Originator Rule

A

Prohibits fee pyramids or fee stacking

58
Q

Section 42

Valuation Independence

A

Outlaws the coercion and undue influence on property appraisers by MLO and borrowers

59
Q

Section 42

Valuation Independence

A

Forbids requiring or compelling an appraiser to falsify the appraisal

60
Q

Section 43

A

Ability to Repay (ATR) and Qualified Mortgages (QM)

61
Q

Ability to Repay (ATR) and Qualified Mortgages (QM)

A

Guidance on how lenders should administer high risk mortgage products

62
Q

Ability to Repay (ATR) and Qualified Mortgages (QM)

A

Deals with 3 key areas (loan terms and underwriting, risk management policies for lenders and MLOs, Consumer protection issues

63
Q

Ability to Repay (ATR) and Qualified Mortgages (QM)

A

Less risky due to standards and considerations (8)

64
Q

General TILA Disclosure

A

Requires that the mortgage loan originator discloses specified statements to the consumer as a part of the consumer credit origination transaction

65
Q

Loan Estimate (LE)

A

Provides estimate of all costs for the transaction

66
Q

HOEPA Disclosure (Covered Loan Notice)

A

Required for high cost loans

67
Q

Home Loan Toolkit (Special Information Booklet)

A

Informs the consumer of the mortgage process

68
Q

Consumer Handbook on Adjustable Rate Mortgage

A

Educates the consumer on risks and advantages of ARMs

69
Q

Early ARM Disclosure

A

Educates the consumer on the specifics of ARM

70
Q

Initial Interest Rate Adjustment Disclosure

A

Provides the effective date of the new interest rate and new payment amount as well as any other changes to loan terms

71
Q

Loan Estimate (LE)

A

At the time of application

72
Q

Closing Disclosure (CD)

A

3 days prior to consummation of the loan

73
Q

HOEPA Disclosure (Covered Loan Notice)

A

At least 3 business day prior to consummation

74
Q

Notice of Right to Cancel (Right to Rescind)

A

At consummation

75
Q

Home Loan Toolkit (Special Information Booklet)

A

At application

76
Q

Consumer Handbook on Adjustable Rate Mortgage

A

Due at application

77
Q

Early ARM Disclosure

A

At application

78
Q

Initial Interest Rate Adjustment Disclosure

A

210 to 240 days prior to rate adjustment

79
Q

Ongoing (Subsequent) Interest Rate Adjustment

A

Provides the effective date of the new interest rate and the new payment amount and any other changes to the loan terms

80
Q

Ongoing (Subsequent) Interest Rate Adjustment

A

60 to 120 prior to rate adjustment

81
Q

Initial Truth in Lending Statement (TIL)

A

Provides an estimate of the cost for financing

82
Q

Final Truth in Lending Statement (FTIL)

A

Provides an estimate of the cost for financing at closing or 1 day prior if requested by borrower

83
Q

ECOA

A

The Equal Credit Opportunity ACT

84
Q

ECOA

A

Regulation B

85
Q

ECOA

A

To promote the availability of consumer credit to all applicants by prohibiting credit decisions based on race, color, religion, national origin, gender, marital status, or age.

86
Q

Notice of Action Taken

A

To notify applicants, by the creditor, whenever an action is taken, or a decision is made about their credit application status.

87
Q

Notice of Action Taken

A

Due

  • Credit is approved/counteroffer (30 day of app)
  • Application is incomplete (30 days of app)
  • Credit offer is unused/not accepted/counteroffer (90 days after offer)
  • Credit is denied (Adverse Action Notice – within 30 days of application)
88
Q

Notice of Right to Receive an Appraisal

A

To inform the borrower of their right to a copy of their appraisal report.

89
Q

Must be retained for a minimum of 25 months by the MLO

A

Notice of action Taken

  • Incomplete application disclosure
  • Monitoring program disclosure
  • Complaints or other written statements from a consumer
90
Q

Notice of Right to Receive an Appraisal

A

Once it has been processed by the MLO the borrower is entitled to a copy of the appraisal report if one is performed on the property

91
Q

Notice of Right to Receive an Appraisal

A
  • If borrower doesn’t qualify for an appraisal an alternative (online data analysis tools or a broker’s price opinion, OBO, would be used to determine value. A copy is must be provided to the borrower.
92
Q

ECOA

A

Civil penalties up to $5,000 per day with definitive patterns of discriminatory behaviors penalized up to $25,000

  • Punitive damages: Individual violation as high as $10,000; Class action is less than or equal to $500,000 or 1% of net worth whichever is lower
93
Q

Valuation Rule

A
  • The applicant has the right to promptly receive a copy of the written appraisal
  • Creditor must receive this waiver from the consumer at least 3 days prior to closing or opening
94
Q

ECOA Permissible Acts

A
  • Inquiries regarding race, ethnicity, gender, citizenship, marital status, or age for federal monitoring programs in compliance with fair lending laws or to determine if borrower is eligible for special programs
95
Q

ECOA Permissible Acts

A
  • Marital status to include spouse in the credit transaction, if the transaction is in a community property state, and if the borrower uses child support or alimony as repayment qualification
  • Inquiries to determine public assistance income continuance
  • Inquiries regarding elderly borrower’s age for program qualifying purpose
96
Q

HPA

A

Notice of Right to Cancel PMI

97
Q

Annual Privacy Notice

A

GLBA: Reg P

98
Q

FCRA

A

Notice of Right to Recieve Credit Score

99
Q

GLBA: Reg P

A

Initial Privacy Notice

100
Q

Explains what information the institute gathers, where the information is shared and how the institution safeguards that information.

A

Initial Privacy Notice

101
Q

Informs consumers of the thier right to terminate PMI insurance

A

Notice of Right to Cancel PMI

102
Q

Informs the consumer that their report has been viewed and that they have the right to obtain a free credit report once a year

A

Notice of Right to Recieve Credit Score

103
Q

Abitlity to Repay Standards

A

8 -
income and assets, employment, the amount of their new mortgage payment, other mortgage payments, monthly mortgage related obligations, current debt obligations, DTI and residual income, and credit history

104
Q

Qualified Mortgages Characteristics

A

regular periodic payments do not result in an increase of the principal balance

the loan does not include balloon payments,
income and financial resources of the consumer are verified and documented,

fixed rate loans underwriting process based on the maximum interest rate allowed during the first 5 years,

the loan complies with guidelines established by the CFPB relating to ratios of total monthly DTI,

The total points and fees payable in connection with the mortgage loan do not exceed 3% of the total loan amount,

the term of the mortgage loan does not exceed 30 years

NMLS-SAFE Vocabulary (7 decks)

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