TILA

Question 1

Reg ?

Answer 1

Z

Question 2

Overview

Answer 2

-Protects customers from predatory lending
-Enforced by the CFPB
-Applies to loans on 1-4 unit residential properties
- Does not apply to business, commercial, or agricultural loans
- Penalty - $5K/1 year prison

Question 3

Advertising

Answer 3

• Defines Advertising
• Trigger terms (ex. 10% down payment, $1,000 down)
  -APR- must be disclosed if a trigger term is used

Question 4

Right of Rescission

Answer 4

• Three full business days
• Owner-occupied refinance only
• Two copies provided to all owners
• 20 days to return money or property if borrowers rescinds
  -Fail to provide copies/errors on disclosures - 3 years to rescind

Question 5

HOEPA summary

Answer 5

-Does not apply to reverse mortgages, construction loans, loans from a Housing Finance Agency, or USDA loans.
- 3 tests, APR, points & fees, prepayment penalty (changes annually)
- Fail any test= HOEPA loan
-Average Prime Offer Rate (APOR)
- HOEPA restricts features on high-cost home loans like
-negative amortization
-balloon payments
-4% limit on late fees
-can’t recommend default
-Requires:
- Pre-loan Homeownership counseling
-Full appraisal
- Escrows for five years

Question 6

HPML (Higher-Priced, section 35)

Answer 6

-APR test (1.5% and 3.5%)
-Must escrow for at least 60 months
-Limits on PPP
-Full appraisal (provided to the borrower within 3 business days before consummation.)
Can’t rely on collateral or consumer-provided info-must verify

Question 7

Loan Originator Compensation (LO Comp)

Answer 7

-Anti-Steering
-Three loan options
-Compensation can’t be based on the terms of the transaction.

Question 8

Ability to Repay (ATP) (how many criteria)

Answer 8

-Eight underwriting criteria

Question 9

Qualified Mortgage (QM)

Answer 9

-Mortgage that complies with ATP
-Types
-Baloon QM
-General QM
-Temporary QM
-Small Lender
-Price-based QM
-Seasoned QM
-Does not apply to
-Reverses
-HELOCs
-Timeshares
-Temporary (Bridge/construction)
-Vacant land
-Commercial
-Prohibits negative amortization
-Maximum of a 30 year term
-3% points and fees threshold - changes annually
- Safe Harbor - conclusively presumed to comply with the ATP
-Rebuttable presumption - occurs when a QM loan is a higher-priced mortgage

Question 10

MDIA (3/7/3 rule)

Answer 10

-Overshadowed by TRID
-Disclosures 3 business days after application
-Can’t close for 7 business days
-Re-disclosure of an inaccurate APR at least 3 business days prior to closing.