TILA

Question 1

What are the four disclosures that need to be sent to the applicant within three days of receiving an application?

Answer 1

• Loan Estimate
• Special Info booklet (if a purchase)
• List of 10 HUD-approved housing counseling agencies nearest the applicant’s current address.
• Mortgage Servicing Disclosure

Question 2

What are the pre-settlement disclosures and when do they need to be delivered?

Answer 2

• Closing Disclosure (or HUD-1 for some), must be delivered at least 3 days before closing.
• Affiliated Business Arrangement, when the lender owns or has a partial controlling interest in a title company or a real estate company.

Question 3

What are the settlement disclosures?

Answer 3

• Final Closing Disclosure or HUD-1, at closing

- Initial Escrow Statement, at or within 45 days of closing

Question 4

What are the post-settlement disclosures?

Answer 4

• Servicing Transfer Statement, 15 days before the change goes into effect.
• Annual Escrow Analysis Statement

Question 5

What are the fees on the Closing Disclosure that cannot increase over the amounts disclosed on the Loan Estimate?

Answer 5

Real estate transfer taxes, and creditor’s or mortgage broker’s charges for its own services (loan origination fees and interest rate), and fees for services provided by an affiliate of the creditor or mortgage broker, and charges for services for which the creditor or mortgage broker does not permit the consumer to shop for (credit report, appraisal)

Question 6

What are the fees that can increase by no more than 10% over those disclosed on the Loan Estimate?

Answer 6

Fees that the lender chooses or identifies (credit report, appraisal, government recording fees, and title insurance if selected or “recommended” by the lender).

Question 7

What are the closing fees for which there is no restriction on increases?

Answer 7

Fees for services that the owner chooses for themselves (hazard insurance or title insurance if the homeowner doesn’t choose one of the lender-identified selections) and fees that are paid per diem (pre-paid mortgage interest) have no limit on the acceptable amount of variance between the estimates and the closing statement.

Question 8

TILA is mainly concerned with what three general areas?

Answer 8

• Disclosure of financing charges.
• Distribution of the Consumer Handbook on Adjustable-Rate Mortgages (CHARM) booklet to consumers who choose an adjustable-rate mortgage.
• Right of Rescission.

Question 9

When is the estimated APR considered accurate according to Regulation Z, in the context of a fixed-rate and an ARM?

Answer 9

1/8% for a fixed-rate

1/4% for an ARM

Question 10

Regulation Z states that borrowers have a right of rescission on which loans? How long is the rescission period?

Answer 10

Borrowers who use their residence as security for a refinance, home improvement, or a secondary mortgage.

Three days - midnight of the third day after the closing, not including the day of the closing.

Question 11

Regulation Z applies to:

Answer 11

Residential mortgages (1-4 units)