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Additional CRCM > TILA - Closed End Credit > Flashcards

TILA - Closed End Credit Flashcards

1
Q

Disclosure for closed end loans must be given

A

Before consummation, which is the point a consumer becomes contractually obligated to the credit transaction

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2
Q

For loans secured by real property an application consists of

A 
Name 
Income
SSN
Property address
Estimate of property value
Mortgage loan amount soght
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3
Q

For mortgage loan (not revere mortgage) secured by consumer dwelling (RESPA) a loan estimate must be delivered or mailed to consumer no later than

A

7 business before the consummation of the transaction

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4
Q

Reverse mortgages require what kind of early disclosure

A

Good faith estimate no later than the third business day after creditor receives the written application

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5
Q

Early disclosures do not apply toc

A

Home equity lines nor to timeshare planes

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6
Q

Creditor must provide corrected disclosures with all the changes terms if the APR changes

A

1/8 of a percent in a regular transaction

1/4 of a percent in a irregular transaction

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7
Q

Corrected transactions are assumed to be received

A

3 days after mailing unless delivered in person

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8
Q

All disclosures must contain the following sentence

A

You are not required to complete this agreement merely because you received these disclosures

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9
Q

You Cannot impose a fee with any application for a transaction subject to respa and secured by consumer dwelling before

A

The consumer received the good faith estimate or the loan estimate. Fees for credit reports are exempt from this

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10
Q

A business day is defined as

A

Any day except Sunday and a legal holiday

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11
Q

Waiver of waiting period can occur for a bon a fire emergency if consumer provides

A

A written, dated, waiver that describes the boba fide personal emergency

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12
Q

For variable rate mortgage secured by a dwelling and the term is more than one year certain disclosures must

A

be given before application

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13
Q

If variable rate mortgage and the loan was received in the phone or broker

A

You have 3 business days to provide disclosure

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14
Q

The creditor may delay the disclosures until the due date of the first payment for mail or telephone apps if

A

Certain information is made available in electronic form

Cash price
Apr and if it can increase

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15
Q

If information on which a disclosure is based is unknown

A

The creditor must estimate the information and state the disclosure is an estimate

For demand obligations, disclosures must be based on an assumed maturity of a year

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16
Q

Disclosures must be

A

In writing

Conspicuously segregated from all other disclosures

Disclosures may be provided in electronic form subject to consumer consent

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17
Q

Variable rate disclosures must be given in a closed end transaction where the APR

A

May increase after consummation

Circumstances of when it may increase

Any limitation of the increase

The effect of an increase

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18
Q

Finance charges include

A 
Interest
Points
Closing agent charges
Premiums for insurance
Broker fees
Chargers for third party work
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19
Q

For closed end transactions secured by real property other than time share, lender must disclose that

A

There is no guarantee the consumer can refinance the transaction to lower the interest rate or periodic payments

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20
Q

Other disclosure requirements

A

Identify the creditor making the decision

Late payment charges that may be imposed states as the dollar amount or percentage of the payment

Other information may be found in the contract

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21
Q

Disclosures must be given for what post consummation events

A

Refinancing with change in terms

Assumptions

Rate adjustments with corresponding change in payment amount

Discloures must be provided at least 60 days but not more than 120 days first payment is due

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22
Q

Creditor must provide consumer with disclosures in connection with the initial rate adjustment at least

A

210 but not more than 250 days before payment at the adjusted level is due

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23
Q

Right of revisions apply to transactions where a lien is taken on the consumer

A

Principal dwelling and the loan is not for purchase, acquisition, or initial construction ( residential mortgage transaction)

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24
Q

Right of recession does not apply to a refinancing by the

A

Same creditor

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25
Q

Anyone who has ownership interest in the dwelling has the right to rescind within

A

3 business days

26
Q

3 business days for right of recession starts after at least three of the following events

A

Consummation of the transaction

Delivery of the material TIL

Delivery of the right to rescind

27
Q

Notice of the right to rescind must

A

Be on seperate document

Disclose the security interest being acquired

Disclose the consumer has the right to rescind

Explain the effects of rescission

Disclose the date the decision period ends

28
Q

How many recession copies must be given to each consumer with ownership in the property

A

2

If notice provided electronics, the. Only 1 is required

29
Q

Until the recession ends the creditor may not

A

Disburse funds

Perform any services

Deliver any materials

30
Q

Effects of valid recession

A

Security becomes void
Within 20 days creditor must return money

Once the money is returned, then the consumer has to return property and money to the lender

31
Q

Failure to properly provide the right of recession affords the consumer an additional

A

3 years to rescind the transaction

32
Q

Advertising should

A

Must state specific terms offered by the bank

If if states finance charge, it must state APR

33
Q

In a closed end consumer loan secured by real property, other than a reverse mortgage, the creditor must provide a

A

Loan estimate unless the mortgage broker provides one

34
Q

For a mortgage loan, the loan estimate must be delivered no later than the third business day after the creditor receives the

A

Consumer application

35
Q

The final disclosure on mortgage loans must reflect the actual terms of the transaction an be provided no later than

A

3 business days before consummation

36
Q

Any disclosure not provided to the consumer in person will be

A

Considered to be received by the consumer three business days after they are delivered or placed in the mail

37
Q

If disclosures become inaccurate before consummation

A

The creditor must permit the consumer to inspect the disclosure at least one business day immediately preceding consummation

38
Q

If any of the following become inaccurate, new disclosures and a new waiting period are required

A

Apr

Loan product changes

Prepayment penalty added

39
Q

If amounts paid by the consumer exceed the amounts disclosed in the estimated disclosures in an amount greater than the allowed tolerance, the creditor must refund the excess

A

In 60 days after consummation

40
Q

Creditors must provide a ________ Special information booklet to a consumer who applies for a consumer loan secured by real property

A

Respa. Note. The book Must be mailed or delivered in 3 business days unless loan is declined

41
Q

Must be give to the contact the time of application or before a non refundable fee is paid

A

CHARM book and s loan program disclosure for each ARM loan

42
Q

The loan program book must contain

A

Fact interest , payment, or terms may change

How interest was calculated

Consumer should ask about current margin and interest rate

Historical example

43
Q

Requirements for High Cost Mortgage

A

Secured by principal dwelling

Apr will exceed sports by 6.5% or 8.5% if the loan is less than 50k.

Or 8.5% for a junior lien

Total points and fees more than 5% of loan transactions of 20k or more

8% or more if loan transaction less than $20k

44
Q

Exceptions to high cost mortgages are

A

Reverse mortgages

Intial construction of a dwelling

Bridge loan less than 12 months

45
Q

For a high cost mortgage, disclosures must be provided at least

A

3 business days

46
Q

High cost mortgages must not contain the following provisions

A

Ballon payments

Negative amortization

An increase in rate after defaults prepayment penalty

A due on demand clause (unless fraud or security of collateral is impacted)

47
Q

Creditor may not open a high cost plan for a consumer without taking in consideration of the following for ability to repay

A

Income

Employment

Assets

Collateral

Current obligations

48
Q

A certificate that the consumer has obtained credit counseling from a HUD certified counselor for

A

High cost mortgage

49
Q

Early high cost mortgage disclosures

A

Must be provided three days in advance

Must have APR

For closed end loans, the amount of the periodic payment and the amount of any ballon payment

For variable rate loans, statement that increase may increase, the amount of the single maximum payment

50
Q

Creditors may not refinance any high cost mortgage within one year of having made the loan into another

A

Higher cost loan

51
Q

A creditor may not extend a high cost mortgage unless the creditor obtains a __________ from the consumer indicating the consumer has obtained credit counseling fromHUD certified counselor

A

Certificate

52
Q

Higher prices mortgage loans include

A

Closed end consumer transactions secur d by the consumer principal dwelling with an APR that exceeds the average prime offer rate

53
Q

A loan originator may not direct or steer a consumer to s transaction based on the fact

A

That the loan originator will receive greater compensation from the lender

54
Q

What is a covered transaction

A

A transaction with an APR that exceeds the average prime offer rate for a comparable transaction

55
Q

Qualified mortgage is a consumer loan secured by a dwelling that

A

Provides for regular periodic payments that are substantially equal

Does not have a term that exceeds 30 years

Had points and fees that do not exceed regulation limitations

Loan underwritten taking into account a payment using the maximum interest rate that may apply the first five years

Income was verified

dti does not exceed 43 %

56
Q

Safe harbor loan is

A

Is not a higher priced loan secured by a dwelling, complies with the repayment ability requirements

57
Q

A presumption of compliance loan is a higher price loan that

A

Presumed to comply with the repayment requirments. The creditor did not make a reasonable good faith determination of ability to repay

58
Q

A loan cannot be qualified mortgage unless

A

The points and fees don’t exceed a certain % of loan amount

Can be purchased by the govt

Can be insured by HUD

Can be gursnttee by the va

Have ballon payment does not exceed 30 years

Subtanually equal payments over 30 years

Interest rate does not increase

59
Q

Consumer may not have prepayment penalties unless

A

The penalty is permitted by law

The APR cannot increase after consummation

The loan is not a higher priced mortgage

The loan is a qualified mortgage

60
Q

A prepayment Penalty may not apply after the three year period

A

Following consummation

Additional CRCM (19 decks)

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