TILA-RESPA Flashcards
TILA-RESPA Integrated Disclosure Rule “____________________________________-”
Know Before You Owe Rule
Purpose: aims to simplify and streamline mortgage disclosure forms required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). T/F?
True
The TRID Rule also imposes strict timing requirements for the delivery of these disclosure forms to consumers, as well as requirements for the format and content of the forms. It aims to improve transparency in the mortgage lending process and empower consumers to make more informed decisions about their mortgage loans.
TRUE
The TRID Rule primarily focuses on two key mortgage disclosure forms:
- Loan Estimate: The Loan Estimate is provided to consumers within ___ business days of applying for a mortgage loan. It provides an estimate of the loan terms, including:
- Interest rate,
- Monthly payments,
- Closing costs
- Other key details.
- Closing Disclosure: The Closing Disclosure is provided to consumers at least ___ business days before the loan closing. It includes the :
- Final terms of the loan,
- Interest rate,
- Monthly payments,
- Closing costs
- Loan terms.
3 business days
3 business days
Goals of the Loan Estimate is to provide consumers with:
- reliable estimates of loan and closing costs
Rule is intended to prevent extensive ______________ between estimated and actual costs by setting limits on how much the two figures may vary
discrepancies
Estimated costs shown on a Loan Estimate are deemed to be made in good faith if the actual cost does not exceed the amount originally disclosed on the Loan Estimate, or if all of the following are true:
▪ The aggregate amount of closing costs and recording fees does not exceed the amounts
disclosed on the Loan Estimate by more than ____ %
10%
If fees for 3rd party services are paid to the creditor or to an affiliate of the creditor, there is ____ tolerance for variance between the estimate and actual charge
zero tolerance
- Other fees that may not change include those paid to:
- The creditor
- Mortgage brokers
- Affiliates of the creditor or mortgage broker
- Unaffiliated 3rd parties if the creditor did not allow the consumer to shop for settlement services
- Transfer taxes
- No tolerance to error because these fees should be know
true
If the rate was not locked when the creditor provided the original Loan Estimate, when the rate is subsequently locked, the creditor must provide a revised version of the disclosure that lists the changed interest rate and any other rate-dependent charges and terms. This revised version of the Loan Estimate must be provided no later than _____ business days after the date on which the rate is locked
3 business days
if changed circumstances cause the charges listed on the Loan Estimate to increase, or cause the aggregate amount of estimated charges to increase by more than _____%, the creditor may issue a revised Loan Estimate.
10%
A Revised Loan Estimate is permitted in the following circumstances
- 1)Changed circumstances
-if changed circumstances cause the charges listed on the Loan Estimate to increase, or cause the aggregate amount of estimated charges to increase by more than 10%, the creditor may issue a revised Loan Estimate. A “changed circumstance” is defined by the Rule to include events, transaction, such as:- o Extraordinary or unexpected eventso Information that was relied on by the creditor is determined to be inaccurate or changes after the Loan Estimate is providedo New information
- 2) Change in eligibility
- a change in circumstances impacts the creditworthiness of the
applicant or the value of the property securing the loan
- a change in circumstances impacts the creditworthiness of the
- 3) Consumer-requested revisions
- the consumer requests a change that relates to the loan
terms or to settlement
- the consumer requests a change that relates to the loan
- Delays caused by the consumer
- the applicant waits more than 10 business days after the creditor provides a Loan Estimate before indicating his or her interest in proceeding
- Delays related to construction loans
- if the creditor reasonably expects settlement to be more than 60 days after providing the applicant with a Loan Estimate, a revised disclosure can be provided, so long as the original Loan Estimate clearly and conspicuously states that the creditor may issue revised disclosures at any time prior to 60 days before consummation
Loan Estimate Must provide within 3 business days of receiving information that prompted the change and no later than ____ business days prior to consummation
4 business
The first page of the Loan Estimate contains 4 basic sections. These sections address
1)general information about the transaction
2) summary of _________
3) estimated projected _______
4) estimated _______ at closing
Loan Terms
payments
Costs
fully-indexed rate” in mortgage loans refers to
interest rate that a borrower will pay on an adjustable-rate mortgage (ARM) after the initial fixed-rate period ends.
This rate is determined by :
adding the margin, which remains constant throughout the life of the loan, to the index rate, which fluctuates based on market conditions.
The Closing Disclosure must be received by the consumer no later than three business days` prior to consummation**.
Under this provision of the Rule, “business days” include all days except for_______ and legal public holidays`.
Sundays
