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NMLS Exam > Truth-In-Lending Act (TILA) - Reg Z > Flashcards

Truth-In-Lending Act (TILA) - Reg Z Flashcards

1
Q

What does TILA apply to?

A

1-4 unit single family dwellings; extensions of credit payable in 5+ payments, 1st/2nd party transaction

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2
Q

According to TILA, listing the numbers for what three things act as trigger terms in advertisements?

A
  • APR
  • Down Payment
  • Term of Repayment
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3
Q

According to TILA, stating what is not a trigger term in advertisements?

A
  • “APR”
  • “VA”
  • “LTV”
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4
Q

According to TILA, advertisements must be what?

A
  • clear & conspicuous

- equal prominence

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5
Q

According to TILA, how long must ads be kept on file for?

A

2 years

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6
Q

Under TILA, what is the MLO Compensation Rule?

A

The Dodd-Frank Title XIV Amendment to TILA to prevent steering by MLOs

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7
Q

What does the MLO Compensation Rule prevent?

A

steering by MLOs

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8
Q

Under TILA, The MLO Compensation Rule what can an MLO never be compensated on?

A
  • rate
  • term
  • program
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9
Q

Under TILA, The MLO Compensation Rule what can an MLO be compensated on?

A
  • volume
  • flat fee
  • long-term performance
  • pull through rate
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10
Q

Under TILA, The MLO Compensation Rule says you may only pay for files that close. (True or False)

A

True!

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11
Q

Under TILA, what does The MLO Compensation Rule say is the MAX company profit share?

A

10%

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12
Q

What does MDIA stand for?

A

Mortgage Disclosure Improvement Act

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13
Q

What is MDIA under?

A

TILA (or TRID)… Just say Reg Z to be safe?

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14
Q

What regulation is TILA?

A

Reg Z

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15
Q

What is MDIA?

A

3/7/3 Rules and Timelines

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16
Q

What are the AIR Laws?

A

The Appraiser Independent Requirements

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17
Q

AIR Laws say that Appraisers must follow what requirements?

A

Uniform Residential Appraisal Requirements (1004/70)

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18
Q

What does URAR stand for?

A

Uniform Residential Appraisal Requirements (1004/70)

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19
Q

What does URAR say?

A
  • appraisals good for 120 days (if longer than 442 Recert)

- compares other sold properties in the recent past

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20
Q

Can an MLO influence the value of appraisal directly or indirectly?

A

NO! Never!

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21
Q

What two things can an MLO pay an appraiser based on?

A

timeliness and quality

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22
Q

What can an MLO never pay an appraiser based on?

A

value

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23
Q

An MLO can only have limited communication with an appraiser. (True or False)

A

TRUE

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24
Q

What does USPAP stand for?

A

Uniforms Standards of Professional Appraisal Practice

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25
Q

What is the USPAP?

A

Appraiser’s “Rulebook”

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26
Q

Subject Property = ______.

A

BASE

27
Q

What is the subject property/base used for?

A

To find comparables similar to base (not same price)

28
Q

Tolerances:

Line = ____

A

10%

29
Q

Tolerances:

Net = ____

A

15%

30
Q

Tolerances:

Gross = ____

A

25%

31
Q

Tolerances:

Land = ____

A

30%

32
Q

For appraisals, when is the market/sales approach used?

A

existing properties

33
Q

For appraisals, when is the cost approach used?

A

construction or unique properties

34
Q

For appraisals, when is the income approach used?

A

commercial or rental properties

35
Q

What was the 1994 Amendment to TILA?

A

HOEPA

36
Q

What does HOEPA stand for?

A

Home Ownership Equity Protection Act

37
Q

What is a HOPEA loan?

A

A High-Cost Loan (Section 32)

38
Q

High-Cost Loans:

1st lien:

A

APR +6.5% > APOR

39
Q

High-Cost Loans:

2nd lien:

A

APR +8.5% > APOR

40
Q

High-Cost Loans: Points/Fees Cap:

Loan is greater than $21,000 = _________

A

5% cap

41
Q

High-Cost Loans: Points/Fees Cap:

Loan is less than $21,000 = _________

A

lesser of 8% cap or $1,000

42
Q

Under TILA, under HOEPA, what is Section 35?

A

HPML

43
Q

What does HPML stand for?

A

Higher-Priced Mortgage Loan

44
Q

Higher-Priced Mortgage Loan:

1st lien:

A

APR +1.5% > APOR

45
Q

Higher-Priced Mortgage Loan:

2nd lien:

A

APR +3.5% > APOR

46
Q

Higher-Priced Mortgage Loan:

Jumbo:

A

APR +2.5% > APOR

47
Q

What are HOEPA/HPML prohibited loan terms?

A
  • no balloons within first 5 years
  • no negative amortization
  • no prepayment penalties within first 2 years
  • no demand clauses
48
Q

With HOEPA/HPMLs, what must be verified?

A

ATR… no “collateral-only” loans

49
Q

What does ATR stand for?

A

Ability to Repay

50
Q

A person is not allowed to go from HOEPA to HOEPA within ___ months.

A

12 months

51
Q

If a person has a HOEPA/HPML, they must have an escrow account for how long?

A

At least 5 years

52
Q

If HOEPA is a person’s first ever loan, what must they have?

A

HUD Counceling

53
Q

What must a person have a 2nd appraisal?

A

If value increases 10% or more within 6 months

54
Q

What is the HOEPA/HPML late fee max?

A

4%

55
Q

HOEPA/HPML have no fees for what?

A
  • payoff statement

- loan modification

56
Q

What does Dodd-Frank add onto?

A

TILA

57
Q

What Regulation is Dodd-Frank

A

Reg Z

58
Q

Under Dodd-Frank, what is Title X Consumer Protection Act?

A

created the CFPB and transferred rule-making authority and enforcement

59
Q

Under Dodd-Frank, what is Title XIV?

A

Mortgage Reform and Anti-Predatory Lending Act

60
Q

What did Title XIV amend?

A

TILA and RESPA

61
Q

What are the six Qualified Mortgage features under The Mortgage Reform and Anti-Predatory Lending Act?

A
  • total DTI cap: 43%
  • points/fees cap: 3% of loan amount
  • no interest-only loans
  • no terms greater than 30 years
  • no negative amortization
  • no “no-doc” loans
62
Q

What does the Ability-to-Repay rule do?

A
  • provides “safe harbor”

- presumed compliant if creditor uses QM

63
Q

What is MLO Safe Harbor?

A

providing:

  • lowest rate
  • lowest rate without risky features
  • lowest total $ for fees/points

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