Week 3

Question 1

RESPA Sections

Answer 1

Section 6 - Servicing
Section 8 - Referrals
Section 9 - Title Agent
Section 10 - Escrow Accounts

Question 2

TILA Sections

Answer 2

Section 19 - MDIA
Section 23 - The Right of Rescission
Section 32 - HOEPA
Section 35 - HPML
Section 36 - The Loan Originator Rule and Servicing Rules
Section 42 - Valuation Independence
Section 43 - ATR and QM

Question 3

RESPA Disclosures

Answer 3

• MSDS
• NTS
• ABA
• Initial Escrow Statement
• Annual Escrow Statement
• Homeownership Counseling Organizations List
• CFPB’s HLTK
• GFE
• HUD-1 Settlement Statement

Question 4

TILA Disclosures

Answer 4

• HOEPA disclosure
• Notice of Right to Cancel
• Early ARM disclosure
• CHARM
• Initial TILA Servicing ARM Adjustment disc.
• Ongoing TILA Servicing ARM Adjustment disc.
• Initial TIL
• Final TIL
• What You Should Know About Your HELOC

Question 5

Factors of a Qualified Mortgage

Answer 5

1. Regular periodic payments (w/o negative amortization)
2. No balloon payments (2 x the avg. mo. payment)
3. The Bor’s income/assets are verified w/ documentation
4. Fixed mort. u/w based on fully amortized loan schedule
5. ARM u/w based on max int. rate possible in 1st 5 yrs. of loan
6. Max DTI is 43%
7. Total points/fees cannot exceed 3% of the loan amount
8. Max loan term is less than/equal to 30 years

Question 6

ATR - Ability to Repay

Answer 6

I - 1. Income and Assets
E - 2. Employment
T - 3. THE amount ($)/THEIR new monthly mortgage payment
O - 4. Other mortgage payments
M - 5. Mortgage related obligations (monthly)
C - 6. Current debt obligations
D - 7. DTI + residual income
C - 8. Credit History

Question 7

Sub-Prime Bor Characteristics

Answer 7

2 - 2 or more 30 day delinquencies in the last 12 months
1 - 1 or more 60 day delinquencies in the last 24 months
A - A foreclosure/ judgment/ repossession/ charge-off in the last 24 months
A - A bankruptcy in the last 5 years
C - Credit score 660 or below
D - DTI 50% or more

Question 8

URLA - Uniform Residential Loan Application - 1003 Sections defined

Answer 8

T - Title I - Terms of Loan/ Type of Mortgage
P - Title II - Property Info/ Purpose of Loan
B - Title III - Bor Info
E - Title IV - Employment Info
M - Title V - Combined Housing Expenses Info + Monthly Income
A - Title VI - Assets and Liabilities
D - Title VII - Details of Transaction
D - Title VIII - Declarations
A - Title IX - Acknowledgement and Agreement
I - Title X - Info for Gov’t Monitoring Purposes