Housing and Economic Recovery Act (Hera)
- Created in 2008 to address subprime mortgage crisis. - Allows FHA to guarantee up to $300 billion in new 30 year fixed rate mortgages for subprime borrowers.- Amended FHA max loan amount to 115% median house price
Federal Housing Administration (FHA)
- Can NEVER have defaulted student loan or federal debt- Facilitates FHA mortgage lending by insuring mortgage loans on houses meeting agency standards-Federal government agency oversees US housing market; part of US Dept. of HUD-FHA mortgages guaranteed by federal government and offered by banks/lenders
Government National Mortgage Association (GNMA; GinnieMae)
- Does not purchase/sell loans; guarantees them- Government owned entity- The Fannie & Freddie of government lending- Created to securitize/guarantee government issued loan (FHA, VA, USDA)- Places government loans into MBS - Secondary Market
Fair Credit Reporting Act (FCRA)
- Regulation V- Free credit freeze (Economic growth, Regulatory relief & Consumer Protection Act) added in 2018- Regulates how CRAs use consumer information- Enacted to ensure accuracy, fairness and privacy- More than 4 installments
Federal National Mortgage Association (FNMA; Fannie Mae)
- Created in 1968- GSE created by congress to increase access to mortgages- "Conforming" Mortgages sold in secondary market
Financial Crimes Enforcement Network (FinCEN)
-Entity that a SAR(Suspicious Activity Report) would be reported to
Higher-Priced Mortgage Loan (HPML; Section 35 loans)
- Requires appraisal- APR (Annual Percentage Rate) higher than a benchmark rate called APOR (Average Prime Offer Rate)- 1.5% for first mortgage- 2.5% for first lien jumbo loans (loan amount over $548,250)- 3.5% for subordinate mortgage lien
Government Sponsored Enterprises/Entity (GSEs)
- Financial services corporation created by US Congress (Fannie Mae & Freddie Mac)- Helps keep market going as secondary market buying loans
Home Affordable Refinance Program (HARP)
- Refinance program allows eligible borrowers with little to no equity take advantage of low interest rate or other refinance benefits
Secure and Fair Enforcement Act (SAFE)
- Created in 2008- Violation is $25,000 each or or omission- Requires Pre Licensing (PE) and Continuing Education (CE)- Designed to protect consumer and reduce fraud- NMLS established and maintains
Real Estate Settlement Procedures Act (RESPA)
- Regulation X - Federal statute requires lenders to provide home buyer with information about known/estimated settlement costs- Help consumers shop better settlement services- Eliminate cost increases from kickbacks- Limit reserve accounts- No referral fees allowed- RESPA keeps records for 5 years- Covers one to four unit owner occupied- Covers kickbacks, referral fees, escrow requirements, transfer of servicing, also TRID
Truth in Lending Act (TILA)
- Regulation Z- Credit, APR, & Advertising of loans- Purpose is to protect from predatory lending & limit interest rate/disclosure abuse- Violations are $5,000 and 1 year jail per violation- Important document received from lender or bank within 3 days of loan application- Disclosures include finance charges, APR, amount financed, total of payments, total sales price- TRID requires for Reverse Mortgages & HELOCs (Home Equity Line Of Credit)
TILA-RESPA Integrated Disclosure Rule (TRID)
- New legislation as of October 2015 requires the Loan Estimate and Closing Disclosure- Replaces the GFE, TIL, & HUD-1 Disclosures
Home Ownership and Equity Protection Act (HOEPA)
- Created in 1994; Regulation z- Addresses abusive practices in refinances & closed end home equity loans with high interest rate or high fees- 1994 amendment to TILA- Regulates high cost home loans; Section 32- Counseling required
Federal Home Loan Mortgage Corporation (FHLMC; Freddie Mac)
Created in 1970- GSE (Government Sponsored Enterprise)- Corporation authorized by congress to provide secondary market for residential mortgages- "Conforming" mortgages offered
Equal Credit Opportunity Act (ECOA)
- Regulation B- Credit Application- Law in US makes it illegal for any lender to discriminate based on race, religion, national origin, sex, etc.- Gives all consumers equal chance to obtain/maintain credit