The laws protect
Consumers and Principal Dwelling.
RESPA
Real Estate Settlement Procedures Act
RESPA was enacted in
1974.
Who regulates RESPA?
CFPB
The main purpose of RESPA was to ensure
greater and more timely information and costs of obtaining a residential mortgage loan and to protect against unnecessarily high settlement changes caused by certain abusive practices.
The residential real property to which RESPA applies must have been designed for how many families?
1 to 4
For RESPA to apply, the lender's deposits and accounts must be insured or regulated by
an agency of the federal government
RESPA does not apply to
A private individual lending their own money
RESPA Exemptions:
A: Agricultural (25 acres or more) B: Business (regardless of personal guarantee) C: Commercial T: Temporary Financing V: Vacant Land
RESPA is a ________ law.
disclosure
A good faith estimate, or loan estimate must be signed/mailed at application or within how many days?
3 business days.
11. What six (6) pieces of information trigger an application?
1. Borrower's Name
2. Property Address
3. Social Security Number
4. Borrower's Income
5. Loan Amount
6. Estimated Property Value
12. The Initial Servicing Disclosure needs to be made at application or within 3 business days.
If the loan is denied within the first three business days, a _________ goes out instead of the initial disclosures.
denial letter
The HUD-1/HUD-1A Settlement Statement is an
itemization of charges.
There are two types of escrow disclosures:
Initial and Annual.
An Escrow (Impound) account
collects and hold funds for taxes.
In an initial escrow account statement, everything is a charge except
aggregate accounting.
In regard to an annual escrow account statement, any overages of over ____ returned to borrowers.
$50
The nature of the relationship and the range of charges are
Affiliated Business Arrangement disclosures.
As long as there is no _______ and no ______ the credit provider require services be used for a specific attorney, credit provider, and appraiser.
ownership interest and referral fees paid,
Additional consumer protections title provider under ________ provide that sellers cannot require a specific title company.
Section Nine
You can give or receive _______ for a referral.
nothing of value
It is not acceptable to add to any _______fee.
third-party
__________is not sufficient to earn a fee.
Taking a loan application
___________ is an action brought by state or agency. Civil is an action brought by your neighbor or your company.
Administrative
___________is an action brought by the state or federal government.
Criminal
Penalties are up to ________and up to ________ in jail per regulation.
$10,000 one year
best practice
It is not the best practice to include anything in your holiday card.
ECOA
Equal Credit OpPportunity Act
The Purpose of _________is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age.
Regulation B
You can _________about race, ethnicity or sex for monitoring purposes but not required to be answered by borrower or co-borrower.
inquire
A decision for Notice of Adverse Action Taken must be made within
30 days of application.
Federal agencies such as _______________may bring civil actions for suspected patterns.
CFPB, FTC, FDIC, NCUA, FRB, OCC, and HUD
___________with only people of a specific race, religion, or any other singular group can be seen as discouraging others not of that group.
Advertising
FHA
Fair Housing Act
Fair Housing Act protects against discrimination in
housing rental, sale, and appraising.
Under Fair Housing Act, you cannot discriminate on the basis of __________which is not covered by ECOA.
handicap or familial status,
___________are required by lenders and underwriters, not by the Act.
Disclosures
_______enforces the rules and can do so up to one year after the discrimination started.
HUD
Penalties can include
actual damages, punitive damages, and court costs.
TILA
Truth in Lending Act
TILA is now under the
CFPB.
The objective of the TILA is for consumers to be able to compare
credit terms from lender to lender.
An APR is the ______ plus the costs to get that interest rate.
interest rate
Exemptions to TILA:
Commercial-non owner occupied or 5 or more units.
Customers have the right to rescind on a
refinanced transaction.
A section___ loan is a higher cost and a section ____loan is a higher price.
32; 35
If a ________ is used in a commercial in any medium that promotes a credit transaction, all triggered terms must be disclosed.
triggering term
If the down payment is ______ no terms are triggered.
zero,
If the entity is open, it counts as a
business dav.
TILA disclosures have to be provided to the borrower within ________ after receipt of written application.
three (3) business days
________________are not required to be included in the APR.
Appraisal, credit, and title
____________is generally any fee that is paid to the broker and the lender.
Annual Percentage Rate
Rescission only applies to owner occupied residence of
1-4 units.
If a borrower rescinds,
all fees are refunded.
If the creditor fails to comply with TILA, the borrower's right to rescission extends to
three years.
In the TILA, Section 32 discusses ______ loans.
high cost
Exemptions to Section 32 loans are
Purchases, Reverse Mortgages, HELOC's, and Business Loans.
Every lender will look at every one of your loans and check to see if it exceeds above the going rate for the 1" mortgage, above the going rate for subordinate lien loans or in fees.
6.5% ;8.5%; 5% or $5.000
57. If a loan is subject to section 32 and you are able to find a lender to buy then your customer will have to sign a paper stating that they are aware that they can __________ because of the loan.
lose their home
loan secured by the consumer's_________ with an APR that exceeds the average prime off rate for a comparable transaction as of the date the interest rate is set.
principal dwelling
A person or organization that for compensation or other monetary gain performs loan origination activities is a
Loan Originator.
____________include taking an application, arranging credit transaction, offering credit terms, assisting in credit application, making extension of credit, and referring to a loan originator, and advertising to the public that you perform loan originatio
Loan origination activities
Salaries, commissions, any financial or similar incentive are ____________ of a Loan Originator.
compensation
Steering to a loan that provides greater compensation is prohibited unless
the loan is in the consumer's best interest.
compensation. Unless the Loan Originator originated less than or equal to 10 loans Compensation paid under plan may not exceed _____ of Loan Originator's total during preceding 12 months.
10%
__________ applies to all consumer-purpose, closed-end loans secured by a dwelling.
The ability to repay
________ can include an individual condominium unit, cooperative umit, mobile home, and trailer, if they are used as a residence.
Dwellings
The Ability to Repay requires creditors to make a reasonable and good faith determination _________ that the consumer will have a reasonable ability to repay the loan based on its terms.
at or before consummation terms.
Salary, wages, self-employment income, military or reserve duty income, and bonus pay can all be considered
income and assets.
You only need to consider the income or assets necessary to support a determination that the consumer has
the ability to repay the loan.
You must determine that the borrower's annual income divided equally across 12 months is sufficient for the borrower to make
monthly loan payments.
A creditor must verify the information that it relies on in determining a consumer's repayment ability using
reasonably reliable third-party records.
A creditor must retain evidence of compliance with Section 1026.43 for years _________ after consummation.
three
When the loan is a ________the court will treat an ATR case differently.
qualified mortgage,
Four types of Qualified Mortgages.
General, Temporary, Small Creditor, and Balloon-Payment
____ and _____qualified mortgages can be conducted by any size creditor.
General and Temporary
Under a general qualified mortgage, a creditor must determine that the consumer's total debt-to-income is no more than
43%.
The Qualified Mortgage creates two levels of liability protection for the creditor
Safe Harbor and Rebuttable Presumption.
A Qualified Mortgage loan cannot exceed the
points and cap fees.
Unless specified otherwise, include _______________even if the consumer pays them after consummation by rolling them into the loan amount.
amounts that are known at or before consummation,
A qualified mortgage is higher priced if it is a first lien, where at the time the interest rate on the loan was set, the APR was ____ points or more over the APOR.
1.5%
The closing date under the MDIA is on the _______ after initial disclosures and is the earliest a borrower can close.
7th business day
HMDA
Home Mortgage Disclosure Act
______ was implemented by Federal Reserve Board in 1975.
Regulation C
The objective of the HMDA is to
detect discriminatory lending and enforce antidiscrimination statuses.
Lenders must report statistics on loans made and
and the unique characteristics of those loans.
When detemining whether you meet the reporting criteria for depository institutions, use information and data from the preceding ______ date.
December 31
_______ defines questions you can ask and what questions you cannot ask.
HMDA
You should have a notice in ______ letting people know that you do HMDA reporting.
your lobby
The NCUA, OTS, HUD, OCC, FRS, FDIC, and the CFPB are all various
regulatory agencies.
FCRA
Fair Credit Reporting Act
The objective of the Fair Credit Reporting Act is to
assure fairness, relevancy, confidentiality. and accuracy.
Credit reporting agencies must delete
obsolete information.
The FCRA states that credit reporting agencies must removes credit after and bankruptcies after
7 years; 10 years.
Credit reporting agencies must block intormation resulting from
identity theft.
You must have a _________ to order someone's credit report.
borrower's authorization
The Commission chose the interval ____ as opposed to 30 days, to provide telemarketers the maximum time allowable under the Appropriations Act to simplify the process of scrubbing lists on a monthly basis.
31
Telephone numbers placed on the ________will remain on the list permanently.
National Do Not Call Registry
There are 3 basic types of compliance for email marketers:
unsubscribe, content, and sending behavior compliance.
Consumer operable unsubscribe requests are honored within
within 10 business days.
Email marketers to provide accurate "from" lines, relevant subject lines, a legitimate address of the publisher and/or advertiser, and
a label if the content is adult.
Under sending behavior compliance, a message cannot contain a
false header.
FACTA
Fair and Accurate Credit Transaction Act
______ was added to make sure that people are treated fairly regarding their credit reports and information about how they pay for their credit.
FACTA
_________ is the only FTC authorized site.
AnnualCreditRenort.com
AnnualCreditReport.com _______ affect your borrower's credit score.
does not
__________ is the primary enforcer for the mortgage brokers and now the CFPB
Federal Trade Commission
_________ was designed to protect consumer sensitive personal data, such as social security numbers, or financial account numbers.
The Red Flag Rule
___________created the Consumer Financial Protection Bureau. This bureau gave the CFPB authority to ensure consumers were given accurate information in order to shop for their mortgage.
The Dodd-Frank Act
tracks consumer complaints, consolidates and strengthens protections aimed at consumers.
The Consumer Financial Protection Bureau
The Dodd-Frank Act prohibits unfair _________ such as financial incentives to steer a borrower into a more costly loan, prepayment penalties, or inflating costs.
lending practices
MARS.
Mortgage Assistance Relief Services
Negotiating, obtaining, or arranging a modification of any term of a dwelling loan, including reduction in the amount of interest, principal balance, monthly payment, or fees; is just one of the services provided by
MARS.
_____________ requires U.S. financial institutions to assist U.S. govermment agencies to detect and prevent money laundering.
The Currency and Foreign Transactions Reporting Act
The Currency and Foreign Transactions Reporting Act can also be referred to as the
Bank Security Act.
GLBA
Gramm-Leach-Bliley Act
_______is also known as the financial modernization Act of 1999.
GLBA
________keeps borrowers information private.
Privacy Rule
Pretexting Rule
prohibits sharing of information with pretenders.
Opt-Out Rulc
gives the borrowers the opportunity to opt-out.
_________ can be hand delivered, mailed, emailed, faxed or to a number the borrower gives the MLO.
Privacy notices
Under GLBA, obtaining information under false pretenses is a _______ and can result in fines and up to 10 years in prison.
criminal penalty
MAP
Mortgage Acts and Practices
MAP was issued by the________ to implement requirements of the CARD Act and Dodd-Frank Act.
Consumer Financial Protection Bureau
The interest charged; APR; Amount of fees or costs; fees or costs for any additional product that may be sold; terms, amounts, payments, relating to taxes or insurance; any prepayment penalty; any teaser rates; are all
prohibited material representations.