TILA Reg Z part 2

Question 1

For Reg Z, what must an ARM be secured by to be considered an ARM? and how long should term be?

Answer 1

principal dwelling and term more than 1 year

Question 2

when must the CHARM booklet and program disclosure be provided for ARM loans?

Answer 2

at time of application

Question 3

If a creditor makes fewer than X loans under TRID in a year they are exempt?

Answer 3

5 or fewer mortgage loans

Question 4

what constitutes application under TRID?

Answer 4

• loan amount
• property address
• name
• SSN
• income
• property value

Question 5

what is general business days?

Answer 5

day a bank is open and carries substantial amount of there business

Question 6

what is the mailing rule?

Answer 6

assume post office takes 3 specific days to deliver

Question 7

How many days does bank have between LE before they can close?

Answer 7

delivered or mailed 7 specific days before consummation

This only applies to first/original LE.

Question 8

Can a bank waive the 7 day rule before closing?

Answer 8

Yes if customer has bona fide personal financial/health emergency

Question 9

what is a changed circumstance?

Answer 9

reset baseline

• applicant requests change (variable to fixed)
• floating interest and now locked (revised LE required)
• if intent to proceed not received within 10 a revised LE may be sent
• information that changes assumptions (appraisal value, credit score)

Question 10

True or False

For HPML, banks must escrow for taxes and insurance for the entire life of loan.

Answer 10

False

For first lien loans, borrower may be given the opportunity to opt out of the escrow after 5 years.

Question 11

what are the requirement to be a HPML?

Answer 11

• -closed
• -secured by principal dwelling
• -lien position is irrelevant
• -includes home equity, purchase, refinance, etc.

Question 12

what loans are covered under HOEPA?

Answer 12

• -consumer purpose
• -secured by principal dwelling
• -includes purchase, home equity, refinance and HELOC

Question 13

what makes a loan a HOEPA loan?

Answer 13

one of the following

• -APR is 6.5% over APOR for first lien and 8.5%
• -loans total points and fees exceed threshold
• -prepayment penalty can be charged more than 36 months out of more than 2%

Question 14

what are some requirements for HOEPA loans?

Answer 14

• -additional disclosures
• -homeowner counseling required
• -limitations on prepayment penalties and fees

Question 15

what is a higher risk mortgage?

Answer 15

an HPML that is NOT a qualified mortgage