Chapter 5 Vocab

Question 1

Adverse Action

Answer 1

refers to a type of notice given by a lender when a borrower’s credit application has been denied

Question 2

Air Loan

Answer 2

The property and borrower do not exist

Question 3

Civil rights act of 1968

Answer 3

Requires lenders to be fair and not discriminate

Question 4

Community Reinvestment Act

Answer 4

CRA

• A federal law the prohibits Redlining
• Meets the needs of the community

Question 5

Department of housing and urban development

Answer 5

Responsible for enforcing the Federal Fair Housing Act

Question 6

Equal Credit opportunity act

Answer 6

1974 act of congress to further eliminate discrimination

Question 7

Equal Housing Lender poster

Answer 7

Required to be posted in all mortgage brokers and other direct lenders offices

Question 8

Executive order 11063

Answer 8

Made it clear the all government related loans would not be denied based on race, color, creed, or national origin

Question 9

Fair Credit Reporting Act

Answer 9

spells out credit reports rights in detail

Question 10

Fair Lending

Answer 10

Equal lending opportunity

Question 11

Federal Fair Housing Act

Answer 11

FFHA
-Housing only, Does not apply to nonresidential property
-Discrimination applies to 
National origin
color
religion
race
sex
familial status
handicaps

Question 12

Fraud for profit

Answer 12

Often includes multiple loans, an elaborate scheme, and collusion of industry professionals who are often paid for participation

Question 13

High Cost mortgage

Answer 13

A consumer credit transaction that is secured by the consumers principal dwelling

Question 14

Home Mortgage Disclosure Acr

Answer 14

HMDA

-Exposes incidents of redlining

Question 15

Home Valuation Code of Conduct

Answer 15

HVCC

-stopped appraisers from being coerced to up the value of a property by three of being cut off or killing the deal.

Question 16

Truth in lending ACt

Answer 16

TILA

Question 17

Property Flipping

Answer 17

a recently purchase home is resold for considerable profit with an artificially inflate value, often as a result of collusion with the appraiser

Question 18

Redlining

Answer 18

illegal process of not making loans in certain neighborhoods due to religious, racial, ethnic, or other social reasons.

Question 19

Silent Second

Answer 19

Scheme where the the down payment is actually borrowed or carried as a second mortgage by the seller but is not recorded in the purchase agreement. gives the first mortgage lender the impression the buyer has skin in the game