☑️ Chapter 7: Federal & Financial Disclosure Laws Flashcards by Delia Archer

Federal Disclosure Laws:
The ______ Act of 1974 (RESPA) (12 U.S.C. $2601 et seq.) became effective June 20, 1975. The U.S. Department of Housing and Urban Development (HUD) promulgated Regulation ______, which is now enforced and interpreted by the _______.
The primary purpose of RESPA is to _________ and to eliminate unnecessary increases in the costs of certain settlement services due to ________.

A. Real Estate Settlement Procedures
B. X
C. Consumer Financial Protection Bureau (CFPB)
D. Help consumers become better shoppers for settlement services
E. Unlawful kickbacks and referral fees

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Federal Disclosure Laws:
Real Estate Settlement Procedures Act (RESPA) Key Amendments:
On January 17, _______, the CFPB issued a final rule to amend Regulation ___. The final rule implemented certain provisions of Title _____ of the Dodd-Frank Act and included substantive and technical changes to the existing regulations. Substantive changes included modifying the servicing transfer notice requirements and implementing new procedures and notice requirements related to borrowers’ error resolution requests and information requests.

A. 2013
B. X
C. Title XIV (14)

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Federal Disclosure Laws:
TILA and RESPA Introduction:
Real Estate Settlement Procedures Act:
Key Amendments:
The amendments, effective as of January 10, _____, also included new provisions related to:
• ______ payments,
• ______ insurance,
• General servicing policies, procedures, and requirements,
• Early intervention,
• Continuity of contact, and
• ______ mitigation.

A. 2014
B. Escrow
C. Loss
D. Force-Placed

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Federal Disclosure Laws:
TILA and RESPA Introduction:
Real Estate Settlement Procedures Act:
Key Amendments:
Again in 2013 and 2014, the CFPB issued final rules to further amend Regulation ___. These rules included substantive and technical changes to the existing regulations, including revisions to the provisions in relation to:
• State law of Regulation X’s servicing provisions,
• The loss mitigation procedure requirements, and
• The requirements related to notices of error and information requests.

A. X

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Federal Disclosure Laws:
TILA and RESPA Introduction:
Real Estate Settlement Procedures Act:
Key Amendments:
On December 31, _____, the CFPB published final rules implementing Sections 1098(2) and 1100A(5) of the Dodd-Frank Act, which directs the CFPB to publish a ____.

A. 2013
B. Single, integrated disclosure for mortgage transactions

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Federal Disclosure Laws:
TILA and RESPA Introduction:
Real Estate Settlement Procedures Act:
Key Amendments:
These final rules include mortgage disclosure requirements under the Truth in Lending Act and Sections 4 and 5 of RESPA. These amendments are referred to as the “______ Rule” or “TRID” and are applicable to covered closed-end mortgage loans for which a creditor or mortgage broker receives an application on or after August 1, 2015.
As a result, Regulation ____ now houses the ______ requirements for most _____ consumer mortgage loans.

A. TILA-RESPA Integrated Disclosure Rule
B. Integrated forms, timing, and related disclosure
C. Closed-End

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Federal Disclosure Laws:
TILA and RESPA Introduction:
Real Estate Settlement Procedures Act:
Sections Impacting Mortgage Origination:
There are four sections to RESPA that impact and guide the mortgage industry in protecting borrowers from abuses:
• Section ____ - Identifies the AMOUNT that can be charged to maintain escrow accounts. • Section ____ - Provides borrowers with important protections relating to the SERVICING of their loans. Mandates that homeowners be given ____ days PRIOR and POST notice before a change in loan servicers. Also provides a ____-day window for payments made to the old servicer to be FORWARDED to the new servicer.
• Section ____ - States a seller cannot REQUIRE the use of a particular title company.
• Section ____ - PROHIBITS kickbacks, fee-splitting, and unearned fees.

A. 10
B. 6
C. 15
D. 60
E. 9
F. 8

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Federal Disclosure Laws:
TILA and RESPA Introduction:
Real Estate Settlement Procedures Act:
Covered Transactions:
RESPA, as implemented by Regulation ____ applies to any federally-related mortgage loan (including refinancing) secured by a first or subordinate lien on residential real property located within a state upon which is constructed or will be constructed a one-to-four family structure (including condos, co-ops, and manufactured homes). The rules and regulations of RESPA generally apply to the following:
• CONVENTIONAL loans
• FHA, VA, and other GSE loans
• PURCHASE loans
• REVERSE mortgages
• ASSUMPTIONS
• REFINANCES
• Property IMPROVEMENT loans
• EQUITY lines of credit
The following types of transactions are not covered:
• All-CASH sale
• Sale where the individual home seller takes BACK the mortgage
• BUSINESS purpose loan
• Assumption NOT requiring lender approval
• Loan CONVERSION
• TEMPORARY construction loan as long as PERMANENT financing of 1-4 family residential property is NOT anticipated
• BRIDGE loan
• VACANT or unimproved property, unless a dwelling will be constructed or moved onto the property within two years
• BONA FIDE TRANSFER of a loan obligation in the secondary market

A. X

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA): The ________ Act was enacted on May 29, 1968, as Title I of the Consumer Credit Protection Act.

A. The Truth in Lending Act (TILA)

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
The Truth in Lending Act (TILA) , implemented by Regulation _____ became effective July 1, 1969.
The primary purpose of this Act is to ____
In addition, the Act:
• Protects consumers against inaccurate and unfair ____ billing and credit card practices;
• Provides consumers with _______ rights;
• Provides for rate CAPS on certain dwelling-secured loans;
• Imposes limitations on home EQUITY lines of credit and certain CLOSED-end home mortgages;
• Provides MINIMUM standards for most dwelling-secured loans; and
• Delineates and PROHIBITS unfair or deceptive mortgage lending practices.

A. Z
B. Promote the informed use of consumer credit by requiring a uniform system for the disclosure of loan terms and costs.
C. Credit
D. Rescission

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Key Amendments:
The _____ Act of 1994 amended TILA. The law imposed ____ and substantive limitations on certain closed-end mortgage loans bearing ____ or ____ above a certain percentage or amount.

A. The Home Ownership and Equity Protection Act (HOEPA)
B. New disclosure requirements
C. Rates Or Fees

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Key Amendments:
The law also included new disclosure requirements to assist consumers in _____ the costs and other material considerations involved in a ______ mortgage transaction and authorized the Federal Reserve Board to prohibit specific acts and practices in connection with mortgage transactions.

A. Comparing
B. Reverse

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Key Amendments:
In July 2008, Regulation Z was amended to protect consumers in the mortgage market from _____, _____, or _____ lending and servicing practices.
Specifically, the change applied protections to a newly defined category of “ ______ mortgage loans” that includes virtually all closed-end subprime loans secured by a consumer’s principal dwelling. The revisions also applied new protections to mortgage loans secured by a dwelling, regardless of loan price, and REQUIRED the delivery of ______ disclosures for more types of transactions. The revisions also BANNED several _________ practices deemed deceptive or misleading.

A. Unfair, Abusive, or Deceptive
B. Higher-Priced
C. Early
D. Advertising

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Key Amendments:
The ______ Act of 2008 broadened and added to the requirements of the Board’s July 2008 final rule by requiring EARLY _______ between the time when disclosures are given and the _______ of the transaction. In 2009, Regulation Z was amended to address those provisions. The MDIA also requires _____ if the loan’s interest rate or payments CAN _____, as well as disclosure of a statement that there is NO guarantee that the consumer will be able to ______ in the future.
In 2010, Regulation Z was amended to address these provisions, which became effective on January 30, 2011.

A. Mortgage Disclosure Improvement Act of 2008 (MDIA)
B. Truth in Lending disclosures for more types of transactions and by adding a WAITING period
C. Consummation
D. Disclosure of payment examples
E. Change
F. Refinance

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Key Amendments:
In 2013, the CFPB further amended Regulation ___, as well as Regulation ___, to fulfill the mandate in the ______ Act to ______ under TILA and RESPA Sections 4 and 5. Regulation Z now contains two new forms required for most closed-end consumer mortgage loans. As mentioned, these amendments are referred to as the “TILA-RESPA Integrated Disclosure Rule” or “TRID” and require:
• The ______ to be provided within three business days from application, and
• The _____ Disclosure to be provided to consumers ______ business days before loan consummation.

A. Z
B. X
C. Dodd-Frank
D. Integrate the Mortgage Disclosures
E. Loan Estimate
F. 3
G. Closing
H. 3

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Regulation Z Subparts:
The rules that creditors must follow differ depending on whether the creditor is ____ open-end credit, such as credit cards or home-equity lines, or closed-end credit, such as car loans or mortgages.

A. Offering

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Regulation Z Subparts:
Regulation Z is divided into 4 subparts:
• Subpart ___ relates to open-end credit lines (revolving credit accounts), which include credit card accounts and home-equity lines of credit (HELOCs).

A. B

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Regulation Z Subparts:
Regulation Z is divided into 4 subparts:
• Subpart ___ relates to closed-end credit, such as home-purchase loans and motor vehicle loans with a fixed loan term. It contains rules on disclosures, treatment of credit balances, annual percentage rate calculations, right of rescission, and advertising.

A. C

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Regulation Z Subparts:
Regulation Z is divided into 4 subparts:
• Subpart ___ contains rules on oral disclosures, Spanish language disclosure in Puerto Rico, record retention, effect on state laws, state exemptions (which only apply to states that had Truth in Lending-type laws prior to the Federal Act), and rate limitations.

A. D

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Regulation Z Subparts:
Regulation Z is divided into 4 subparts:
• Subpart ___ contains special rules for mortgage transactions, such as prohibited acts and practices in connection with high-cost and higher-priced mortgages.
Appendices found in Regulation Z contain information such as the procedures for determinations about state laws, state exemptions and issuance of staff interpretations, special rules for certain kinds of credit plans, a list of enforcement agencies, model disclosures that, if used properly, ensure compliance with the Act, and rules for computing annual percentage rates in closed-end credit transactions and total annual loan cost rates for reverse mortgage transactions.

A. E

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Covered Transactions:
TILA and Regulation ____ apply to most creditors offering open-end and closed-end credit.
The following transactions are exempt from Regulation
Z:
• Credit extended PRIMARILY for a business, commercial, or agricultural purpose
• Credit extended to other than a natural PERSON (including credit to government agencies or instrumentalities)
• Credit in excess of an annually adjusted THRESHOLD not secured by real property or by personal property used or expected to be used as the principal dwelling of the consumer
• Public UTILITY credit
• Credit extended by a broker-dealer registered with the _____ or the ______ involving securities or commodities accounts
• Home FUEL budget plans NOT subject to a finance charge
• Certain STUDENT loan programs

A. Z
B. Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC)

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Federal Disclosure Laws:
TILA and RESPA Introduction:
The Truth in Lending Act (TILA):
Advertising Disclosures:
As implemented through Regulation Z ____ Part ____ Section _____ sets forth ____ requirements for which mortgage lenders must adhere.
Prior to the passage of TILA, an advertiser might have disclosed only the most attractive credit terms, distorting the true cost of financing. For example, the ad could have included the low monthly payment (e.g., $275 a month) without indicating the large down payment necessary to qualify for that payment level.
Advertisers did not have to disclose the APR or whether the transaction was a credit sale or lease.
Now, TILA requires advertisers to tell the whole story and to tell it ____ and ____. Anyone who places advertising that references ____ is required to follow the advertising provisions of TILA.

A. Part 1026 Section 24
B. Advertising Disclosure
C. Clearly and Conspicuously
D. Consumer Credit

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Federal Disclosure Laws: Advertising Disclosures:
Triggering Terms Requiring
Advertising Disclosure:
An advertisement stating any of one of four triggering terms must also state additional loan disclosures required by Regulation Z:
_____ Payment Amount
> Trigger Term Examples:
• Only 5% down
• As low as $100 down
• Total move-in costs of $800
> Not Trigger Term Examples:
• No down payment
• No trade-in required

A. Down

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Federal Disclosure Laws: Advertising Disclosures:
Triggering Terms Requiring
Advertising Disclosure:
An advertisement stating any of these four triggering terms must also state additional loan disclosures required by Regulation Z:
Payment ________
> Trigger Term Examples:
• 48-month payment terms
• 30-year mortgage
• Repayment in as many as 36 monthly installments
> Not Trigger Term Examples
• Pay weekly
• Monthly payment terms arranged
• Take years to repay

A. Period

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Federal Disclosure Laws: Advertising Disclosures: Triggering Terms Requiring Advertising Disclosure: An advertisement stating any of these four triggering terms must also state additional loan disclosures required by Regulation Z: Payment _______ > Trigger Term Examples: • Payable in installments of $100 • $25 weekly • $500,000 loan for just $1,650 per month • $1,200 balance payable in 10 equal installments > Not Trigger Term Examples • Monthly payments to suit your needs • Regular monthly payments

A. Amount

Federal Disclosure Laws: Advertising Disclosures: Triggering Terms Requiring Advertising Disclosure: An advertisement stating any of these four triggering terms must also state additional loan disclosures required by Regulation Z: _______ Charge: > Trigger Term Examples • $500 total cost of credit • $2 monthly carrying charge • $50,000 mortgages, 2 points to the borrower > Not Trigger Term Examples • Annual percentage rate • No closing costs

A. Finance

Federal Disclosure Laws: Advertising Disclosures: Triggering Terms Requiring Advertising Disclosure: The common element in the trigger term examples is the quoting of a "_____" number. When creating any form of advertisement, the mortgage company or loan originator must refer to TILA for guidance in making full disclosure to the consumer who will view the advertisement. Pay attention to the placement of "specific" numbers in the advertisement and the requirements they implement. The only "specific" number that is always acceptable is the ______.

A. Specific B. Actual APR

Federal Disclosure Laws: Advertising Disclosures: Triggering Terms Requiring Advertising Disclosure: If an ad contains any of the triggering terms, the ad must also contain the relevant disclosures as follows: 1. Disclosure of Total ______ • 10% cash required from the buyer • Credit terms require a minimum $100 trade-in 2. Disclosure of _____term of the loan in either: • ________: 48 monthly payments of $27.83 per $1,000 borrowed > When any series of payments ______, it must be stated: • Number and timing of payments • Fact that payments do not include amounts for mortgage insurance premiums. • Fact that actual payment obligation will be higher > When one series of monthly payments applies for a _____ time followed by an _______-rate series of higher monthly payments for the remaining term, state: • Number and time period for each series of payments • Amounts of each of those payments 3. Disclosure of ______rate • Must use "annual percentage rate" or APR • Identify if APR is subject to increase • Only other rate that can be stated is the simple annual rate as long as it is the same type SIZE as the APR.

A. Down Payment $ or % B. Repayment Terms over the Full C. Unit-Cost Approach D. Vary E. Limited F. Adjustable G. Annual Percentage

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: A ______ -end credit transaction is one in which the balance is expected to be repaid--along with any interest and finance charges--by a SPECIFIC ______. Most real estate loans are closed-end. Additional advertising provisions in Regulation Z are related to these loans.

A. Closed B. Specified Future Date

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: _______: If an advertisement states a ______ annual rate of interest and more than one rate applies over the term of the loan, the advertisement must also disclose-with EQUAL prominence and in CLOSE proximity to the advertised rate: • Each SIMPLE annual rate of interest that will apply; if a variable rate, a reasonably current index, and a margin MUST be used. • The period of TIME during which each simple annual rate of interest applies. • The APR for the loan.

A. Rate B. Simple

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: _______ Amount: If the advertisement states the amount of any payment, it must also disclose--with EQUAL prominence and in CLOSE proximity to the payment: • The AMOUNT of each payment that applies over the term of the loan, including any BALLOON payment; if a VARIABLE rate, a reasonably current INDEX, and a MARGIN must be used. • The period of TIME during which each payment applies.

A. Payment

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: When the ad for a first lien mortgage loan states the _____ of any payment, it must also state prominently (but NOT with equal prominence) and in CLOSE proximity to the advertised payment that the payments ______ include amounts for taxes and insurance, if applicable, and that the actual payment amount will be higher.

A. Amount B. DO NOT

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: _________: Advertisements may NOT compare actual or hypothetical payments or rates and a "teaser" payment or simple annual rate available for the advertised product _____ the ad includes a CLEAR and CONSPICUOUS comparison to the TERMS required to be disclosed (APR, term, payments, etc.). If advertising a variable rate transaction where the payment or simple annual rate is based on the index and margin used to make subsequent rate or payment adjustments, the advertisement must include an EQUALLY prominent statement, in CLOSE proximity, that the payment or rate is SUBJECT to adjustment, as well as the TIME period when the first adjustment will occur.

A. Payment and Rate Comparisons B. Unless

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: Use of the Term "______." If an advertisement references _____ variable and non-variable rate loans, the terms "adjustable-rate mortgage," "variable rate mortgage," or "ARM" must appear with EQUAL prominence as any use of the term "fixed" or "fixed-rate mortgage." Also, the term "fixed" must clearly refer only to TRANSACTIONS with fixed rates. If referring to a payment or a variable rate, it must also include the TIME period for which the rate or payment is fixed and a statement that the rate can vary and the payment can increase after that.

A. Fixed B. BOTH

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: If an advertisement references a ______ Rate loan, the phrase "adjustable-rate mortgage," "variable rate mortgage," or "ARM" MUST appear ______ the first use of the term "fixed" and must be at least as conspicuous as the word "fixed." In addition, the ad must clearly indicate the time period for which the rate or payment is fixed, and a statement that the rate may vary or the payment may increase after that period. If the ad references a rate loan where the payment amount increases, the use of the word "fixed" must state the fact that the rate may vary or the payment may increase after that period.

A. Variable Rate B. Non-Variable Rate C. BEFORE

Federal Disclosure Laws: Advertising Disclosures: Advertising Closed-End Credit Loan Regulations: _______: If a catalog or other multiple-page advertisement, or an electronic advertisement (such as an advertisement appearing on an Internet website), gives information in a table or schedule in sufficient detail that includes triggering terms requiring additional disclosure, it would be considered a ______ advertisement under the following circumstances: • The table or schedule is clearly and conspicuously set forth, and • Any statement of the triggering credit terms appearing anywhere else in the catalog or advertisement clearly refers to the PAGE or LOCATION where the table or schedule ______. The table or schedule of terms MUST include all appropriate disclosures for a representative scale of amounts up to the level of the more commonly sold _____-priced property or services offered.

A. Catalogs, Multiple-Page Ads, and Electronic Ads B. Single C. Begins D. Higher

Federal Disclosure Laws: Advertising Disclosures: Advertising Open-End Credit Loan Regulations: _______ credit refers to a loan where credit is extended to the borrower during the _____ and the creditor may impose a _______ charge on the outstanding unpaid balance, such as a home equity line of credit (HELOC). It's critical that ads for these loans not use misleading terms, such as "_____ money."

A. Open-End B. Term C. Finance D. Free

Federal Disclosure Laws: Advertising Disclosures: Advertising Open-End Credit Loan Regulations: These loans are also subject to the disclosure provisions previously discussed as well these additional ______: 1. If any of the triggering terms are used or the payment terms of the plan are set forth, affirmatively or negatively, in an advertisement, the ad must also clearly and conspicuously state the following: • Any _____ fee that is a percentage of the credit limit under the plan and an estimate of any other fees imposed for opening the plan expressed as a single dollar amount or a reasonable range • Any _______ rate used to compute the finance charge expressed as an annual percentage rate • The _____ rate that may be imposed in a variable-rate plan

A. Provisions B. Loan Fee C. Periodic Rate D. Maximum Annual Percentage

Federal Disclosure Laws: Advertising Disclosures: Advertising Open-End Credit Loan Regulations: If an advertisement states an initial APR that is ____ based on the index and margin used to make later rate adjustments in a variable-rate plan, the ad MUST also clearly indicate the period of time such _____ rate is in effect and a reasonably current _____ that would have been in effect using the index and margin.

A. NOT B. Initial C. APR

Federal Disclosure Laws: Advertising Disclosures: Advertising Open-End Credit Loan Regulations: ______: If an ad states a minimum payment and a balloon payment may result if ONLY the ______ periodic payment is made, that fact must be stated with EQUAL prominence and CLOSE proximity.

A. Balloon Payments B. Minimum

Federal Disclosure Laws: Advertising Disclosures: Advertising Open-End Credit Loan Regulations: _______: If a HELOC advertisement states a promotional rate and/or a promotional payment, the ad must disclose-in a clear and conspicuous manner and with equal prominence and in close proximity to EACH LISTING of the promotional rate or payment--all of the following: • The period of time during which the promotional rate or payment _______ • If a promotional rate, any ____ that applies (if a VARIABLE rate, the APR must be disclosed within established accuracy standards) • If a promotional payment, the _____ and _____ periods of any payments that will apply under the plan. (If the payment is based on the application of a variable index and margin, it must be disclosed based on a reasonable _____ index and margin.)

A. Promotional Rates and Payment B. Applies C. APR D. Amounts and Time E. Current

Federal Disclosure Laws: Advertising Disclosures: Advertising Open-End Credit Loan Regulations: If an ad stating a promotional rate is broadcast on radio or television, in lieu of stating these disclosures, a _______ number (or one that allows consumers to reverse charges) from which to get additional cost information must be indicated. NOTE: These provisions do NOT apply to an envelope in • which an application or solicitation is mailed or to a banner advertisement or pop-up advertisement linked to an application or solicitation provided electronically.

A. Toll-Free Telephone

Federal Disclosure Laws: Advertising Disclosures: Advertising General Provision Regulations: _______: Care must be taken to ensure that an advertisement that states any tax implications-such as whether interest is tax-deductible--is NOT misleading. There are additional requirements imposed on ads distributed in paper form or through the Internet, rather than broadcast on radio or television: • If the ad states the advertised extension of credit may exceed the fair market value of the dwelling, it must also clearly and conspicuously state that the interest on that portion of the loan is NOT _____ for federal income tax purposes. • The consumer must be advised to consult a tax adviser about the _____ of interest and charges.

A. Tax Implications B. Tax-Deductible C. Deductibility

Federal Disclosure Laws: Advertising Disclosures: Advertising General Provision Regulations: ______: Regulation Z prohibits: • Misinformation about a loan product being GOVERNMENT endorsed. • Misleading use of the current LENDER's name in the advertisement or claims of debt elimination. • Using the term "______" in any advertisement to refer to a for-profit mortgage broker or lender. • In a foreign language advertisement, providing information about some trigger terms or required disclosures in a foreign language while providing information about other trigger terms or required disclosures _____ in English.

A. Misrepresentations B. Counselor C. ONLY

Federal Disclosure Laws: Advertising Disclosures: Advertising General Provision Regulations: ________: When considering oral advertisements for credit secured by a dwelling, including alternative disclosures as provided, a clear and conspicuous disclosure, whether by radio, television, or other medium, means that the required disclosures are given at a _____ and ______ sufficient for a consumer to hear and comprehend them. For example, information stated very RAPIDLY at a LOW volume in a radio or television advertisement would NOT meet the clear and conspicuous standard if consumers CANNOT hear and comprehend the information required to be disclosed.

A. Clear and Conspicuous Standard B. Speed C. Volume

Federal Disclosure Laws: Federal Disclosures Overview: The Truth-in-Lending Act, as implemented by Regulation Z. and the Real Estate Settlement Procedures Act, as implemented by Regulation X, set forth ______ requirements for most mortgage transactions. Recall: • TILA and Regulation Z provisions primarily focus on promoting the _____ through proper disclosure, and • RESPA and Regulation X provisions are primarily intended to help consumers become better shoppers for _____ services.

A. Disclosure B. Informed use of Consumer Credit C. Settlement

Federal Disclosure Laws: Federal Disclosures Overview: As previously mentioned, the TILA-RESPA Integrated Disclosure Rule (TRID) consolidates four disclosure forms that were formally required under TILA and RESPA into two forms: The _____ and the _______. TRID requirements are incorporated in the provisions of Regulation Z and X. NOTE: Disclosure form requirements set forth in TRID do NOT apply to reverse mortgages, HELOCs, and chattel mortgages (mobile home and unattached premises). There are disclosure requirements for loan types ____ from TRID. For all loan types, there is a partial exemption from federal disclosure requirements for loans secured by ____ liens and associated with certain housing assistance loan programs for low- and moderate-income persons.

A. Loan Estimate B. Closing Disclosure C. EXEMPT D. Subordinate

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: ________: This is a disclosure document that provides mortgage loan applicants with detailed information about the mortgage _____, settlement service provider charges, closing costs, and features of the loan program for which the lender recommends the prospective borrower proceed.

A. Loan Estimate B. Terms

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: _________: This is a disclosure document that provides similar information as provided on the Loan Estimate; HOWEVER, it provides final details about the mortgage loan that the borrower has been approved for and agreed to ______.

A. Initial Closing Disclosure B. Consummate

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: ________: This disclosure document is the same as used for the Initial Closing Disclosure providing the actual final _______ about the borrower's consummated mortgage loan.

A. Final Closing Disclosure B. Final C. Details

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: ________: This is a brochure used in connection with the _____ and ______ forms. The brochure provides mortgage loan applicants with a step-by-step guide for making good choices along the path to owning a home. It includes information about what it takes to buy a home, steps borrowers should take to obtain the best mortgage, and information about closing costs. The CFPB provides an electronic version complete with fillable text fields and interactive checkboxes.

A. Your Home Loan Toolkit B. Loan Estimate C. Closing Disclosure

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: ________: A mortgage loan applicant must be provided a CLEAR and CONSPICUOUS written list of homeownership counseling organizations providing relevant counseling services in the applicant's location.

A. List of HUD-Approved Housing Counselors

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: _______: The CHARM booklet is provided to mortgage loan applicants when an application is submitted for an ______. The booklet gives the applicant an overview of ARMs, explains how ARMs work, and discusses some of the issues that an ARM borrower might face.

A. Consumer Handbook on Adjustable-Rate Mortgages (CHARM). B. Adjustable-Rate Mortgage (ARM)

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: ______: When a borrower is _____ to shop for a settlement service, a Written List of Settlement Service Providers must be given to the mortgage loan applicant. The list identifies at least ______ available provider for each type of settlement service that can be shopped for.

A. Written List of Settlement Service Providers B. Permitted C. One

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: _______: A lender is to provide an AfBA Disclosure to an applicant when the lender owns greater than ___% of a referred provider or has a personal interest in the provider. The AfBA Disclosure document provides information to a borrower about the relationship that exists between the lender and the settlement service provider and the ______ charge or range of charges generally made by such provider.

A. Affiliated Business Arrangement (AfBA) Disclosure B. 1% C. Estimated

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: _______: This Statement provides an itemization of the estimated taxes, insurance premiums, and other charges anticipated to be paid from the escrow account during the first ____ months of the loan. It lists the escrow payment amount and any required impound account cushion. Although the statement is usually given at settlement, the lender has _____ days from settlement to deliver it.

A. Initial Escrow Statement B. 12 C. 45

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: _______: This statement discloses all escrow account deposits and payments during the servicer's ____-month computation year. It also NOTIFIES the borrower of any shortages or surpluses in the account and ADVISES the borrower about the course of action being taken. It must be delivered to borrowers by loan servicers once a ______.

A. Annual Escrow Statement B. 12 C. Year

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosures Descriptions: _______: This notice is required when the loan servicer sells or assigns the servicing rights to a borrower's loan to ______ loan servicer. The notice must include the name and address of the new servicer, toll-free telephone numbers, and the date the new servicer will begin accepting payments. Generally, the loan servicer must notify the borrower ____ davs before the effective date of a servicing transfer.

A. Servicing Transfer Notice B. Another C. 15 Days

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosure Timing: To comply with disclosure requirements, it is important to understand when each disclosure must be provided to an applicant or borrower. At a high level, the following is the required transactional _____ for providing required disclosures.

A. Timeframe

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosure Timing: 1a. When Must The Disclosure Be Given: > At or within 3 business days of complete application. 1b. What Disclosures Will Be Given:

A. • Loan Estimate • Your Home Loan Tool Kit [Purchases Only] • List of HUD-approved housing counselors • Written List of Settlement Service Providers • If applicable: CHARM booklet • If applicable: AfBA Disclosure

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosure Timing: 2a. When Must The Disclosure Be Given: > At least 3 business days before settlement. 2b. What Disclosures Will Be Given:

A. • Initial Closing Disclosure

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosure Timing: 3a. When Must The Disclosure Be Given: > At settlement. 3b. What Disclosures Will Be Given:

A. • Final Closing Disclosure • Initial Escrow Statement

Federal Disclosure Laws: Federal Disclosures Overview: Mortgage Disclosure Timing: 4a. When Must The Disclosure Be Given: > After settlement. 4b. What Disclosures Will Be Given:

A. • Annual Escrow Statement • Servicing Transfer Notice

Federal Disclosure Laws: Federal Disclosures Overview: Complete Application Defined: There are three terms that you will hear often in federal disclosure requirements: • ________ • ________ • ________

A. Complete Application B. Settlement Service C. Business Day

Federal Disclosure Laws: Federal Disclosures Overview: Complete Application Defined: A complete application that triggers required federal disclosures at application, such as the Loan Estimate, consists of six pieces of information: *Hint* ALIENS 1. 2. 3. 4. 5. 6.

A. ALIENS 1. Applicant's name 2. Applicant's Social Security number 3. Applicant's income 4. Loan amount sought 5. Estimate of property value 6. Property address

Federal Disclosure Laws: Federal Disclosures Overview: Settlement Service Defined: The Loan Estimate and Closing Disclosure _____ require the disclosure of the COST of ALL settlement services. RESPA defines settlement service as any service provided in connection with a prospective or actual settlement, including, but not limited to: • Any services related to the ORIGINATION, PROCESSING, UNDERWRITING , or FUNDING of a mortgage loan, including service by a mortgage BROKER • TITLE services • Services by an ATTORNEY • Preparation of documents, including NOTARIZATION, DELIVERY, and RECORDATION • RENDERING of credit reports and appraisals • INSPECTIONS • Conducting of settlement by a settlement AGENT and any related services • Services involving mortgage, hazard, flood, or other casualty INSURANCE or homeowner's WARRANTIES • Services involving real property TAXES or any other ASSESSMENTS or CHARGES on the real property • Any other services for which a SETTLEMENT service provider requires a borrower or seller to pay

A. BOTH

Federal Disclosure Laws: Federal Disclosures Overview: Business Day Defined: When it comes to providing required mortgage disclosure within the required timeframe, the term "business day" is frequently used. Regulation Z offers this definition of business day: Business day means a dav on which the creditor's offices are open to the public for carrying on substantially all of its business functions; however; for purposes of _______, the term means all calendar davs except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Juneteenth, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.

A. Rescission

Federal Disclosure Laws: Federal Disclosures Overview: Business Day Defined: Business day means a day on which the creditor's offices are open to the public for carrying on substantially ALL of its business functions. Per CFPB guidance: • ________: Availability of personnel to make loan disbursements, to open new accounts, and to handle credit transaction inquiries.

A. Open for Business

Federal Disclosure Laws: The Loan Estimate: This provides the mortgage loan applicant with detailed information about a mortgage loan. A lender is to use the Loan Estimate to provide a _______ lestimate of loan costs and should walk through its contents to explain and ensure the applicant understands the financial obligations associated with the loan. The requirement to provide a _____ does NOT apply to ALL real estate loans. Certain loan transactions involving real property may require other disclosures under TILA or may not fall within the mandates of TILA. EXEMPTIONS include the following: • Home EQUITY lines of credit • REVERSE mortgages • Loans to secure a FRACTIONAL interest in real estate (timeshares) • Loans for mobile homes or dwellings NOT AFFIXED to real property • Loans made by a person or entity that makes FIVE or FEWER mortgages in a calendar year • Loans made to a non-natural PERSON (business entity) NOTE: Loan Estimate requirements apply to vacant land or land consisting of more than ____ acres, loans made to certain trusts utilized for tax and estate planning purposes, and construction-only loans.

A. Good Faith B. Loan Estimate C. 25

Federal Disclosure Laws: The Loan Estimate: Good Faith Estimate Compliance: One of the most important concepts that a lender needs to understand when completing an initial Loan Estimate is the concept of a " _______ estimate." The Loan Estimate is designed to provide an ACCURATE estimate of all settlement provider charges the borrower can expect to INCUR as part of the mortgage loan origination process and during the mortgage term. Lenders need to ensure the charges listed on a Loan Estimate provided to a mortgage applicant are provided in good faith. Like a contract or other written agreement, the Loan Estimate involves two or more parties, namely the lender and the borrowers), who seek some type of benefit from the transaction. When parties enter into a written agreement, they are generally held to the terms of that agreement. Similarly, by creating and issuing the Loan Estimate, the ______ is held to its terms. Whether the Loan Estimate is made in good faith is determined by the difference between the ______ and the final costs charged at ______.

A. Good Faith B. Lender C. Initial Cost Estimate D. Loan Closing

Federal Disclosure Laws: The Loan Estimate: Good Faith Estimate Compliance: The general rule is that if the settlement costs on the Closing Disclosure are: • _______ than what was disclosed initially on the Loan Estimate, outside a certain tolerance the Loan Estimate is assumed to NOT be made in good faith. • Equal or _____than the Loan Estimate, the originator is assumed to have acted in good faith when making the initial Loan Estimate. Even if a Loan Estimate is provided to the borrower in good faith, settlement charges can change at loan consummation unexpectedly. There are regulations regarding what settlement service provider costs _____ change, may change by a _____ amount, or may _____ change from the initial Loan Estimate.

A. Greater B. Less C. MAY D. LIMITED E. NOT

Federal Disclosure Laws: The Loan Estimate: Delivery Time Requirements: These allowed deviations, also called tolerances, usually relate to estimated settlement costs. NOTE: That the specifically allowed tolerances for change are per TILA Regulation Z. Delivery Time Requirements: The ______ Loan Estimate and other initial disclosures must be delivered or placed in the mail: • No later than _____ business days after the lender receives a complete application for a residential mortgage loan (______), and • At least ______ business days before consummation of the transaction (_______). If delivered in person, the Loan Estimate is considered received by the consumer on the day it is delivered.

A. Initial B. 3 C. Business Day Rule D. 7 E. More Precise Business Day Rule E. 3

Federal Disclosure Laws: The Loan Estimate: Scope of Responsibility: The _______ has the ultimate responsibility for the correct and timely delivery of disclosures to the consumer. If a mortgage broker, one who places a loan submission with a wholesale lender to underwrite and fund the loan, receives a complete mortgage loan application, either the ____ or the _____ may make the Loan Estimate and other initial disclosures. If the mortgage broker completes the Loan Estimate, the wholesale lender's name (if known) must be identified on the Loan Estimate. If it is not known, the space must be left _____. If the applicant WITHDRAWS the application or the lender DECLINES the loan before the end of the _____-business-day period, the Loan Estimate does not need to be provided. NOTE: _______ means the time that a consumer becomes contractually obligated on a credit transaction.

A. Creditor B. Lender or the Mortgage Broker C. Blank D. Three E. Consummation

Federal Disclosure Laws: The Loan Estimate: Delivery Time Requirements: NOTE: If the Loan Estimate, Written List of Settlement Service Providers, and AfBA Disclosure are all given at the ____ time, within ______ business days of a complete application, you are sure to comply with the delivery time requirements for each of these ______ disclosures.

A. SAME B. 3 C. 3

Federal Disclosure Laws: Other Initial Application Disclosures: Affiliated Business Relationship Violation Example: A case of a violation of 12 U.S.C. 2602(7) received an enforcement action from the CFPB in September 2019. The violation was against a real estate settlement services provider, Tim's Title Corporation. According to the CFPB: Tim's Title Corporation (TTC) is a real estate settlement agent and title insurance agency. As a settlement agent, TTC provides real estate settlement services and conducts loan closings in connection with residential real estate transactions. Lenders normally require title insurance to protect their interests when providing a mortgage loan in the event someone else can collect on a lien or there are back taxes owed on the property. Consumers are normally able to _______ the title insurance provider during the home-buying process as long as the title insurance policy complies with lender requirements. As a title insurance agent, TTC receives orders for title insurance policies from lenders and real estate agents, and in some cases, directly from consumers, and assigns those orders to title insurance underwriters. The CFPB found that TTC _____ selected Arsenal Insurance Corporation, a company owned in part by three of TTC's own executives, as the title insurance underwriter for its customers. When it selected Arsenal, the CFPB found that TTC was able to keep extra money beyond the commission it would normally have been entitled to collect, based on an understanding that TTC would select Arsenal as the underwriter. A company like TTC that receives ______ pursuant to an agreement or understanding that business will be referred to an affiliated business like Arsenal must generally _____ its relationship to the consumer in question, among other conditions, in order to avoid a violation of the Real Estate Settlement Procedures Act. In its investigation, the CFPB found that TTC ___ to make the necessary disclosures to more than 7,000 consumers when it selected Arsenal to provide title insurance and also did not satisfy other conditions for avoiding a violation of the law.

A. Select B. Routinely C. Anything Of Value D. Disclose E. Failed

Federal Disclosure Laws: Other Initial Application Disclosures: Affiliated Business Relationship Violation Example: Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions or individuals violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB's order requires TTC to: A. Under the order, T'TC is required to pay up to _______ to consumers who were referred to and purchased title insurance from Arsenal but did not receive appropriate disclosures. • Stop __________. TTC must not violate RESPA and must implement policies and procedures to ensure it properly discloses to consumers whenever it makes an applicable referral."

A. $1.25 million in Redress B. Stop violating the law and start providing disclosures.

Federal Disclosure Laws: The Loan Estimate: Initial Application Disclosures: Lender Larry must provide an applicant with a list of ______ HUD-approved housing counseling agencies.

A. 10

Federal Disclosure Laws: Federal Disclosures Overview: Business Day Defined: Within this one definition, there are actually two different definitions for the term business day as applied to mortgage disclosure time requirements. The two business day definitions and when they each apply to mortgage disclosure time requirements are referred to as the ______ and the ______.

A. Business Day Rule B. More Precise Business Day Rule

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Identifies WHETHER the interest rate disclosed on the Loan Estimate is locked for a specific period of time via a statement labeled RATE LOCK. For transactions in which the interest rate is locked for a specific period of time, the lender must provide the DATE and TIME, including the applicable ______, when that PERIOD ENDS. The Rate Lock statement must be ACCOMPANIED BY A STATEMENT that the "interest rate, any points, and any lender credits may change unless the interest rate has been locked."The statement must also include the date and time, including the applicable time zone, when ESTIMATED CLOSING COSTS WILL EXPIRE.

A. Rate Lock Field B. Time Zone

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Identifies the LOAN TERMS, such as loan amount, interest rate, monthly principal, and interest, and identifies if these terms are subject to change after closing.

A. Loan Terms Section

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Compares payments during the years that mortgage insurance is in ______ with the remaining years after mortgage insurance is ______, showing the borrower the difference in payments

A. Projected Payments Section B. Place C. Cancelled

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Provides a good faith estimate of: 1a. 1b. 1c. The rules that apply to completing this section are covered in more detail later.

A. Loan Costs Section B. Origination charges C. Services the borrower cannot shop for D. Services the borrower can shop for

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Lists fees that are part of the real estate ___ but NOT required by the creditor or NOT _____ elsewhere, such as recording fees, transfer taxes, mortgage insurance premiums, property taxes, and lender credits.

A. Other Costs B. Closing C. Disclosed

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Discloses Estimated Cash to Close. The earnest money deposit is shown and deducted from the Cash to Close total so the borrower has a clear picture of the FUNDS required at ______.

A. Estimated Cash to Close Field B. Closing

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Section: ________ Description: Provides the LOAN OFFICER's name, NMLS ID, email, and phone. Also provides the name of the ____ or _____ and NMLS ID if available.

A. At the Top of Page 3 B. Lender or Broker

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Provides required APR-related disclosures that an applicant can use to compare with other loan offers, including APR, TIP, total of payments made, and principal reduction of the loan in the first ____ years.

A. Comparisons Section B. 5

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Provides REQUIRED disclosures, such as: • The borrower's right to a copy of their ______. • The right to select a homeowner's _____ provider. • Whether the loan will be _____ for servicing. • Assumption, late payment, and refinancing TERMS.

A. Other Considerations Section B. Appraisal C. Insurance D. Transferred

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Section: ________ Description: Provides a designated place for borrowers to sign and confirm they have received the Loan Estimate and intend to ____ with their mortgage application. NOTE: "N/A" cannot be entered in a field on the Loan Estimate. Fields are to be left blank rather than using "N/A."

A. Confirm Receipt B. Proceed

Federal Disclosure Laws: The Loan Estimate: Availability of Terms: The estimate of the charges and terms for all settlement services must be available for at least ______ business days from when the Loan Estimate is provided but may remain available longer if the MLO extends the period of availability. This 10-business-day provision does not apply to the interest rate, charges, and terms dependent upon the interest rate--which includes the charge or credit for the interest rate chosen--the adiusted origination charges, and per diem interest. Because of this, borrowers and lenders frequently agree to a rate lock for a pre-determined period of time

A. 10

A. Business Day Rule

Federal Disclosure Laws: Federal Disclosures Overview: Business Day Rule In Regards To Application Disclosures: Applies to most initial application disclosures specific to the delivery of the disclosure within three business days of the receipt of a complete application, including delivery of the: • Loan _____ • Your Home Loan ____ Kit brochure • List of _____ HUD-approved housing counselors • List of ______ service providers for which the lender permits the consumer to shop • For home equity loans: When Your Home is on the ______ disclosure • For adjustable-rate mortgage loans: _____ Booklet • If applicable: ________

A. Estimate B. Tool C. 10 D. Settlement E. LINE F. CHARM G. AfBA Disclosure

Federal Disclosure Laws: Federal Disclosures Overview: More Precise Business Day Rule: ...however, for purposes of _____ the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Juneteenth, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.

A. Rescission

Federal Disclosure Laws: Federal Disclosures Overview: More Precise Business Day Rule: The More Precise Business Day Rule counts ALL calendar days, except Sundays and holidays, as a business day. Simply defined-a CALENDAR day is any day on the calendar. So whether an office is conducting business or not, every calendar day counts as a business day unless it is Sunday or an official _____ holiday.

A. Federal

Federal Disclosure Laws: Federal Disclosures Overview: More Precise Business Day Rule: NOTE: If a federal holiday is observed on a different day by federal offices, the exempted calendar day is still the ACTUAL federal holiday-not the _____ day. For example, if federal offices close on July 3 because July 4 falls on a Saturday, Saturday is still the official holiday that is NOT counted as a business day.

A. Observed

Federal Disclosure Laws: Federal Disclosures Overview: More Precise Business Day Rule In Regards To Application Disclosures: Applies to: • Determining rescission periods following notice of right to rescind (3 business days) • Receipt of early and final disclosures IF MAILED OR SENT ELECTRONICALLY(3 business days) • Waiting period before consummation AFTER EARLY DISCLOSURES (___ business days) • Waiting period before consummation AFTER REVISED LE (___ business days) • Waiting period before consummation after delivery of INITIAL CD (3 business days) • Waiting period before consummation after delivery of REVISED CD (3 business days) • Waiting period before consummation after _______ disclosures (3 business days) • Waiting period before consummation or first draw after REVERSE MORTGAGE disclosures (3 business days) • Waiting period after ESCROW ACCOUNT CANCELLATION notice (____ business days)

A. 7 B. 4 C. HOEPA D. 30

Federal Disclosure Laws: The Loan Estimate: Key information to be included in a Loan Estimate: Field: ________ Description: Identifies the DATE that required application disclosures are _____ or _____ to the consumer. The method of delivering the Loan Estimate and other required disclosures to the applicant does not affect the date issued. For example, if you hand-deliver the Loan Estimate to the consumer on August 14, or you place the Loan Estimate in the mail on August 14, the date recorded as the Date Issued is August 14.

A. Date Issued Field B. Mailed Out C. Electronically Delivered

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: For residential mortgages, the disclosure of the ANNUAL PERCENTAGE RATE (APR) is very important. The APR tells a borrower the total cost of financing a loan in percentage terms as a relationship of the total finance charges to the total amount financed. The APR is not simply the interest rate that appears in the promissory note, known as the ______. Rather, it reflects certain ______ charges associated with the loan that are spread out over the life of the loan. Therefore, the APR is generally ______ than the note rate.

A. Note Rate B. Finance C. Higher

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: It can be a challenge to explain closing costs and fees to consumers, especially to define those fees that are considered finance charges for the purpose of calculating the APR. Regulation Z defines the ____ charge as the COST OF CONSUMER CREDIT AS A DOLLAR AMOUNT. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge payable in a comparable cash transaction.

A. Finance

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: Fees charged by a mortgage broker (including fees paid by the consumer directly to the broker or the creditor for delivery to the broker) are ______ charges, even if the creditor does NOT require the consumer to use a mortgage broker and does NOT retain any portion of the charge.

A. Finance

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: One of the most IMPORTANT concepts to remember about the federal Truth in Lending Act is the requirement that lenders provide a UNIFORM METHOD OF FINANCE CHARGE _______. This method is expressing the true cost of credit OVER the term of the loan as a percentage and NOT as a dollar amount.

A. Disclosure

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: According to Regulation Z, the following are examples of finance charges: • _______, time price differential, and any amount payable under an add-on or discount system of additional charges • ________ transaction activity and carrying charges, including any charge imposed on a checking or other transaction account to the extent that the charge exceeds the charge for a similar account without a credit feature • _____, loan fees, assumption fees, finder's fees, and similar charges

A. Interest B. Service C. Points

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: The following are EXCLUDED from finance charges: 1. Seller's _____ 2. Interest _____ as a result of an interest reduction REQUIRED by law on a time deposit used as SECURITY for an extension of credit 3. Fees in a transaction secured by real property or in a residential mortgage transaction, if _____ and a reasonable amount, including: • Fees for _____ examination, abstract of title, title insurance, property survey, and similar purposes • Fees for preparing loan-related ______, such as deeds, mortgages, and reconveyance or settlement documents • Notary and ____ report fees • Property _____ fees or fees for inspections to assess the value or condition of the property if the service is performed prior to closing, including fees related to pest infestation or flood hazard determinations • Amounts required to be paid into ____ or ____ accounts if the amounts would not otherwise be included in the finance charge

A. Points B. Forfeited C. Bona Fide D. Title E. Documents F. Credit G. Appraisal H. Escrow or Trustee

Federal Disclosure Laws: The Loan Estimate: APR and Finance Charge Disclosure: As a general rule to assist you with determining what closing costs are included in the APR, consider this: If a borrower is purchasing a home for CASH, there are certain CLOSING COSTS that the borrower will NOT INCUR such as an application fee, credit report fee, underwriting fee, mortgage insurance, and interest. These are generally the same costs that are INCLUDED in the _____ calculation.

A. APR

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Compliance: There may be valid reasons to provide borrowers with a REVISED Loan Estimate that may be used for GOOD FAITH analysis purposes. Recall that a good faith analysis is completed by ______ the Loan Estimate to the Closing Disclosure to determine if there are differences in the initial cost estimates and the final costs charged that are outside the allowed tolerance for change. Understand that even when there are changes in loan terms, a revised Loan Estimate, strictly speaking, is never required. If fees or terms change so that they EXCEED prescribed _______, lenders have the option to absorb the additional expense or issue a refund rather than issuing a revised Loan Estimate.

A. Comparing B. Tolerances

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Compliance: Under the following defined circumstances, lenders may issue a REVISED Loan Estimate that can be used for GOOD FAITH analysis: 1. Changed ______ affecting loan terms or settlement charges, property value, or the consumer's eligibility 1a. ______ beyond lender or borrower control 1b. Information relied on for the loan decision changes or was ______ 2. ______ requested changes 3. ______ of interest rate lock changes (borrower-initiated lock or expiration of lock) 4. ______ of initial Loan Estimate 5. ______ loan settlement DELAYS Per TILAs Regulation Z REQUIRES that documentation to show _____ for a revised Loan Estimate be maintained as evidence of compliance for _____ years after the later of the date of CONSUMMATION, the date disclosures are REQUIRED to be made, or the date the ACTION is required to be taken.

A. Circumstances B. Event C. Inaccurate D. Consumer E. Status F. Expiration G. Construction H. Reason(s) I. Three

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Approved Changed Circumstances: Examples of changed circumstances affecting loan terms or settlement charges, property value, or the consumer's eligibility that allow for a revised Loan Estimate used for good faith analysis include: • An event that is beyond the control of the creditor or the borrower occurs, such as a natural ____ in the property's community, which results in increased settlement costs. • Information that was known or provided at the time of the application changed _____ to the application and caused a change in the initial loan terms, interest rates, or settlement service provider charges; i.e., a third-party provider CEASES to be in business and the creditor is forced to seek services from another source that charges an increased fee. • New information regarding the borrower or the loan that the creditor did NOT rely on when supplying the Loan Estimate, as in a borrower becoming unemployed prior to closing during the course of the loan. • The consumer became _____ for an estimated charge previously disclosed because of creditworthiness or the value of the security for the loan. NOTE: A creditor neglecting to disclose a fee or overlooking a financial obligation/liability of a borrower is _____ a VALID changed circumstance.

A. Disaster B. Subsequent C. Ineligible D. NOT

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Approved Changed Circumstances: Consumer-Requested Changes: A lender may use a revised estimate of a charge if the consumer requests revisions to the credit terms or settlement that affect items disclosed on the Loan Estimate and that causes an estimated fee/charge to _____. For example, assume that after the Loan Estimate is provided, the borrower decides to grant a power of attorney, authorizing a family member to appear at closing and consummate the transaction on the borrower's behalf. If the lender provides a revised Loan Estimate reflecting the fee to _____ the power of attorney, the actual charges will be compared to the revised charges to determine if the fees comply with good faith.

A. Increase B. Record

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Approved Changed Circumstances: Interest Rate Lock Changes: If the interest rate is NOT locked when the INITIAL Loan Estimate is provided but is subsequently LOCKED, the lender must provide a REVISED Loan Estimate NO later than _____ business days (Business Day Rule) after the DATE the interest rate is ______. The revised Loan Estimate must DISCLOSE the revised interest rate, origination and discount points, lender credits, and any other interest rate-dependent charges and terms. Good faith will be ANALYZED by comparing the interest rate and fees at consummation with those disclosed on the revised Loan Estimate.

A. 3 B. LOCKED

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Approved Changed Circumstances: Expiration of Initial Loan Estimate: If the borrower does not indicate an intent to proceed with the transaction within _____ business davs (Business Day Rule) after the Loan Estimate and other early disclosures are initially provided, those disclosures may be considered to be expired. In good faith, a lender may issue a revised Loan Estimate and may use the revised estimate of a _____ instead of the amount originally disclosed

A. 10 B. Fee/Charge

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Approved Changed Circumstances: When a revised Loan Estimate is provided due to the expiration of the original, the lender can justify the reason for the revision due to the expiration of the ____ business days. The ONLY exception to this explanation is if the lender established a longer time period by some action. For example, if an interest rate is locked for a specific period of time, which is in excess of the _____ business days, the lock expiration date (or any subsequent extensions) will be the expiration date for the borrower to indicate an intent to proceed. Any revised disclosures issued prior to that expiration date will NOT be effective in _____ tolerances for good faith purposes.

A. 10 B. 10 C. Resetting

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Approved Changed Circumstances: Construction Loan Settlement Delays: It is not unusual for there to be long delays in consummating a loan to purchase a home under construction or yet to be constructed. Lenders may use a revised Loan Estimate where the transaction involves financing of new construction and the lender reasonably expects that settlement will occur more than _____ calendar days after the initial Loan Estimate. Lenders may use revised Loan Estimates in this circumstance only when the initial Loan Estimate clearly and conspicuously stated that at any time prior to ____ days before consummation, the creditor may issue revised disclosures.

A. 60 B. 60

Federal Disclosure Laws: The Loan Estimate: Revised Loan Estimate Delivery Time Requirement: A REVISED Loan Estimate must: • Be delivered or placed in the mail within three business days (Business Day Rule) of the changed circumstance and at least ______ business days (_____ Precise Business Day Rule) prior to CONSUMMATION. • NOT be issued once the Closing Disclosure has been ______.

A. Four B. More C. Delivered

Federal Disclosure Laws: The Loan Estimate: Fee Collection Compliance: The collection of fees is closely tied to providing an initial application disclosure to a mortgage loan applicant. Regulation Z PROHIBITS the imposition of a ____ until federal disclosure requirements are MET and a DOCUMENTED intent to ______ is provided by the applicant. After federal disclosure requirements are met, intent to proceed can be satisfied by: • Oral communication over the phone, • Written communication via email, or • Signing a pre-printed form. Note that a fee is "______" a person if the person requires a consumer to provide a method for payment, even if payment is not made at that time. It is NOT a violation of Regulation Z for an applicant to provide a _____ number before receiving required disclosures and communicating an intent to proceed provided that the applicant's authorization is only to pay for the cost of a credit report and the only charge made is a reasonable and _____ fee for obtaining the consumer's credit report.

A. Proceed B. Imposed By C. Credit Card D. Bona Fide

Federal Disclosure Laws: The Loan Estimate: Verification Documentation Request Compliance: When a lender is allowed to require mortgage loan applicants to provide verification documents is also closely tied to providing initial application disclosures to a mortgage loan applicant. A lender MAY COLLECT from the consumer any INFORMATION that it requires _____ or the _____ time as collecting application information. It is a violation to require that the consumer submit documentation to VERIFY the information collected BEFORE providing a _______ and other required federal application disclosures. For example, before you provide the Loan Estimate and other required federal application disclosures: • You may ask for the sale price and address of the property but you may NOT require the consumer to provide a purchase and sales agreement to support the information provided _____. • You may ask for the names, account numbers, and balances of the consumer's checking and savings accounts but you may NOT require the consumer to provide ____ statements or similar documentation to support the information provided.

A. Before B. Same C. Loan Estimate D. Orally E. Bank

Federal Disclosure Laws: The Loan Estimate: E-Sign Consent Compliance: Recall, lenders must comply with the requirements of the ____ Act to exchange required disclosures electronically. Prior to obtaining a consumer's consent to exchange records through an electronic method, financial institutions, including lenders, must provide the consumer a CLEAR and CONSPICUOUS statement informing the consumer: • Of any right or option to have the record provided or made available on _____ or in a non-electronic form, and the right to ______ consent. • Whether the consent applies only to the particular transaction or _______ of records that may be provided during the involved parties' relationship. • About the _____ the consumer must use to WITHDRAW consent and to update electronic contact information. • How to request a ____ copy of a record and whether any FEE will be charged for that copy. • Of HARDWARE and SOFTWARE requirements for access to and retention of electronic records. Whether the consumer consents electronically or confirms consent electronically, it must be in a manner that REASONABLY demonstrates the consumer CAN access information in the electronic form that will be used by the lender. Consent provided through oral communications or a recording of oral communication will NEVER qualify as providing consent or demonstrating that records can be accessed in the electronic form that will be used.

A. E-Sign Act B. Paper C. Withdraw D. Categories E. Procedures F. Paper

Federal Disclosure Laws: Other Initial Application Disclosures: Not later than THREE business days ( _______ Day Rule) after a lender receives an application or information sufficient to complete an application, the lender must provide the loan applicant with a CLEAR and CONSPICUOUS written list of homeownership ______ organizations that provide relevant counseling services in the loan applicant's ______.

A. Business B. Counseling C. Location

Federal Disclosure Laws: Other Initial Application Disclosures: The list of _______ counseling organizations distributed to each loan applicant under this section must be obtained NO earlier than _____ days prior to the time when the list is provided to the loan applicant from: • The website maintained by the Bureau for lenders to use in complying with the requirements of this section; OR • Data made available by the Bureau or HUD for lenders to use in complying with the requirements of this section provided that the data is used in accordance with the instructions provided with the data. The lender is NOT REQUIRED to provide the list of homeownership counseling organizations required under this section if, before the end of the THREE business day period, the lender DENIES the application or the loan applicant WITHDRAWS the application. NOTE: See Regulation X, The list of homeownership counseling organizations provided under this section may be ______ and provided with other mortgage loan disclosures required pursuant to Regulation Z, or this part unless prohibited by Regulation Z or this part. (TILA)

A. Homeownership B. Combined

Federal Disclosure Laws: Other Initial Application Disclosures: HUD Initial Application Disclosures Interpretative Rules: The Consumer Financial Protection Bureau issued interpretive rules regarding the provision of lists of HUD-approved housing counseling agencies to mortgage loan applicants. These rules interpret §1024.20(a)(1) of Regulation X, as adopted by the RESPA Homeownership Counseling Amendments, this describes those data instructions: ________ - Regulation X requires lenders to provide a written list of homeownership counseling organizations. Consistent with Regulation X lenders comply with this requirement when they provide a list of ____ HUD-approved housing counseling agencies. The tool maintained by the Bureau will generate a list of 10 HUD-approved housing counseling agencies. Listing 10 housing counseling agencies ensures fairness and equity among housing counseling agencies by offering loan applicants a thorough and diverse list of counseling options.

A. Number of Homeownership Counselors to Appear on List B. 10

Federal Disclosure Laws: Other Initial Application Disclosures: HUD Initial Application Disclosures Interpretative Rules: The Consumer Financial Protection Bureau issued interpretive rules regarding the provision of lists of HUD-approved housing counseling agencies to mortgage loan applicants. These rules interpret of Regulation X, as adopted by the RESPA Homeownership Counseling Amendments, this describes those data instructions: ___________ - Regulation X requires lenders to provide a written list of homeownership counseling organizations in the loan applicant's location. As the Bureau discussed in the RESPA Homeownership Counseling Amendments, lenders comply with when they use the loan applicant's five-digit _____ to generate a list of the 10 closest HUD-approved housing counseling agencies to the centroid of the zip code of the loan applicant's current address, in descending order of proximity to the centroid. Lenders are also permitted to generate the list from a more precise geographic marker, such as a street address. The loan applicant's current zip code SATISFIES the requirement that the homeownership counseling organizations be in the loan applicant's location.

A. Location by Zip Code B. Zip Code

Federal Disclosure Laws: Other Initial Application Disclosures: HUD Initial Application Disclosures Interpretative Rules: The Consumer Financial Protection Bureau issued interpretive rules regarding the provision of lists of HUD-approved housing counseling agencies to mortgage loan applicants. These rules interpret §1024.20(a)(1) of Regulation X, as adopted by the RESPA Homeownership Counseling Amendments, this describes those data instructions: _________ - Regulation X requires lenders to provide a written list of homeownership counseling organizations that provide relevant services in the loan applicant's location. Consistent with lenders comply when they provide the following data fields for each housing counseling agency on the list to the extent that they are available through the HUD _____: Agency name, phone number, street address, street address continued, city, state, zip code, Web site URL, email address, counseling services provided, and languages spoken. Providing a street address is PREFERABLE to providing a mailing address, as available. The tool maintained by the Bureau will provide these data fields to the extent that they are available through the HUD API. A lender-generated list under complies with Regulation X when these DATA fields are provided to the _____ that they are available through the HUD API.

A. Homeownership Counselor Contact Information B. API C. Extent

Federal Disclosure Laws: Other Initial Application Disclosures: HUD Initial Application Disclosures Interpretative Rules: ________ - Lenders comply with Regulation X when the following ______ is included: "The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development (HUD), and they can offer INDEPENDENT advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at LITTLE or NO cost to you. This list shows you several approved agencies in your area. You can find other approved counseling agencies at the Consumer Financial Protection Bureau's (CFPB) Website.

A. Accompanying Information B. Language

Federal Disclosure Laws: Other Initial Application Disclosures: Provider: A mortgage BROKED or DEALER may PROVIDE the list of homeownership counseling organizations required under this section to any loan applicant from whom it receives or for whom it prepares an application. If the mortgage broker or dealer has provided the required list of homeownership counseling organizations, the _____ is not required to provide an additional list. Caution: The lender is responsible for ensuring that the list of homeownership counseling organizations is provided to a loan applicant in accordance with this section. NOTE: If the lender, mortgage broker, or dealer does NOT provide the list of homeownership counseling organizations required under this section to the loan applicant in person, the lender MUST mail or deliver the list to the loan applicant by other means. The list may be provided in electronic form, subject to compliance with the consumer consent and other applicable provisions of the _____.

A. Lender B. Electronic Signatures in Global and National Commerce Act (E-Sign Act)

Federal Disclosure Laws: Other Initial Application Disclosures: Multiple Lenders: If a mortgage loan transaction involves more than one lender, only _____ list of homeownership counseling organizations required under this section shall be given to the loan applicant and the lenders must agree among themselves which lender will comply with the requirements that this section imposes on any or all of them. If there is more than one loan applicant, the required list of homeownership counseling organizations may be provided to any loan applicant with primary liability on the mortgage loan obligation.

A. One

Federal Disclosure Laws: Other Initial Application Disclosures: Written List of Settlement Service Providers Regulations: When a borrower is permitted to shop for a settlement service (listed in Loan Estimate Section C, Services You Can Shop For), Regulation Z requires the lender to PROVIDE the borrower with a Written List of ______ Service Providers that: 1. Identifies at least _____ available provider for each type of settlement service that can be shopped for. The providers identified MUST: • _______ perform the services sought where the property is located. • Correspond to the required settlement services for which the consumer MAY shop as listed on the Loan Estimate. • Include ______ information to contact each provider, such as the name under which the provider does business and the provider's address and telephone number. 2. State that the consumer MAY choose a ______ provider for that service.

A. Settlement B. One C. Currently D. Sufficient E. Different

Federal Disclosure Laws: Other Initial Application Disclosures: Written List of Settlement Service Providers Regulations: Additionally, on the Written List of Settlement Service Providers, the lender may: • Include a statement that the listing of a settlement service provider does not constitute an endorsement of that service provider. • List all service providers on the written list of providers but clearly identify those settlement services for which consumers are permitted to shop. • Include affiliates on the written list. • Not list provider fees. The Written List of Settlement Service Providers must be provided: • Within _____ business days after a complete application. • ______ from the Loan Estimate.

Three Separately

Federal Disclosure Laws: Other Initial Application Disclosures: Written List of Settlement Service Providers Regulations: In the Appendix of Regulation Z, you can find a MODEL form and samples. ______ that use these model forms are deemed to be in _______ with Regulation Z specific to providing the Written List of Settlement Service Providers, which creates a safe harbor for the lender.

A. Lenders B. Compliance

Federal Disclosure Laws: Other Initial Application Disclosures: Written List of Settlement Service Providers Regulations: Changes in the format or content of these _____ forms will still be deemed to be in compliance so long as the changes ______ affect the substance, clarity, or meaningful sequence of the MODEL form. A completed copy of the appropriate form in the borrower's loan file will provide evidence that a lender complied with TILA's requirement to provide the Written List of Settlement Service Providers to a borrower by the date REQUIRED and with the REQUIRED content. TILA requires that this documentation be maintained as evidence of compliance for _____ years after the latest of the date of CONSUMMATION, the date disclosures are required to be MADE, or the date the ACTION is required to be taken.

A. MODEL B. DO NOT C. 3

Federal Disclosure Laws: Other Initial Application Disclosures: Affiliated Business Relationship Disclosure: A mortgage lender or broker may own or control any settlement service provider but MUST provide _____ to the consumer of any relationship between the providers. This relationship is called an affiliated business relationship, which is defined by statute as: "An arrangement in which: A. A person who is in a position to REFER business incident to or a part of a real estate settlement service involving a federally-related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than ______% in a provider of settlement services, and B. Either of such persons directly or indirectly REFERS such business to that provider or affirmatively ________ the selection of that provider."

A. Disclosure B. 1% C. Influences

Federal Disclosure Laws: Other Initial Application Disclosures: Affiliated Business Relationship Disclosure: The _______ form must be provided to the consumer at the time of the ______ or ______. The AfBA form provides disclosure to the client of the relationship that exists between two settlement service providers and the estimated charge or range of charges generally made by such provider. Remember the form is provided to the consumer when the MLO is giving a referral, not receiving one. The loan originator may NOT require the use of such a provider identified on the Affiliated Business Arrangement Disclosure form EXCEPT the institution may REQUIRE a buyer, borrower, or seller to pay for the services of an attorney, credit reporting agency, or real estate appraiser chosen by the institution to represent its interest. A sample of an AfBA form can be found in Appendix D of Part 1024. NOTE: If the Loan Estimate, Written List of Settlement Service Providers, and AfBA Disclosure are all given at the SAME TIME, within _____ business days of a complete application, you are sure to comply with the delivery time requirements for each of these three disclosures.

A. Affiliated Business Arrangement Disclosure (AfBA) B. Referral C. Before D. Three

Federal Disclosure Laws: Other Initial Application Disclosures: The Closing Disclosure: For loans that require a Loan Estimate that proceed to the closing, lenders must provide a new final disclosure reflecting the actual terms of the transaction called the ______.

A. Closing Disclosure

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: of the Closing Disclosure when compared with Page 1 of the ______ appears very similar, including loan terms, projected payments, and costs at closing.

A. 1 B. Loan Estimate

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: itemizes and discloses the closing costs paid by the borrower, the seller, or others. Categories of costs are similar to those on the ______, such as Origination Charges, Services Borrower Did Not Shop For, Services Borrower Did Shop For, Prepaids, etc. The columns for the borrower and the seller are divided into two parts: Items paid ______ and items paid _____ closing. NOTE: Closing costs that _______ more than the allowed tolerance for change between the Loan Estimate and Closing Disclosure are a violation of disclosure law.

A. 2 B. Loan Estimate C. At Closing D. Before Closing E. Increase

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: The _____ portion calculates the Cash to Close for the borrower, providing information regarding the amount of closing costs disclosed to the borrower on the Loan Estimate and the Closing Disclosure. The borrower is informed IF there is a change from the Cash to Close amounts that were provided in the Loan Estimate.

A. 3 B. Top Portion

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: The _____ portion of summarizes the transaction details by providing a ____ comparative view of the seller's and borrower's costs at closing. This will include any adjustments that were paid in advance, taxes, assessments, and more. The summary will include the AMOUNT due from the seller, what the seller RECEIVES, and what the borrower OWES and has already PAID.

A. 3 B. Bottom Portion C. Side-by-Side

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: of the Closing Disclosure provides required ______ about the mortgage loan, including disclosures for the following: • ASSUMPTION • DEMAND features • LATE payment • Negative AMORTIZATION • PARTIAL payments • SECURITY interest • ESCROW account

A. 4 B. Disclosures

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: discloses the total amount of the payments and _____ charges that the borrower will make over the life of the loan. Additionally, the TOTAL amount financed, ANNUAL percentage rate, and total INTEREST percentage are disclosed.

A. 5 B. Payments C. Finance

Federal Disclosure Laws: The Closing Disclosure: Some of the same fields in the Loan Estimate are also located in the Closing Disclosure. Some notable information contained in the Closing Disclosure includes: Page ___: also provides information associated with the borrower's home, including APPRAISALS, CONTRACT details, TAX deductions, and REFINANCE information and CONTACT information for the LENDER, mortgage BROKED, real estate AGENT, and the SETTLEMENT agent. NOTE: Keep in mind that the use of the Loan Estimate and the Closing Disclosure for federally-regulated mortgages are ____ and the forms may NOT be altered.

A. 5 B. Mandatory

Federal Disclosure Laws: The Closing Disclosure: The Closing Disclosure Delivery Time Requirement: The INITIAL Closing Disclosure must be received by the borrower at least three business days ( ______ Business Day Rule) before loan _______ and contain the actual terms and costs of the transaction. • The three-business-day waiting period begins ______ if delivered in person. • If mailed or delivered electronically, the waiting period begins three business days after it is delivered or PLACED in the mail ( ______ Business Day Rule); 3 business days for delivery + 3 business days before loan consummation = ____ total business days. If it can be documented that the borrower received the Closing Disclosure prior to the expiration of the three-business-day delivery period, the count can _____ for the three-business-day waiting period before loan consummation.

A. More Precise B. Consummation C. Immediately D. More Precise E. 6 F. Begin

Federal Disclosure Laws: The Closing Disclosure: The Closing Disclosure Delivery Time Requirement: If a _____ personal financial emergency exists, the borrower may ____ or _____ the waiting period by giving the lender a written statement making the waiver request and DESCRIBING the emergency. The borrower requesting any type of waiver of the three-business-day waiting period must sign a ______ statement along with any other primary obligors.

A. Bona Fide B. Shorten or Waive C. Handwritten

Federal Disclosure Laws: The Closing Disclosure: Responsibility of Delivery: The ______ is responsible for providing the Closing Disclosure to the ______ and ensuring that the content, delivery, and timing requirements set by federal law are met. The _______ agent is responsible for providing the seller with the Closing Disclosure that discloses the actual terms of the transaction to the seller.

A. LENDER B. Borrower C. SETTLEMENT

Federal Disclosure Laws: The Closing Disclosure: Responsibility of Delivery: The settlement agent may provide a copy of the borrower's Closing Disclosure to the _____ if the terms of the seller's transaction are shown on the buyer's form. If the settlement agent provides the seller a form that _____ from the buyer's form, then the settlement agent is REQUIRED to provide a copy of the seller's ______ to the creditor.

A. Seller B. Differs C. Form

Federal Disclosure Laws: The Closing Disclosure: Responsibility of Delivery: Lenders can _____ responsibility for the completion and accuracy of the Closing Disclosure with the settlement agent. The settlement agent can complete part or all of the disclosure and deliver it to the borrower and seller. Understand, however, even if the Closing Disclosure is prepared and delivered by the settlement agent, the LENDER still maintains the _____ responsibility for the accuracy and delivery of the disclosure.

A. Share B. Legal

Federal Disclosure Laws: The Closing Disclosure: Responsibility of Delivery With Multiple Borrowers and Timeshare Transaction: If there are multiple borrowers in a transaction that is _____ under the Truth in Lending Act, the Closing Disclosure must be delivered to each borrower who has the right to rescind the transaction. If the transaction is not rescindable, the Closing Disclosure may be provided to ANY with primary liability for the loan. With a _____ transaction, the creditor must ensure that the Closing Disclosure is received by the consumer on the ____ of loan consummation.

A. Rescindable B. Consumer C. TIMESHARE D. Day

Federal Disclosure Laws: The Closing Disclosure: Final and Revised Closing Disclosure Regulations: At loan _____, the final Closing Disclosure provided to the borrower MUST show the actual terms and charges associated with the loan transaction.

A. Consummation

Federal Disclosure Laws: The Closing Disclosure: Final and Revised Closing Disclosure Regulations: If the Closing Disclosure becomes inaccurate between the time of initial disclosure and the time of consummation, a ______ Closing Disclosure must be provided by the lender to the borrower.

A. Revised

Federal Disclosure Laws: The Closing Disclosure: Final and Revised Closing Disclosure Regulations: Most changes will not require a REVISED Closing Disclosure or a new three-business-day waiting period before consummation; however, a ____ three-business-day ( ______Business Day Rule) waiting period will be REQUIRED for the following types of changes: 1. There are changes to the ____ product. 2. A ______ penalty is added. 3. There are changes to the loan's APR outside accepted _____ on a closed-end loan: • REGULAR transaction (generally, a fixed-rate loan): an APR change of +/- _____% • IRREGULAR transaction (generally, an adjustable-rate loan): APR change of +/- _______%

A. New B. More Precise C. Loan D. Pre-Payment E. Tolerances F. +/- 0.125% (1/8%) G. +/- 0.250% (1/4%)

Federal Disclosure Laws: The Closing Disclosure: Corrections After Closing Consummation Regulations: ________ consummation, certain events will require that the LENDER provide a _____ Closing Disclosure to the borrower and that the settlement agent provide a corrected Closing Disclosure to the seller: 1. Any event after consummation that impacts settlement _____. If during the 30-day period following consummation, an event in connection with the settlement of the transaction occurs that causes the Closing Disclosure to become inaccurate and such inaccuracy results in a change to an amount actually paid by the borrower or seller, the revised Closing Disclosure must be delivered or placed in the mail not later than _______ calendar days after receiving information sufficient to establish that such event has occurred. 2. Changes due to clerical errors. If it is discovered that the Closing Disclosure contains a ______ clerical error, a revised Closing Disclosure is to be delivered or placed in the mail NO later than ____ calendar days after consummation. 3. Refunds related to the good faith analysis. If amounts paid by the consumer EXCEED the amounts allowed under the tolerance for change restrictions, a revised Closing Disclosure and a refund are to be delivered or placed in the mail no later than ____ calendar days after consummation. Recall, a calendar day is any day on the calendar. So, for example, assume consummation occurs on a Monday and the security instrument is recorded on Tuesday, the day after consummation. If the creditor learns on Tuesday that the fee charged by the recorder's office differs from that previously disclosed and the changed fee results in a change in the amount actually paid by the consumer, the lender must deliver or place the revised disclosure in the mail no later than _____ days after Tuesday.

A. AFTER B. Corrected C. Charges D. 30 E. Non-Numeric F. 60 G. 60 H. 30

Federal Disclosure Laws: Good Faith Estimate Compliance: Historically, examiners discover disclosure compliance ISSUES specific to the RECORDING of closing costs on the Loan Estimate and Closing Disclosure. MLOs need to be aware of the need for a good faith estimate of all closing costs on page 2 of the _____ and the subsequently allowed TOLERANCES for change when compared to page 2 of the _______.

A. Loan Estimate B. Closing Disclosure

Federal Disclosure Laws: Good Faith Estimate Compliance: Loan Costs: Sections A, B, and C Final or Revised Closing Disclosure Regulations: Staying in compliance with the recording of loan costs and tolerances for change starts with understanding what charges go in the Loan Cost section of the Loan Estimate under each of these three subheadings: • Section ___: Origination Charges: Origination Charges, listed in this Section, are those charges paid by the consumer to EACH creditor and loan originator for originating and extending the credit. Examples of items that are listed in Section A include the application fee, origination fee, underwriting fee, processing fee, verification fee, and rate-lock fee.

A. Section A

Federal Disclosure Laws: Good Faith Estimate Compliance: Loan Costs: Sections A, B, and C Final or Revised Closing Disclosure Regulations: • Section ____: Services You CANNOT Shop For: Services You Cannot Shop For are items provided by persons other than the lender or mortgage broker that the consumer cannot shop for and will pay for at settlement. Examples of items that are listed in this Section include appraisal fee, appraisal management company fee, credit report fee, flood determination fee, government funding fee, homeowner's association certification fee, lender's attorney fee, tax status search fee, third-party subordination fee, Title-closing protection letter fee, Title-lender's title insurance policy, and upfront mortgage insurance fee (unless the fee is a prepayment of future premiums or a payment into an escrow account). The number of items disclosed under the subheading "Services You Cannot Shop For" MUST NOT EXCEED ____.

A. Section B B. 13

Federal Disclosure Laws: Good Faith Estimate Compliance: Loan Costs: Sections A, B, and C Final or Revised Closing Disclosure Regulations: • Section ____: Services You CAN Shop For: Services You Can Shop For are items provided by persons other than the lender or mortgage broker that the consumer can shop for and will pay for at settlement. Examples of items that are listed in this Section include architectural/engineering fee, attorney fee, pest inspection fee, survey fee, Title-abstract fee, Title-borrower's title insurance policy, and Title-settlement agent fee. The number of items disclosed under the subheading "Services You Can Shop For" MUST NOT EXCEED ____.

A. Section C B. 14

A. ZERO

A. UNLIMITED

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance for Change: Tolerance for Change Categories of Loan costs listed on the Loan Estimate when compared to the same costs disclosed on the Closing Disclosure will fall into one of three allowed tolerances for change buckets: ______ tolerance: A limited increase above what was disclosed in the Loan Estimate is permitted. These increased costs are deemed to be in good faith if the sum of all costs paid by or imposed on the consumer does not EXCEED the sum of all such costs (for costs in this bucket) disclosed on the Loan Estimate by more than ____%. For example, assume that the lender includes a $500 estimated fee for a title search on the Loan Estimate and the sum of all charges on the Loan Estimate subject to the 10% tolerance (including the title search fee) equals $1,000. If the actual title search fee at loan consummation (and on the Closing Disclosure) is $575 (which is a ____% increase of the individual charge) and all other charges subject to the 10% tolerance REMAIN the same, the title search fee ____ meet good faith requirements.

A. Limited B. 10% C. 15% D. Will

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance for Change: Zero Tolerance for Change per Regulation Z states that an estimated closing cost disclosed in the Loan Estimate is in good faith if the amount on the Closing Disclosure that is paid by the borrower does NOT EXCEED the amount originally disclosed for the following: • Fees paid to the CREDITOR • Fees paid to a mortgage BROKER • Fees paid to an AFFILIATE of the creditor or mortgage broker • Fees paid to an UNAFFILIATED third party if the creditor DID NOT permit the consumer to shop More specifically, Loan Costs listed on Page ____ of the Loan Estimate and Closing Disclosure with zero tolerance for change, include: • Section _____: Origination Charges • Section _____: Services You Cannot (Did Not) Shop For

A. Page 2 B. Section A C. Section B

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance for Change: Section _____: Tolerance for Change For services a consumer can shop for that are found in this Section of the Loan Estimate, one question needs to be answered to determine where these fees go in the Closing Disclosure and the tolerance for change.

A. Section C Tolerance For Change

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance for Change: Question: For services a consumer can shop for listed in Section C of the Loan Estimate, did the borrower select a provider on the Written List of Settlement Service Providers or go with the lender default? If the answer is: Yes, the borrower DID select provider on list or go with lender default. • The fee goes in Closing Disclosure Section ____ - Services Borrower Did Not Shop For. If the default provider or provider selected from the list: a. Is an affiliate = ____ tolerance for change. b. Is not an affiliate = _____ tolerance for change. IMPORTANT: When a borrower can shop for a provider and chooses a provider on the list or goes with the lender default, this is considered NOT shopping and goes in Closing Disclosure Section ____.

A. Section B B. Zero C. 10% Aggregate D. Section B

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance for Change: Question: For services a consumer can shop for listed in Section C of the Loan Estimate, did the borrower select a provider on the Written List of Settlement Service Providers or go with the lender default? If the answer is: No, the borrower did NOT select provider on list or go with lender default (the borrower shopped for and selected a provider not on the list). • The fee goes in Closing Disclosure Section ____: Services Borrower DID Shop For: • Because the provider selected is NOT on the list, there is an _____ tolerance for change if the FEE on both disclosures is BONA FIDE.

A. Section C B. Unlimited

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance for Change: As a caution, understand that when lenders fail to provide a Written List of Settlement Service Providers as required, they lose the benefit of the unlimited tolerance if the consumer does shop, resulting in service charges reverting to: • ______ tolerance when the provider selected by the borrower is unaffiliated, and • ______ tolerance if the provider selected by the borrower is affiliated with the lender.

A. LIMITED B. ZERO

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Loan Costs: Tolerance For Change: Question? Assume Borrower Brad receives a Loan Estimate from ABC Lending that lists a title charge in Section C, Services You Can Shop For. ABC fails to provide Borrower Brad with the required Written List of Settlement Service Providers for that service charge. • If Borrower Brad shops and chooses a service provider _____ with ABC, the charge reverts from an unlimited tolerance to a ZERO tolerance. This situation is NOT common. • If Borrower Brad shops and chooses a service provider _____ with the lender, the charge reverts from an unlimited tolerance to the _____ tolerance. This situation is MORE common.

A. Affiliated B. Unaffiliated C. 10% Aggregated Limited

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: Section E, F, G, H, and J make up Other Costs provided in the Loan Estimate and Closing Disclosure on page ____. There are different tolerances for change for items that are recorded in these sections.

A. 2

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: ______ Tolerance: Transfer Tax There is zero tolerance for changes to the _____ fee identified in the Loan Estimate. A transfer tax is a fee imposed by the state and municipality where the property is located when there is a transfer of title to property from one entity to another entity. Transfer taxes are generally based on the sale price of the property and do NOT change UNLESS the sale ______ changes or, in rare instances, when the state or municipality amends its laws to do so. Lenders are expected to know the exact amount of this tax as provided in the LOAN ESTIMATE, Section ___.

A. ZERO B. Transfer Tax C. Price D. Section E

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: ______ Tolerance: _____ Credits These credits may be categorized as: • _______ such as credits or rebates from the lender to the borrower that DO NOT pay for a PARTICULAR fee. • _______ such as reimbursement from a lender to the borrower to pay for a specific FEE.

A. ZERO B. Lender C. Non-Specific D. Specific

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: ______ Tolerance: Although not technically considered a closing "cost" or settlement "charge" because they are credits to borrowers, lender credits are required to be disclosed in Section ____ of the LOAN ESTIMATE. Lender credits are deemed negative _____ to the borrower. Any ______ in CREDITS at the time of consummation from what was estimated on the Loan Estimate will be considered an INCREASED _____ to the borrower for purposes of determining good faith. Lenders are _______ to INCREASE lender credits since doing so does NOT increase the amount paid by the consumer.

A. ZERO B. Section J C. Charges D. Reduction D. Charge E. ALLOWED

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: ZERO Tolerance: Consider these examples of the impact increasing or decreasing lender credits has on an acceptable or unacceptable tolerance of change: • If the lender _____ a $650 estimate for lender credits on the Loan Estimate but gives a ______ amount of $500 for lender credits at consummation, the lender is _____ acting in good faith since the net result is a $150 increase in closing costs. The change will be a tolerance _____. • If the creditor discloses a $600 estimate for lender credits to cover a $600 appraisal fee but the actual fee is $100 higher so the lender increases the amount for lender credits by $100 to pay for the increase, the lender is acting in good faith. • If the creditor discloses the same $600 estimate for lender credits to specifically cover the cost of a $600 appraisal fee but ______ the credit by $100 because the actual appraisal fee ______ by $100, it will be a considered a tolerance ______.

A. Discloses B. Lesser C. NOT D. Violation E. Reduces F. Decreased G. Violation

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: When zero tolerance applies to a fee, the consumer must always be given the _____ of any change in fees and charges to comply with TILA's good faith requirements regarding fee disclosure.

A. Benefit

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: UNLIMITED Tolerance: Regulation Z permits an unlimited _____ above what was disclosed on the Loan Estimate for certain charges. Those increased charges are deemed to be in good faith only if the amounts estimated are consistent with the BEST INFORMATION reasonably available to the lender at the time the disclosures are provided.

Increase

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: Specifically, charges with unlimited tolerance for change include the following: • PRE-PAID interest (Section ____) • PRE-PAID property insurance premiums (Section ____) • PRE-PAID property taxes (Section ____) • Amounts placed into an ESCROW, impound, reserve, or similar account (Section ____) • Other charges paid for third-party services NOT REQUIRED by the lender (Section ____)

Section F Section F Section F Section F Section G Section H

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: In determining whether the estimate of charges was based on the best information reasonably available to the lender at the time the ______ was provided, it must be ascertained through due diligence that the lender was acting in good faith.

A. Disclosure

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: Even if a particular service is NOT REQUIRED by the lender, once informed that the borrower will be utilizing the service or that the service is required in the property's jurisdiction, the lender MUST ________ such service and a reasonable estimate of the cost on the Loan Estimate. The failure to do so or the use of an unreasonably low estimate will subject the lender to the zero tolerance good faith standard. For example: • If the lender requires homeowner's insurance but fails to include a homeowner's insurance premium on the Loan Estimate, the failure to disclose is not considered to be in good faith. There is no justification for this failure. • Similarly, if informed that the borrower will be obtaining a pest inspection or that an attorney customarily represents the borrower in the property state, the FAILURE to include an estimate for such services will be considered a _____ of good faith. • If, however, the lender anticipates closing on the 20th day of the month based on the information reasonably available and calculates estimated _____ interest accordingly but the loan actually closes on the 30th day of the month, the _____ charge at closing is considered to be made in good faith.

A. Disclose B. Violation C. Pre-Paid D. Increased

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: LIMITED Tolerance: ______ Fees found in Section ___ can be included in the bucket of fees that allow for a _____ tolerance for change. Recording fees are not charges for third-party services but are fees paid to a government entity where the documents related to the mortgage transaction are _____.

A. Recording B. E C. 10% Aggregate Limited D. Recorded

Federal Disclosure Laws: Good Faith Estimate Compliance: Final or Revised Closing Disclosure Regulations Other Costs: Tolerance for Change: LIMITED Tolerance: Recording Fees found in Section _____ are generally calculated based on the number of ____ and ____ of documents that are being recorded. Since it is often necessary for additional documents to be recorded between the time the Loan Estimate is provided and consummation, ______ increases in recording fees are EXPECTED and PERMITTED.

A. Section E B. Pages C. Types D. Limited

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: Under Regulation Z consumers have the right to rescind certain credit transactions. ______ means to take back or withdraw an offer or contract. The right of rescission, as discussed in these sections of Regulation Z, applies to any credit transaction involving the establishment of a security interest (for example, a mortgage or deed of trust) in their ______, such as: • Home EQUITY loans • Home IMPROVEMENT loans • REFINANCES • Home equity LINES OF CREDIT NOTE: There are additional rescission rights associated with HIGH-cost and HIGHER-priced loans.

A. Rescind B. Principal Residence

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: This right of rescission does _____ apply to the following: • PURCHASE loans (which protect sellers who may have entered into another contract or purchased a home CONTINGENT on the buyers purchasing their PRESENT home) • CONSTRUCTION loans (which protect builders who may have performed services based on the buyer's commitment) • COMMERCIAL loans • Loans on VACATION or SECOND homes • REFINANCING or CONSOLIDATION by the SAME creditor of an extension of credit already secured by the consumer's _____ dwelling UNLESS the new amount financed EXCEEDS the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the transaction • Transactions in which a state ______ is a creditor

A. NOT B. Principal C. Agency

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: • When more than one consumer has the right to rescind, the exercise of the right by one consumer is effective for ____ consumers. • If a consumer chooses to exercise the right to rescind, the mortgage is void and the creditor must return any money collected related to the loan within _____ calendar days. The consumer has NO liability for the loan, including finance charges. • Consumers may exercise the right to rescind the credit transaction until _____ of the third business day ( ______ Business Day Rule) following loan consummation, delivery of the required rescission notice, or DELIVERY of all material disclosures, whichever occurs ____. NOTE: For the purposes of rescission, the term consumer is expanded to include any "natural person in whose principal dwelling a security interest is or will be retained or acquired, if that person's ownership interest in the dwelling is or will be subject to the security interest"

A. ALL B. 20 Calendar Days C. Midnight D. More Precise E. Last

Case in Point: Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission Compliance: Loan papers for a refinance are signed on Wednesday. The consumer can consider the paperwork and disclosures and decide if she will proceed with the mortgage closing on Thursday (Day 1), Friday (Day 2), and Saturday (Day 3). Under Regulation Z's provisions for rescission, _____ are INCLUDED in the RESCISSION period, but Sundays and federal holidays are not included in the three-business-day calculation. The mortgage can be recorded and money disbursed the next business day, Monday (assuming Monday is not a legal federal holiday).

A. Saturdays

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: Consumers may have the right to an extended rescission period of up to _____years under these circumstances: • The creditor FAILS to properly notify consumers of the right to _______. • The creditor does NOT provide the consumer with the required material disclosures (or the required corrected ________). ________ refers to the annual percentage rate, finance charge, amount financed, total payments, or payment schedule within the acceptable tolerances.

A. 3 B. Rescind C. Redisclosures D. Material

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: Notice of Right to Rescind: Creditors must inform consumers of their right to rescind by providing ____ copies of a _____ document to EACH ______ entitled to rescind. The Notice of Right to Rescind must be in a SEPARATE document from the sale or credit document, and MUST identify the transaction or occurrence and CONSPICUOUSLY disclose the following: • RETENTION or ACQUISITION of a security interest in the consumer's principal dwelling • Consumer's right to RESCIND • How to _____ the right of rescission, including providing a form that designates the ADDRESS of the creditor's place of business • EFFECTS of rescission • Date on which the rescission period _____

A. Two B. Notice of Right to Rescind C. Consumer D. Exercise E. ENDS

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: Additional Rescission Considerations for Foreclosures: After the ______on the consumer's principal dwelling that secures the credit obligation. The consumer must have the right to rescind the transaction if: • A mortgage _____ fee that should have been included in the finance charge was not included. • The creditor did NOT _____ the properly completed Notice of Rescission.

A. Initiation of Foreclosure B. Broker C. Provide

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Right of Rescission: Additional Rescission Considerations for Foreclosures: After the _____ on the consumer's principal dwelling that secures the credit obligation, the finance charge and other disclosures affected by the finance charge (such as the amount financed and the annual percentage rate) shall be considered accurate if the disclosed finance charge is: • Understated by no more than $______; or • Greater than the amount _____ to be disclosed.

A. Initiation of Foreclosure B. $35 C. Required

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Homeowner’s Protection Act (HPA) PMI Disclosures: PMI Cancellation Disclosures: Recall, the _______ Act of 1998 (HPA) requires lenders to _____ PMI when specific requirements have been met. This Act requires lenders or servicers to provide certain disclosures and notifications to ensure borrowers are informed of PMI cancellation requirements and processes. NOTE: Most provisions of the Act do not apply to home loans made before July 29, 1999. The HPA does NOT cover loans that do NOT have private mortgage insurance or loans secured by SECOND or MULTI-family homes. It also does NOT apply to loans insured or guaranteed by the ________ or the ________.

A. Homeowners Protection Act of 1998 (HPA) B. Cancel C. Federal Housing Administration (FHA) D. Department of Veterans Affairs (VA)

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Homeowner’s Protection Act (HPA) PMI Disclosures: PMI Disclosure Requirements: The HPA requires that lenders provide an INITIAL written _____ regarding PMI ______- and _____ reminders of this right- to residential mortgage borrowers. At the time at which the transaction is _____, the following must be disclosed to the borrower: 1. The borrower's right to request CANCELLATION of PMI when a mortgage has been paid down to ____% of its original APPRAISED value or PURCHASE price, whichever is _____. Additionally, a borrower requesting PMI cancellation must have: • A GOOD history of payment, • NOT taken out any OTHER loans on the property, and • Not experienced a DECLINE in the value of the home. 2. The automatic cancellation of PMI by the lender when a mortgage has been paid down to _____% of the home's original value or has attained ____% equity based on the original value, assuming the borrower is NOT DELINQUENT. 3. The borrower's right to ACCELERATE the cancellation date by making additional payments that bring the _____ ratio to 80%. 4. For a fixed-rate mortgage, an initial amortization schedule stating both the cancellation date that the borrower MAY ____ to cancel PMI based on the amortization schedule and the ______ termination date. 5. For an adjustable-rate mortgage, NOTICE that the lender will NOTIFY the borrower when the borrower cancellation date is _____. NOTE: These five disclosure requirements are applicable to borrower-paid PMI. For lender-paid PMI, at loan closing, the lender must provide to the prospective mortgagor a ______ notice that lender-paid mortgage insurance differs from borrower-paid mortgage insurance in that lender-paid mortgage insurance may _____ be cancelled by the borrower or automatically by the lender.

A. Disclosure B. Cancellation C. Annual D. Consummated E. 80% F. Less G. 78% H. 22% I. loan-to-value J. Seek K. Automatic L. Reached M. Written N. NOT

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Homeowner’s Protection Act (HPA) PMI Disclosures: Annual Disclosure: When private mortgage insurance is required in connection with a residential mortgage transaction, the servicer must disclose to the borrower for each such transaction in an ____ statement: • The rights of the borrower under this Act to ______ or ____ of the private mortgage insurance requirement; and • An address and telephone number that the borrower may use to contact the _____ to determine whether the private mortgage insurance can be cancelled.

A. Annual Written B. Cancellation B. Termination D. Servicer

Federal Disclosure Laws: Right of Rescission and PMI Disclosures: Homeowner’s Protection Act (HPA) PMI Disclosures: Cancellation or Termination Notification Requirement: Not later than ____ days after the date of cancellation or termination of private mortgage insurance, the servicer must notify the borrower in writing that: • The private mortgage insurance has _____ and that the borrower NO longer has private mortgage insurance, and • No further premiums, payments, or other fees shall be ____ or ____ by the borrower in connection with the private mortgage insurance.

A. 30 B. Terminated C. Due or Payable

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): There are four sections of RESPA that impact and guide the mortgage industry in protecting borrowers from abuses: Section ___-States a seller cannot require the use of a particular title company Section ___-Provides borrowers with important protections relating to the servicing of their loans. Section ___-Prohibits kickbacks, fee-splitting, and unearned fees Section ___-Identifies the amounts that can be charged to maintain escrow accounts Next, key provisions of these RESPA sections, as implemented by Regulation X, are covered as the provisions impact disclosures to borrowers during all stages of mortgage loan origination and servicing.

A.9 B. 6 C. 8 D. 10

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ___ Mortgage Servicing Transfer Required Disclosure and Notice: Each transferor servicer and transferee servicer of any mortgage loan must provide to the borrower a ______ for any assignment, sale, or transfer of the servicing of the mortgage loan. • The ______ servicer must provide the notice of transfer to the borrower NOT less than ___ days before the EFFECTIVE date of the transfer of the servicing of the mortgage loan. • The ______ servicer must provide the notice of transfer to the borrower not more than ____ days after the EFFECTIVE date of the _____. The transferor and transferee servicers may provide a ______ notice, in which case the notice must be provided NOT less than 15 days before the effective date of the TRANSFER of the servicing of the mortgage loan. NOTE: Notices of transfer provided _____ by the transferor servicer and transferee servicer, whether as separate notices or as a combined notice, satisfy the timing for notice requirements.

A. 6 B. Notice of Transfer C. Transferor D. 15 E. Transferee F. 15 G. Transfer H. Single I. Settlement

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ____ Mortgage Servicing Transfer Required Disclosure and Notice: The notice of transfer may be provided to the borrower by the transferor servicer or the transferee servicer NOT more than ___ days after the EFFECTIVE date of the transfer of the servicing of the mortgage loan in any case in which the transfer of servicing is PRECEDED by: • Termination of the contract for _______ the loan for cause; • Commencement of proceedings for ______ of the servicer; • Commencement of proceedings by the ______ for conservatorship or receivership of the servicer or an entity that owns or controls the servicer; or • Commencement of proceedings by the _____ for appointment of a conservator or liquidating agent of the servicer or an entity that owns or controls the servicer.

A. Section 6 B. 30 Days C. Servicing D. Bankruptcy E. FDIC F. NCUA

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ____ Mortgage Servicing Transfer Required Disclosure and Notice: Transfers EXCLUDED from this notice requirement include: 1. The following transfers are NOT assignments, sales, or transfers of mortgage loan servicing for purposes of this section if there is NO ______ in the payee, address to which payment must be delivered, account number, or amount of payment due: • A transfer between ______ • A transfer that results from _____ or acquisitions of servicers or sub-servicers • A transfer that occurs between _______ servicers without changing the sub-servicer 2. The Federal Housing Administration (FHA) is NOT required to provide to the borrower a notice of transfer where a mortgage insured under the ______ Act is assigned to the FHA.

A. Section 6 B. Change C. Affiliates D. Mergers E. Master F. National Housing Act

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ____ Mortgage Servicing Transfer Required Disclosure and Notice: Handling Payments of Service Transferred Accounts: During the ____-day period beginning on the EFFECTIVE date of transfer of the servicing of any mortgage loan, if the transferor servicer ( _______ the transferee servicer that should properly receive payment on the loan) receives payment on or before the applicable due date (including any ____ period allowed under the mortgage loan instruments), a payment may not be treated as _____ for any purpose.

A. Section 6 B. 60 C. Rather Than D. Grace E. LATE

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ___ Prohibition Against ______: As set forth by Regulation X, NO person must give and NO person must accept any fee, kickback, or other thing of ____ pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a ______ service involving a federally-related mortgage loan shall be referred to any person. Any referral of a settlement service is NOT a _____ service, except as set forth in Regulation X. A company may NOT pay any other company or the emplovees of any other company for the referral of settlement service business.

A. Section 8 B. Kickbacks C. Value D. Settlement E. COMPENSABLE

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ____ Restriction on Split of Charges and Unearned Fees: No person must _____ and no person must _____ any portion, split, or percentage of any _____ made or received for the _____ of a settlement service in connection with a transaction involving a federally-related mortgage loan other than for services actually performed. A charge by a person for which _____ or ______ services are performed or for which duplicative fees are charged is an unearned fee and violates this section. The source of the payment does not determine whether a service is compensable. Nor may the prohibitions of this part BE AVOIDED by creating an arrangement wherein the purchaser of services ______.

A. Section 8 B. Give C. Accept D. Charge E. Rendering F. No or Nominal G. Splits the Fee

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section _____Permissible Payments and Activities: This Section of RESPA permits: • A payment to an _____ at law for services actually rendered. • A payment by a title company to its duly appointed _____ for services actually performed in the issuance of a policy of title insurance. • A payment by a lender to its duly appointed agent or _____ for services actually performed in the origination, processing, or funding of a loan. • A payment to any person of a compensation or other payment for goods or facilities ______ furnished or for services actually performed. • A payment pursuant to cooperative brokerage and ______ or agreements between real estate agents and real estate brokers. (The statutory EXEMPTION restated in this paragraph refers only to fee divisions within real estate brokerage arrangements when ALL parties are acting in a real estate brokerage capacity and have NO applicability to any FEE arrangements between real estate brokers and mortgage brokers or between mortgage brokers.) • Normal ______ and educational activities that are not conditioned on the REFERRAL of business and that do not involve the defraying of expenses that otherwise would be incurred by persons in a position to refer settlement services or business incident thereto. • An employer's payment to its own _______ for any referral activities.

A. Section 8 B. Attorney C. Agent D. Contractor E. Actually F. Referral Arrangements G. Promotional H. Employees

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ___ Allowable Payment of Multiple Services: When a person in a position to refer _______ service business, such as an attorney, mortgage lender, real estate broker or agent, or developer or builder, receives payment for providing additional settlement services as part of a real estate transaction, such payment must be for services that are ACTUAL, NECESSARY, and DISTINCT from the _______ services provided by such person. For example, for an attorney of the buyer or seller to receive compensation as a title agent, the attorney must perform core title agent services (for which liability arises) separate from attorney services, including the evaluation of the title search to determine the insurability of the title, the clearance of underwriting objections, the actual issuance of the policy or policies on behalf of the title insurance company, and, where customary, issuance of the title commitment and the conducting of the title search and closing.

A. Section: 8 B. Settlement C. Primary

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ____ Prohibition on Title Insurance Company Mandate: Section ____ of RESPA PROHIBITS a seller from REQUIRING the homebuyer to use a particular TITLE insurance company, either directly or indirectly, as a ______. Buyers may sue a seller who violates this provision for an amount equal to _____ times ALL charges made for the title insurance.

A. Section 9 B. Condition Of Sale C. Three

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ____ Escrow Accounts: This Section of RESPA sets ______ on the amounts a lender may REQUIRE a borrower to put into an escrow account. Escrow account means any account that a servicer ______ or _______ on behalf of a borrower to pay taxes, insurance premiums (including flood insurance), or other charges with respect to a federally-related mortgage loan, including charges that the borrower and servicer have VOLUNTARILY ____ that the servicer should collect and pay.

A. Section 10 B. Limits C. Establishes or Controls D. Agreed

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section 10 Escrow Accounts: The definition encompasses any account established for this purpose, including a "TRUST account", "RESERVE account", "IMPOUND account", or other term in different localities. An "escrow account" includes any arrangement where the servicer adds a portion of the borrower's payments to the principal and subsequently deducts from the principal the _______ for escrow account items. For purposes of this section, the term "escrow account" excludes any account that is under the borrower's _____ control.

A. Disbursements B. Total

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Escrow Account Payment Limitations: A lender or servicer (hereafter servicer) must not require a borrower to deposit into an escrow account, created in connection with a federally-related mortgage loan, more than the following amounts: A. Charges at _____ or _____ creation of an escrow account. At the time a servicer creates an escrow account for a borrower, the servicer may _____ the borrower an amount sufficient to pay the charges respecting the mortgaged property, such as taxes and insurance, which are attributable to the period from the date such payments) were last paid until the initial payment date. The "_______" is computed so that the ______ month-end target balance projected for the escrow account computation year is _____. In addition, the servicer may CHARGE the borrower a ______ that must be NO greater than _____th of the estimated total _____ payments from the escrow account.

A. Settlement or Upon B. Charge C. Amount Sufficient to Pay D. Lowest E. ZERO F. Cushion G. 1/6th H. Annual

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Escrow Account Payment Limitations: A lender or servicer (hereafter servicer) must NOT require a borrower to deposit into an escrow account, created in connection with a federally-related mortgage loan, more than the following amounts: ________: Throughout the LIFE of an escrow account, the servicer may charge the borrower a monthly sum equal to ______th of the total _______ escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a ______ no greater than _____th of the estimated total annual payments from the account. However, if a servicer determines through an escrow account analysis that there is a ______ or ______, the servicer may require the borrower to pay additional deposits to make up the shortage or eliminate the deficiency, subject to the limitations set forth in this section.

A. Charges DURING the LIFE of the Escrow Account B. 1/12th C. Annual D. Cushion E. 1/6th F. Shortage or Deficiency

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Escrow Analysis at Account Creation: BEFORE establishing an escrow account, the servicer MUST conduct an escrow account _____ to determine the amount the borrower MUST _____ into the escrow account and the amount of the borrower's ________ payments into the escrow account.

A. Analysis B. Deposit C. Periodic

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Escrow Analysis at Account Creation: In conducting the escrow account analysis, the servicer must estimate the disbursement amounts according to this section. Pursuant to this section, the servicer must use a DATE ____ the deadline to avoid a penalty as the disbursement date for the escrow item and comply with any other requirements of this section.

A. On or Before the Deadline

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Escrow Analysis at Account Creation: Upon _______ the INITIAL escrow account analysis, the servicer must prepare and deliver an INITIAL escrow account ______ to the borrower. The servicer must submit an initial escrow account statement to the borrower at settlement or WITHIN ______ days of settlement for escrow accounts that are established as a _______ of the loan.

A. Completing B. Statement C. 45 Calendar D. Condition

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Escrow Analysis at Account Creation: Additionally, the servicer must use the escrow account analysis to determine whether a SURPLUS, SHORTAGE, or DEFICIENCY exists and must make any adjustments to the account pursuant to this section. All servicers must use the _______ accounting method in conducting escrow account analyses.

Aggregate

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Subsequent Escrow Account Analysis: For EACH escrow account, the servicer must conduct an escrow account analysis at the _____ of the escrow account computation year to determine the borrower's monthly escrow account payments for the _____ computation year, subject to the limitations of this section. In conducting the escrow account analysis: • The servicer must _____ the disbursement amounts according to this section. • The servicer must use a date ON or BEFORE the _____ to avoid a PENALTY as the disbursement date for the escrow item and comply with any other requirements of this section: • The servicer must use the escrow account analysis to determine whether a surplus, shortage, or deficiency exists, and must make any adjustments to the account pursuant to this section. • Upon completing an escrow account analysis, the servicer must prepare an ____ escrow account statement.

A. Each B. Completion C. Next D. Estimate E. Deadline F. Annual

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Subsequent Escrow Account Analysis: For EACH escrow account, a servicer MUST submit an _____ escrow account statement to the borrower within ___ days of the completion of the escrow account computation vear and MUST also submit to the borrower the ______ year's projection or the _______ escrow account statement. The servicer must conduct an escrow account ______ BEFORE submitting an annual escrow account statement to the borrower.

A. Annual B. 30 Days C. Previous D. Initial E. Analysis

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Transfer Service Escrow Notice: If the new servicer changes either the MONTHLY payment amount or the ACCOUNTING METHOD used by the transferor (old) servicer, then the new servicer must provide the borrower with an _____ escrow account statement within ____ days of the date of servicing transfer. • Where a new servicer provides an initial escrow account statement upon the transfer of servicing, the new servicer must use the effective date of the _____ of servicing to establish the new escrow account computation year. • Where the new servicer RETAINS the monthly payments and accounting method used by the transferor servicer, then the new servicer may _______ to USE the escrow account computation established by the transferor servicer OR may choose to establish a different computation YEAR using a ____ statement. At the completion of the escrow account computation year or any short year, the new servicer must perform an escrow analysis and provide the borrower with an annual escrow account statement. NOTE: The new servicer must treat shortages, surpluses, and deficiencies in the transferred escrow account according to the procedures set forth in this section.

A. Initial B. 60 C. Transfer D. Short-Year

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Notice of Shortage or Deficiency: The servicer must notify the borrower at least ____ during the escrow account computation year if there is a shortage or deficiency in the escrow account. The notice may be _____ of the annual escrow account statement or it may be a SEPARATE document.

A. Once B. Part

Summary: The Real Estate Settlement Procedures Act of 1974 (RESPA) (12 U.S.C. $2601 et seq.) became effective June 20, 1975. The U.S. Department of Housing and Urban Development (HUD) promulgated Regulation X (12 CFR Part 1024), which is now enforced and interpreted by the ________. The primary purpose of RESPA is to help consumers become better shoppers for settlement services and to eliminate unnecessary increases in the costs of certain settlement services due to unlawful kickbacks and referral fees.

A. Consumer Financial Protection Bureau (CFPB)

Summary: The Truth in Lending Act (TILA) (15 U.S.C. 1601 et seq.) was enacted on May 29, 1968, as Title I of the _____ Act. TILA, implemented by Regulation Z became effective July 1, 1969. The primary purpose of TILA is to promote the informed use of consumer credit by requiring a uniform system for the disclosure of loan terms and costs.

A. Consumer Credit Protection Act

TILA, as implemented through Regulation Z, Part 1026 Section 24, sets forth _____ disclosure requirements for which mortgage lenders must adhere. An advertisement stating any of these four triggering terms must also state additional loan disclosures required by Regulation Z, including: a. b. c. d. Summary: The common element in trigger terms is the quoting of a "specific" number. The ONLY "specific" number that is always acceptable is the ______.

A. Advertising B. Down Payment Amount Payment Period Payment Amount Finance Charge. C. Actual APR

Summary: The Truth-in-Lending Act, as implemented by Regulation Z, and the Real Estate Settlement Procedures Act, as implemented by Regulation X, set forth disclosure requirements for most mortgage transactions. The TILA-RESPA Integrated Disclosure Rule (TRID) consolidates four disclosure forms that were formally required under TILA and RESPA into two forms: a. b. TRID requirements are incorporated in the provisions of Regulation Z and X.

A. The Loan Estimate B. Closing Disclosure

STUDY TIP: As set forth by TILA, a complete application that triggers federal disclosures requires the applicant's name, Social Security number, income, loan amount sought, estimate of property value, and property address also known as ________.

A. ALIENS

Summary: The Business Day Rule defines business day as the days on which the lender's office is open to the public for carrying on substantially all of its business functions. The More Precise Business Day Rule defines business day as ALL calendar days, EXCEPT ______ and ______ holidays.

A. Except Sundays and Federal

Summary: One of the most important concepts that a lender needs to understand when completing an initial Loan Estimate is the concept of a "______." The Loan Estimate is designed to provide an ACCURATE estimate of all settlement provider charges the borrower can expect to incur during the course of the loan and at loan consummation. The initial Loan Estimate and other initial disclosures must be delivered or placed in the mail no later than ____ business days after the lender receives a ______ for a residential mortgage loan (______ Business Day Rule) and at least seven business days before consummation of the transaction (______ Business Day Rule). A REVISED Loan Estimate must be delivered or placed in the mail within _____ business days (Business Day Rule) of the changed circumstance and at least _____ business days (_______ Business Day Rule) PRIOR to _______.

A. Good Faith Estimate B. Three C. Completed Application D. N/A E. More Precise F. Three G. Four H. More Precise I. Consummation

Summary: The _____ is NOT just the interest rate that appears in the PROMISSORY note, known as the _____ rate. It is also a separate number that reflects certain finance charges associated with the loan, spread out over the ____ of the loan. Therefore, the APR is generally _____ than the note rate. It can be a challenge to explain closing costs and fees to consumers, especially to define those fees that are considered ____ charges for the purpose of calculating the APR. Regulation Z defines the FINANCE charge as the cost of consumer ____ as a dollar amount.

A. APR B. Note C. Life D. Higher E. finance G. Credit

Summary: It is NOT a violation of Regulation Z for an applicant to provide a ____ number before receiving required disclosures and communicating an intent to proceed provided that the applicant's authorization is only to pay for the cost of a _____ and the ONLY charge made is a reasonable and bona fide fee for obtaining the consumer's credit report.

A. Credit Card B. Credit Report

Summary: Whether the consumer CONSENTS electronically or CONFIRMS CONSENT electronically, it must be in a manner that reasonably demonstrates the consumer CAN ____ information in the electronic form that will be used by the lender. Consent provided through oral communications or a recording of oral communication will never qualify as providing consent or demonstrating that records can be accessed in the electronic form that will be used.

A. Access

Summary: Not later than ____ business days (Business Day Rule) after a lender receives an application or information sufficient to COMPLETE an application, the lender must provide the loan applicant with a clear and conspicuous written list of _____ homeownership _____ organizations that provide relevant counseling services in the loan applicant's ______ per HUD.

A. 10 B. Counseling C. Location

Summary: When a borrower is permitted to shop for a settlement service listed in Loan Estimate Section C, Services You Can Shop For), Regulation Z REQUIRES the lender to provide the borrower with a Written List of ______ Service Providers.

A. Settlement

Summary: The INITIAL Closing Disclosure must be received by the borrower at least _____ business days ( ______ Business Day Rule) before loan _______ and contain the actual TERMS and COSTS of the transaction. The ______-business-day waiting period begins immediately if delivered in ______. If mailed or delivered electronically, the waiting period begins three business days after it is delivered or placed in the ____ ( ________ Business Day Rule).

A. Three B. More Precise C. Consummation D. Three E. Person F. Mail G. More Precise

Summary: TILA states that if there is a change to the FINAL annual percentage rate shown on the initial Closing Disclosure that is outside accepted _____ on a closed-end REGULAR transaction that varies by more than _____% or ______% for an IRREGULAR transaction, the borrower must be given a _____ Closing Disclosure and an additional three-day _____ period to review the new disclosure.

A. Tolerances B. 1/8% (0.125) or 1/4% (0.250) C. REVISED D. Rescission

Summary: If a charge was listed in Section B: Services You _____ Shop For in the Loan Estimate, the same charge is to be reflected in Section B: Services Borrower ______ Shop For in the Closing Disclosure. A charge in Section B will have a _____ tolerance for change. If the borrower CHOSE a provider from the written list or goes with the lender's default, the fee goes in Section ____ of the Closing Disclosure. If the borrower is given a written list but chose a provider NOT on the list, the fee goes in Section ___ of the Closing Disclosure.

A. CANNOT B. DID NOT C. ZERO D. B [Services You CANNOT Shop For] E. C [Services You DID NOT Shop For]

Summary: The tolerance for change is UNLIMITED for Section ______, Section _____, and Section ______ as long as the Loan Estimate provides a reasonable estimate of the cost. Recording fees fall into the bucket that allows for a _______ tolerance for change. Lenders are expected to know the exact amount of the transfer tax as provided on the LOAN ESTIMATE, in Section ______.

A. Section F: Pre-Paids B. Section G: Initial Escrow Payment at Closing C. Section H: Other D. 10% Aggregate Limited E. Section E

Summary: For transactions subject to the Regulation Z right of ______, consumers can exercise the right to rescind until _____ of the THIRD business day following loan consummation, delivery of the required rescission notice, or delivery of all material disclosures, whichever occurs last. For ____ and ____ purposes, the ______ Business Day Rule ALWAYS applies.

A. Rescission B. Midnight C. Recession and Consummation D. More Precise

Summary: Not later than ___ days after the date of cancellation or termination of PMI, the servicer must notify the borrower in ____ that PMI has TERMINATED and that the borrower NO longer has MI and NO further premiums, payments, or other fees are DUE or PAYABLE by the borrower in connection with the PMI.

A. 30 B. Writing

Summary: The transferor servicer must provide the notice of _____ for any assignment, sale, or transfer of the servicing of the mortgage loan to the borrower not less than ____ days before the EFFECTIVE ____ of the transfer of the servicing of the mortgage loan. During the ____-day period beginning on the EFFECTIVE date of transfer of the servicing of any mortgage loan, if the transferor servicer (rather than the transferee servicer that should properly receive payment on the loan) receives payment ____ or _____ the applicable due date (including any grace period allowed under the mortgage loan instruments), a payment may not be treated as late for any purpose. If the new servicer changes either the monthly payment amount or the accounting method used by the transferor servicer, then the new servicer must provide the borrower with a NEW _____ escrow account statement within ____ days of the date of servicing transfer.

A. Transfer B. Date C. 60 D. ON or Before E. INITIAL F. 60

Federal Disclosure Laws: More On Real Estate Settlement Procedures Act (RESPA): Section ___ Mortgage Servicing Transfer Required Disclosure and Notice: Handling Payments of Service Transferred Accounts: Beginning on the effective date of transfer of the servicing of any mortgage loan, with respect to payments received incorrectly by the transferor servicer (rather than the transferee servicer that should properly receive the payment on the loan), the transferor servicer must promptly: • Transfer the payment to the transferee servicer for application to a borrower's mortgage loan account, Or • Return the payment to the person that made the payment and notify such person of the proper recipient of the payment.

A. Section 6

Vocabulary: RESPA defines an affiliated business arrangement as an arrangement in which a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally-related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1% in a provider of settlement services; and either of such persons directly or indirectly refers such business to that provider or affirmatively influences the selection of that provider.

A. Affiliated Business Arrangement

Vocabulary: The expenses incurred and paid at the time of settlement in the transferring of property.

A. Closing Costs

Vocabulary: A standardized document that presents a final, detailed accounting for a real estate transaction, listing each party's debits and credits and the amount each will receive or be required to pay at closing.

A. Closing Disclosure

Vocabulary: The receipt of a borrower's name, Social Security number, gross monthly income, subject property address, loan amount, and estimate of the value of the subject property. The obligation to provide the Loan Estimate and other application disclosures is not triggered until the consumer submits these six pieces of information required for a _______.

A. Complete Application

Vocabulary: In Regulation Z, which implements TILA, this is not the same thing as closing or settlement. This occurs when the consumer becomes contractually obligated to the creditor on the loan, not, for example, when the consumer becomes contractually obligated to a seller in a real estate transaction.

A. Consummation

Vocabulary: The cost of consumer credit as a dollar amount.

A. Finance Charge

Vocabulary: A standardized document for disclosing loan terms, annual percentage rate and other credit costs, and estimated settlement costs that lenders must present to borrowers within three business days of a complete application to satisfy the provisions of the Truth in Lending Act and the Real Estate Settlement Procedures Act.

A. Loan Estimate

Vocabulary: Any oral or written action directed to a person that has the effect of affirmatively influencing the selection of a settlement service or business provider.

A. Referral

Vocabulary: The take-back or withdrawal of an offer or contract.

A. Rescind

Vocabulary: RESPA Regulation X defines this service as any service provided in connection with a prospective or actual settlement, including origination of a federally-related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of such loans) or rendering of credit reports and appraisals.

A. Settlement Service

Chapter 7: Chapter Quiz: 1. The federal Truth in Lending Act A. prevents a broker from advertising FHA financing is available. B. prohibits lenders from advertising promotional interest rates. C. regulates advertising with references to mortgage interest rates. D. requires a lender to estimate the seller's closing costs on residential loans.

C. regulates advertising with references to mortgage interest rates. - The Truth in Lending Act and Regulation Z set forth advertising disclosure requirements that promote the informed use of consumer credit by enabling consumers to compare credit costs and shop around for the best credit terms.

Chapter 7: Chapter Quiz: 2. What Act became effective June 20, 1975, with the purpose of helping consumers become better shoppers for settlement services? A. Equal Credit Opportunity Act B. Home Mortgage Disclosure Act C. Real Estate Settlement Procedures Act D. Truth in Lending Act

C.Real Estate Settlement Procedures Act - The Real Estate Settlement Procedures Act of 1974 (RESPA) (12 U.S.C. $2601 et seq.) became effective June 20, 1975. The U.S. Department of Housing and Urban Development (HUD) promulgated Regulation X (12 CFR Part 1024), which is now enforced and interpreted by the Consumer Financial Protection Bureau. The purpose of RESPA is to help consumers become better shoppers for settlement services and to eliminate unnecessary increases in the costs of certain settlement services due to kickbacks and referral fees. RESPA also promotes transparency in the servicing of mortgage loans.

Chapter 7: Chapter Quiz: 3. RESPA is implemented byA. Regulation B. B. Regulation H. C. Regulation X. D. Regulation Z.

C. Regulation X. - Regulation X implements the Real Estate Settlement Procedures Act (RESPA).

Chapter 7: Chapter Quiz: 4. What statement triggers additional loan term disclosure for advertising purposes, according to the Truth in Lending Act? A. FHA financing available. B. Low down payment. C. Pay only $500 per month. D. We make VA loans.

C. Pay only $500 per month. - Whenever a specific payment is quoted in an advertisement, in compliance with TILA, the entire loan terms that determined that payment must be disclosed in the advertisement.

Chapter 7: Chapter Quiz: 5. Following the Business Day Rule, an MLO must deliver or place in the mail the Loan Estimate no later than the __ business day after receiving a complete application. A. 3rd B. 5th C. 7th D. 10th

A. 3rd - The Loan Estimate must be delivered no later than the third business day after receiving the consumer's complete application. The Business Day Rule applies to this disclosure. If the Loan Estimate is provided in person, it is considered received by the consumer on the day it is provided. If it is mailed or delivered electronically, the consumer is considered to have received the Loan Estimate three business davs (More Precise Business day Rule) after it is delivered or placed in the mail.

Chapter 7: Chapter Quiz: 6. The initial Loan Estimate must also be delivered or placed in the mail no later than the __ business day before consummation of the transaction applying the More Precise Business Day Rule. A. 3rd B. 5th C. 7th D. 10th

7th - The initial Loan Estimate must also be delivered or placed in the mail no later than the seventh business day before consummation of the transaction. The More Precise Business Day Rule applies to this disclosure delivery time requirement.

Chapter 7: Chapter Quiz: 7. Applying the More Precise Business Day Rule, the consumer must receive a revised Loan Estimate no later than _ business day(s) prior to loan consummation. A. one B. three C. four D. seven

C. four - Applying the More Precise Business Day Rule, the consumer must receive the revised Loan Estimate no later than four business days prior to consummation.

Chapter 7: Chapter Quiz: 8. A lender must provide a consumer with a(n) when the lender owns greater than of the referred provider or has a personal interest in the provider. A. AfBA Disclosure; 1% B. GFE; 10% C. HUD-1;5% D. Special Information Booklet; 3%

A. AfBA Disclosure; 1% - RESPA requires a lender to provide an Affiliated Business Agreement disclosure when the lender owns greater than 1% of the referred provider or has a personal interest in the provider. The Affiliated Business Arrangement Disclosure form must be provided to the consumer at the time of the referral or before.

Chapter 7: Chapter Quiz: 9. Applicant Chuck is given a Written List of Settlement Service Providers at the same time he receives a Loan Estimate. The list of settlement service providers includes referrals to lender affiliates. The AfBA disclosure must be provided to Chuck A. within three days of a complete application. B. at the same time he receives the Written List of Settlement Service Providers. C. within three days of the Written List of Settlement Service Providers being provided. D. within four days of consummation.

B. at the same time he receives the Written List of Settlement Service Providers. - According to RESPA, an Affiliated Business Arrangement (AfBA) disclosure must be provided to the consumer at the time of the referral or before. If the Written List of Settlement Service Providers includes lender affiliates, then it must be provided at the same time as the list (which is technically a referral) to stay in compliance with RESPA.

Chapter 7: Chapter Quiz: 10. Wyatt needs to add his wife to the loan application so he can use her income to qualify for the loan. Which of the following is a TRUE statement as it relates to the lender providing a revised Loan Estimate (LE)? A. The lender needs to identify if the change impacts any fees to determine if a revised LE is allowed. B. This is a changed circumstance in borrower eligibility that allows for a revised LE. C. This is a consumer-requested change that allows for a revised LE but the new LE cannot be used for good faith analysis. D. This is not a valid circumstance that allows for a revised LE.

B. This is a changed circumstance in borrower eligibility that allows for a revised LE. - This is a consumer-requested changed circumstance in borrower eligibility that allows for a revised LE that can be used for good faith analysis. A creditor may provide and use a revised LE if a changed circumstance affects the consumer's creditworthiness or the value of the security for the loan and results in the consumer being ineligible for an estimated loan term previously disclosed.

Chapter 7: Chapter Quiz: 11. Which accurately reflects the time requirement for delivering the Closing Disclosure to a borrower? A. three business days after complete application; Business Day Rule applies B. seven business days after application; More Precise Business Day Rule applies C. three business days before consummation; More Precise Business Day Rule applies D. three business days before consummation; Business Day Rule applies

C. three business days before consummation; More Precise Business Day Rule applies - Applying the More Precise Business Day Rule, the consumer must receive the Closing Disclosure no later than three business davs before consummation. If the Closing Disclosure is provided in person, it is considered received by the consumer on the dav it is provided. If it is mailed or delivered electronically, the consumer is considered to have received the Closing Disclosure three business days after it is delivered or placed in the mail.

Chapter 7: Chapter Quiz: 12. If the final APR at settlement deviates by more than from the initial APR on the preliminary Closing Disclosure on an irregular loan, an additional waiting period is triggered. A. 1/4% B. 1/2% C. 3/8% D. 6/8%

A.1/4% - If there is a change to the final annual percentage rate shown on the initial Closing Disclosure that is outside accepted tolerances on a closed-end regular transaction that varies by more than 1/8% (0.125) or 1/4% (0.250) for an irregular transaction, the borrower must be given a revised disclosure and an additional three-day rescission period to review the new disclosure.

Chapter 7: Chapter Quiz: 13. The Loan Estimate and Closing Disclosure both include Section F Prepaids, Section G Initial Escrow Payment at Closing, and Section H Other. There is a(n) tolerance for change for the costs in these three sections as long the Loan Estimate provides a reasonable estimate of the cost. A. limited B. unlimited С. zero D. unknown

B.unlimited - The tolerance for change between the Loan Estimate and Closing Disclosure is unlimited for Section F Prepaids, Section G Initial Escrow Payment at Closing, and Section H Other as long the Loan Estimate provides a reasonable estimate of the cost.

Chapter 7: Chapter Quiz: 14. When PMI is required for conforming adjustable-rate mortgages, the lender must provide required PMI cancellation disclosure notices A. with the initial Closing Disclosure. B. three business days before closing. C. at loan consummation. D. within 30 days of loan consummation.

C. at loan consummation. - When PMI is required for conforming adjustable-rate mortgages, the lender must provide to the borrower, at the time the transaction is consummated, a written notice that discloses the borrower's right to request cancellation of PMI on the date the loan balance is first scheduled to reach 80% of the original value of the property based on the amortization schedule then in effect or the date the balance actually reaches 80% of the original value of the property based on actual payments. The notice must also state that the servicer will notify the borrower when either of these two events occurs.

Chapter 7: Chapter Quiz: 15. According to the Truth in Lending Act, be EXCLUDED from the finance charge. A. interest B. points C. processing fee D. seller's points

D.seller's points - Per TILA, as implemented by Regulation Z, among other things, seller's points are not included in the finance charge. The other choices are included in the finance charge.

Chapter 7: Chapter Quiz: 16. The ____ is the only fee a lender can collect until the borrower has received the initial application disclosures, including the Loan Estimate, and the lender has acknowledged the borrower's intent to proceed with the mortgage loan. A. appraisal fee B. application processing fee C. credit report fee D. title search fee

C. credit report fee - No fee, with the exception of a bona fide and reasonable credit report fee, may be received by a lender until the borrower has received the initial application disclosures, including the Loan Estimate, and the lender has acknowledged the borrower's intent to proceed with the mortgage loan.

Chapter 7: Chapter Quiz: 17. If the borrower was given a Written List of Service Providers and decides to go with the lender's default provider, the fee for this provider goes in what section of the Closing Disclosure? A. Other B. Services Borrower Did Not Shop For C. Services Borrower Did Shop For D. Title and Government Fees

B.Services Borrower Did Not Shop For - If the borrower was given a written list but decided to go with the lender's default provider, the provider fee goes in Section B: Services Borrower Did Not Shop For on the Closing Disclosure.

Chapter 7: Chapter Quiz: 18. The servicer must notify the borrower at least during the escrow account computation year if there is a shortage or deficiency in the escrow account. A. once B. monthly С. quarterly D. twice

A. once - If an escrow account analysis discloses a shortage of less than one month's escrow account payment, then the servicer has three possible courses of action: The servicer may allow a shortage to exist and do nothing to change it; the servicer may require the borrower to repay the shortage amount within 30 days; or the servicer may require the borrower to repay the shortage amount in equal monthly payments over at least a 12-month period. The notice may be part of the annual escrow account statement or it may be a separate document.

Chapter 7: Chapter Quiz: 19. In compliance with the E-Sign Act, how must institutions confirm consumers can access electronic documents? A. obtain consumer consent by any communication method available B. obtain consumer consent electronicallv C. obtain consumer consent by mail D. obtain consumer consent by telephone

B. obtain consumer consent electronically - To ensure a consumer can communicate electronically with the financial institution to which consent has been provided, the Electronic Signatures in Global and National Commerce (E-Sign) Act requires that the consumer provide consent electronically "in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent."

Chapter 7: Chapter Quiz: 20. Elwood is refinancing the mortgage loan secured by the home that is his primary residence. How long will he have to rescind the loan after he is provided notice of the right to rescind as required by TILA and Regulation Z? A. 3 calendar days B. 3 business days C. 7 calendar days D. 7 business days

3 business days - For transactions subiect to the Regulation Z right of recession, consumers can exercise the right to rescind until midnight of the third business day following loan consummation, delivery of the required rescission notice, or delivery of all material disclosures, whichever occurs last. The More Precise Business Day Rule applies.

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