1. Secured by parcels 25 acres or more, whether improved or not 2. Used for business, commercial, agricultural RESPA is a consumer protection statute meant to protect individuals, not for business purposes.

Federal Law Flashcards by Korinne Hemphill

What is the purpose of RESPA?

Consumer protection statute

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RESPA excludes:

Secured by parcels 25 acres or more, whether improved or not
Used for business, commercial, agricultural

RESPA is a consumer protection statute meant to protect individuals, not for business purposes.

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Which act was designed to promote the informed use of consumer credit?

I.e The cost of lender fees

Truth in lending act, regulation Z

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The CFPB (The bureau) is established within which system?

The federal reserve system

Treated as an executive agency

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Credit application records must be maintained for how many months?

25 months

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RESPA Disclosure for closing? Is due when?

HUD 1 or HUD 1 A; due at the time of closing, may be requested one day prior

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What are the disclosures according to regulation Z?

Early TIL disclosure statement

TIL disclosure statement

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Which act was enacted to provide protection against predatory lending?

Home ownership equity protection act
HOEPA

aka High Cost loans

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RESPA section 8 is the prohibition against what?

Kickbacks and unearned fees

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TILA - Regulation ?

Truth in Lending Act - Regulation Z

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What law addresses is dumpster diving?

FACTA

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Which is a prohibited base according to Regulation B?

National origin
Immigration status

National Origin

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Which fees would NOT be included in APR?

Application fee
Mortgage broker fee
Appraisal fee
Mortgage insurance premiums
Title insurance

Why?

Appraisal fee
Title insurance

These are fees that do not come back to the lender.

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High cost mortgages require what?

And not require what?

HUD counseling required

No appraisal or escrow account required

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TRID

TILA-RESPA Integrated Disclosure Rule

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ECOA - Regulation ?

Equal Credit Opportunity Act - Regulation B

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What law allowed consumers to view their own credit?

Fair credit reporting act, FCRA

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HUD/Fair Housing Act protects against discrimination in what areas that are not included in ECOA?

Disability

Familial status

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What is a RESPA business day?

Any day the business entity is open to the public

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What are the penalties of RESPA section 8?

Fines up to $10,000 and imprisoned up to one year or both

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Automatic termination of PMI is when according to HPA?

78% LTV

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Per RESPA, how long must the lender retain records of disclosures?

Mortgage servicing disclosure statement
HUD-1 or HUD1A
Affiliated business arrangement disclosure

Five years after settlement

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How many business days to deliver RESPA disclosures?

3 business days

Days office is open to the public.

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Which act requires lenders to ask applicants for information regarding their ethnicity, race and sex?

I.e applicants may refuse, lenders must provide according to appearance and surname

Home mortgage disclosure act

HMDA

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A High Cost mortgage is/has... HOEPA, Section 32, Regulation Z

APR exceeds APOR by more than 6.5% for first lien Fees greater than 5% (greater than or equal to 21,032); 8% or $1052 (less than 21,032) Pre-payment penalty for 36 months or more; or more than 2% of amt prepaid

At what point can the borrower request cancellation of PMI? And according to what act?

1. The date the original value of the property reaches 80% LTV HPA

When would be TIL disclosure statement require re-disclosing?

If APR varies by more than 1/8 of 1% at any time prior to closing

Transactions subject to HOEPA coverage?

Purchase-money mortgages Refinances Closed end home equity loans Open end credit (HELOCS)

Affiliated business arrangement (ABA) or Controlled business arrangements (CBA) do not violate section 8 of RESPA and Regulation X when the disclosure is given:

At or prior to the time of referral

What are the disclosure timing requirements under TILA?

1. Early TIL disclosure statement within three business days of receipt of loan application 2. TIL disclosure statement disclosed no less than seven business days prior to settlement

____ states that lenders may not ask about marital status; lenders are permitted only to ask if an applicant is married, unmarried or separated.

ECOA Regulation B

RESPA is applicable to federally related mortgage loans that are:

1. One-to-four family structures, including individual units of condominiums 2. Manufactured homes with the land it is located on

Which act is known as the PMI Cancellation Act?

HPA | Homeowners protection act

TILA 3 & 7 day waiting period follows what business days?

Rescission business days

Which of the following is not considered a “prohibited basis“ under Regulation B? A. Race B. Age C. Gender D. Religion

C. Gender Regulation B specifies SEX, not gender, as a prohibited base.

The notice of the right to rescind is applicable to what transactions?

Refinance transactions only

What act established the CFPB?

Title X, Dodd Frank

RESPA section 10 Limits on escrow accounts How much may a lender require the borrower to pay into escrow each month?

No more than 1/12 of the total of all disbursements payable during the year

The rules for high cost mortgages can be found where?

Section 32 of regulation Z

Application components - PENCIL

Property, Est Value, Name, Credit report, Income, Loan amt

What agency enforces RESPA?

CFPB Consumer Financial Protection Bureau

Notice of Right to Rescind requires?

two copies of the notice and one copy of the disclosure statement to each consumer

RESPA Disclosures following application...

1. HUD’s Special Information Booklet “Your home loan toolkit” 2. GFE - Reverse mortgages, HELOC 2. 5 Loan Estimate - most else 3. Mortgage Servicing Disclosure Statement

TILA has how many versions of business days? And what are they?

(2) General business days are days the office is open to the public Rescission business days are all calendar days except Sundays and legal holidays

RESPA - Regulation ?

Real Estate Settlement Procedures Act - Regulation X

Of the 3 C’s, which is measured by DTI?

Capacity

What Regulation references the Affiliated Business Arrangement?

Reg X, RESPA

3 main requirements of the Gramm Leach Bliley Act?

Financial Privacy Rule Safeguards Rule Pretexting Provisions

What law requires mortgage loan originators to implement a written identity theft prevention program to detect the warning signs of identity theft?

Fair & accurate credit transaction act of 2003 FACTA

What act places restrictions on lenders requirements for tax and insurance escrow accounts?

RESPA

What initial disclosure is used for reverse mortgage transactions?

GFE

The Initial TIL Disclosure is used for which transactions?

HELOC Manufactured home not secured by property Loan thru certain homebuyer assistance programs

Payments in excess of the reasonable value of goods provided or services rendered...

Kickbacks

Disparate impact

Policy or practice that has a disproportionate adverse effect on applicants from a group protected against discrimination

Regulation B allows a MLO to inquire about an applicant’s what?

Permanent residence & immigration status

Define APR

Cost of borrowers credit calculated as an annual percentage rate

Which loan product may require a second written appraisal at no cost to the borrower in connection with certain flip properties? HOEPA HPML

HPML | Higher Price

What is the purpose of the mortgage servicing disclosure statement?

Inform consumer servicing could be sold transferred or assigned

What is the qualifying income ratio on FHA?

31%/43%

Ratios: conforming conventional FHA VA USDA

28/36 31/43 -/41 29/41

Federal Law Flashcards

(60 cards)