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Flashcards in FHA Deck (28):
1

First National Bank owns several pieces of real estate obtained thru foreclosures. Two of these are homes that the bank would like to market and sell within the community. The bank will also provide financing for these homes. In addition, the bank owns an apartment complex that it is managing until it is sold. In relation to these properties, which of the following issues is NOT a FHA issue?

a. Discrimination based on familial status in renting apts.
b. Accessibility of the apt complex to handicapped persons.
c. Whether potential buyers of the houses are being discouraged from looking at the houses because of race or ethnic background
d. Affordability of the apts relative to the community immediately around the complex.

d. Affordability of the apts relative to the community immediately around the complex.

FHA covers all phases of real estate transactions. The bank is subject tot he act as an owner and as a creditor in this example. The bank must be careful to ensure that potential apt tenants are not discriminated against on the basis that they have or are anticipated to have children under the age of 18. The bank must be careful to include the needs of handicapped persons in modifying or designing physical structures in the apt complex. When marketing the houses the bank should make sure that it or its real estate agents do not engage in illegal practices such as steering. The monthly rent on the apts themselves is not a FHA issue provided the rent on any one type of unit is charged equally to all persons regardless of race, color, national origin, sex, religion, familial status, or handicap of the person.

2

In state bank advertisements, on what must Fair Housing logos be placed?

a. Bank communications
b. Bank advertising
c. Advertising for home improvement loans
d. Bank lobby signs

c. Advertising for home improvement loans

The FH logo must be placed on all ads for home purchase and home improvement loans.

3

First State Bank, a state nonmember bank, is auditing its recordkeeping procedures for compliance with the FDIC Fair Housing regulations. Which loan should be reviewed?

a. A loan to purchase a mobile home to be used as a vacation home
b. A HELOC
c. A loan to purchase vacant land for the construction of a residence.
d. A home purchase loan

d. A home purchase loan

The FDIC FH regulation covers only the home purchase loan. Refinancings of purchase loans are also covered

4

Which of the following loans is NOT subject to Fair Housing monitoring requirements for housing-related loans made by a national bank located outside a metropolitan statistical area (MSA)?

a. A loan to purchase a mobile home
b. A loan to provide permanent financing for the construction of a residence
c. A loan to purchase a residence
d. The refinancing of a home purchase loan

a. A loan to purchase a mobile home

Mobile home loans are not covered by the reg unless real estate on which the home will be placed is included in the financing.

5

First National Bank, with assets of $60 million, is located in a large urban area (which as been designated as an MSA). Which of the following is true of the bank's fair housing recordkeeping requirements?

a. It must keep an Inquiry/Application Log of all home loans and home improvement loans.
b. It does not have to keep any records unless it had at least 50 applications for home purchase loans during the previous calendar year.
c. It must keep monthly information on all home loan applications (including purchase, permanent financing, and refinancing) regarding the number of applications received, the number denied, the number withdrawn and the number of loans closed.
d. It must keep its HMDA LAR updated quarterly.

d. It must keep its HMDA LAR updated quarterly.

National banks that are subject to HMDA fulfill fair housing recordkeeping requirements by completing their HMDA LAR and updating it within 30 days of the end of the calendar quarter.

6

Which of the following national banks must keep an Inquiry/Application log?

A. A bank that had 50 or more home loan applications in the previous year
b. A bank that has $50 million or more in assets
c. A bank that is located in an MSA
d. A bank that has been required by the OCC to keep such a log because of complaints that its lending practices may be discriminatory

d. A bank that has been required by the OCC to keep such a log because of complaints that its lending practices may be discriminatory

7

First National Bank is located outside an MSA. It received 120 loan applications last year. Which statement best describes the bank's Fiar Housing recordkeeping requirements?

a. It may either keep the Home Loan Data System records, or it may keep the HMDA LAR info
b. It must complete up to 2,000 Home Loan Data Submission Forms per bank or 250 per decision center and submit them to the OCC within 30 days
c. It must keep a HMDA LAR
d. It must keep the Home Loan Data System records

a. It may either keep the Home Loan Data System records, or it may keep the HMDA LAR info

If the bank is not covered by HMDA, it may choose to keep a HMDA LAR or it may keep the Home Loan Data System records, at its option.

8

Which of the following is NOT a prohibited basis of discrimination under the federal FHA?

a. Race
b. Disability
c. Religion
d. Sexual orientation

d. Sexual orientation

9

Who is covered under FHA?

Any person or entity engaged in real-estate related transactions

10

What are the 7 prohibited bases under FHA?

Race
Religion
Color
National origin
Sex
Familial status
Handicap

11

When must the fair housing logo be present on advertisements?

All written advertisements for real estate lending

12

Where must the Fair Housing Poster be displayed?

In the lobby where deposits are taken or loans made.

13

______ occurs when a lender provides unequal access to credit, or unequal terms of credit, because of the race, color, national origin, or other prohibited characteristics of residents of the area in which the credit seeker resides or will reside or in which residential property to be mortgaged is located.

Redlining

14

Appraisal practices may be potentially racially biased and therefore may cause equal opportunity problems for a lender. In this approach to value, racial bias may be reflected in unsupported adjustments for "functional and economic obsolescence." Lenders should not assume that, because a home or neighborhood is over a certain age, large adjustments are appropriate.

Cost approach

15

Appraisal practices may be potentially racially biased and therefore may cause equal opportunity problems for a lender. In this approach to value, racial bias may cause an appraiser to select inappropriate comparables or make inappropriate adjustments.

Comparable sales

16

T/F: All savings associations must have clearly written, nondiscriminatory loan underwriting standards. These are not required to be available to the public on request at each office.

F. They are required to be available on public request at each office.

17

T/F: All savings association underwriting standards and businesses practices that implement them must be reviewed annually to ensure equal opportunity in lending.

T

18

What must savings associations do when someone:
- makes an application for a loan or other service?
- Requests forms or papers to be used to make an application for a loan or service?
- Inquires about the availability of a loan or service?

Associations must inform each inquirer of his or her rights to file a written loan application and receive a copy of the association's underwriting standards.

19

_____ ______ is the act of deliberately guiding loan applicants or potential purchasers toward or away from certain types of loans or geographic areas because of race.

Racial steering

20

National banks that are subject to HMDA must update the LAR within 30 ____ days after the end of each calendar quarter for applications submitted during the quarter.

business

21

National banks, not subject to HMDA, that received at least __ or more home loan applications during the previous calendar year may choose either of two recordkeeping systems.

50

22

What are the 2 recordkeeping systems for National Banks, not subject to HMDA, that received at least 50 home loan applications during the previous calendar year?

1. Maintain the records required of banks subject to HMDA
2. For the categories purchase, construction-permanent, and refi, record the following home loan info for each decision center of the bank on the Fair Housing Home Loan Data System Logsheet:
- # of apps received
- # of loans closed
- # of loans denied
- # of loans withdrawn

23

National banks not subject to HMDA must update the information with 30 _____ days of the end of each quarter.

calendar

24

What is SMSA?

Standard Metropolitan Statistical Area

25

What information must banks keep in its home loan files?

Information on the disposition of the application, whether the application was
- withdrawn before the terms were offered
- withdrawn after terms were offered
- denied
- offered and accepted

26

If an application was denied, what 2 things must be kept in the loan file?

The copy of the ECOA notice and that statement of credit denial.

27

When may a national bank be required to maintain a Inquiry Application Log?

If the OCC has reason to believe the bank is participating in illegal discriminatory practices.

28

One of the differences between the Fair Housing Act and the Equal Credit Opportunity Act is:

a. The FHA prohibits illegal discrimination in housing-related credit and ECOA doesn't
b. The ECOA affects advertising practices and FHA doesn't
c. The FHA prohibits discrimination on the basis of familial status and ECOA doesn't
d. The ECOA applies to potential credit applicants and the FHA only applies to borrowers

c. The FHA prohibits discrimination on the basis of familial status and ECOA doesn't