Laws Flashcards
(125 cards)
1
Q
What law deals with credit,APR & Advertising of consumer loans?
A
TILA/REG Z
2
Q
Which regulation prohibits kickbacks?
A
Respa Section 6
3
Q
Which regulation requires the lender to cancel PMI when the loan reaches 78% LTV
A
HPA- Homeowners Protection Act
4
Q
Which regulation prohibits fee splitting?
A
Respa
5
Q
X is the letter used to describe which regulation?
A
Respa
6
Q
RESPA is the acronym to describe which law
A
Real estate settlement procedures act
7
Q
What type of mortgage requires a non refundable funding fee?
A
VA loan
8
Q
What is the provision enabling a lender to demand full repayments if the borrower defaults on the loan
A
Acceleration Clause
9
Q
What is the provision in a mortgage enabling a lender to demand full repayment if the borrower transfers the loan
A
Alienation Clause
10
Q
What does CFPB stand for?
A
Consumer Financial Protection Bureau
11
Q
What two laws created CFPB
A
Dodd Frank and Consumer Finace Protection Act
12
Q
Which regulation is designed to help meet the credit needs of the communities in which it operates?
A
Community reinvestment Act
13
Q
Under ECOA rules and regulations how many days does the borrower have to request a copy of an appraisal report if the application was denied?
A
90 days
14
Q
Under ECOA rules and regulations if an application for credit is denied and if the borrower requests a copy, the lender has how many days to provide a copy of the appraisal?
A
30 days
15
Q
If a loan application is approved, under ECOA when must a copy of the appraisal be provided to the borrower
A
3 business day prior to settlement
16
Q
Conforming loans follow the guidelines of which regulators
A
Fannie and Freddie
17
Q
Which regulation requires the lenders to be equal when extending credit to borrowers
A
ECOA - Regulation B
18
Q
How old must a borrower be to qualify for a reverse mortgage
A
62 years
19
Q
Which regulation has the primary function of preventing identity theft?
A
Fact Act
20
Q
Which regulation has section 114 rules?
A
Fact Act
21
Q
Which regulation requires the creditor to verify the validity of any changes of address received?
A
Section 114 of Fact Act
22
Q
What is the payment method used in reverse mortgages that allow the homeowners to receive a monthly check while living int h property
A
Tenure Method
23
Q
What is the fraud scheme where a borrower use someone else’s name to purchase the property but that person will not be living at the property?
A
Straw buyer/Nominee buyer
24
Q
What type of lender insures mortgages
A
FHA approved lenders
25
What type of lender guarantees mortgages
VA & USDA approved lenders
26
What is the entity that
loans money to fund
purchases in rural areas?
USDA/Dept. of
| Agriculture
27
What is the value
remaining in property
after all liens and debts
have been paid?
Equity
28
A borrower is refinancing
his home. How much time
does Reg Z give him to
change his mind (rescind)?
3 days
29
Which Regulation
established the 3-day
right of rescission rule?
TILA/REG Z
30
Redlining is part of
| which regulation/Law?
Fair Housing Act
31
Blockbusting is part of
| which regulation/Law?
Fair Housing Act
32
Steering is part of which
| regulation/Law?
Fair Housing Act
33
```
Trying to convince a
homeowner to SELL his home
by implying that another
race/ethnicity is moving in the
neighborhood is called?
```
Blockbusting/panic
selling
34
```
Trying to convince a
homeowner to PURCHASE in
a particular neighborhood based
on his race, religion or ethnicity
is called?
```
STEERING
35
```
Refusing to make loans on a
property in a certain
neighborhood for
discriminatory reasons is
called?
```
Redlining
36
What does HOEPA stand
| for?
Home Ownership and
| Equity Protection Act
37
HOEPA Loans are part
of which larger
regulation?
Reg Z/TILA
38
High Cost Loans are part
of which larger
regulation?
Reg Z/TILA
39
High Priced Loans are
part of which larger
regulation?
Reg Z/TILA
40
Section 32 Loans are part
of which larger
regulation?
Reg Z/TILA
41
Section 35 Loans are part
of which larger
regulation?
Reg Z/TILA
42
MDIA ACT is part of
| which larger regulation?
Reg Z/TILA
43
Mortgage Disclosure
Improvement Act is part
of which larger
regulation?
Reg Z/TILA
44
What is another name for
| Annual Percentage Rate?
Effective Rate
45
What is another name for
| Interest Rate?
Note Rate or Nominal
Rate
46
PITI divided by Gross
Monthly income is
referred to as what?
Housing Ratio or Front-
| End DTI
47
PITI + monthly debt
divided by Gross
Monthly income is
referred to as what?
Total Obligation Ratio –
| Back-end Ratio
48
How long must TILA
| Disclosures be kept?
2 years
(exceptions – LE is kept
for 3 years and CD is
kept for 5 years)
49
What is the maximum
amount of time that
NEGATIVE info can
remain on a credit report?
7 years
50
What is the maximum
amount of time that a
bankruptcy can remain
on a credit report?
10 years
51
Which law/regulation states
that a Bankruptcy can only
remain on your credit for a
MAX of 10 years?
FCRA – Fair Credit
| Reporting Act – Reg V
52
Which law/regulation states
that negative information can
only remain on your credit for
a MAX of 7 years?
FCRA – Fair Credit
| Reporting Act – Reg V
53
```
Which law allows a consumer
who has had her credit card
used by an identity thief to place
a credit freeze on her credit
report?
```
FACT ACT
54
Which law requires
creditors to TRUNCATE
debit and credit card info
on receipts?
FACT ACT
55
```
Which regulation requires that loan
officers must take measures to
secure and dispose of (burn and/or
shred) a borrower’s sensitive credit
information?
```
FACT ACT
56
```
Which regulation states
that if a borrower is
denied credit, he can
receive a FREE copy of
his credit report?
```
FCRA – Fair Credit
Reporting Act
REG V
57
Which regulation states that if
a borrower is unemployed, he
can receive a FREE copy of
his credit report?
FCRA – Fair Credit
| Reporting Act – Reg V
58
```
Which regulation states that if
a borrower is on SSI or
Disability, he can receive a
FREE copy of his credit
report?
```
FCRA – Fair Credit
| Reporting Act – Reg V
59
```
Which regulation states that if
a borrower has been the
victim of fraud, he can
receive a FREE copy of his
credit report?
```
FCRA – Fair Credit
| Reporting Act – Reg V
60
```
Which regulation states that a
borrower can receive a FREE
copy of his credit report once a
year (no reason or requirement
necessary)?
```
FACT Act
61
During the loan process,
if you ask a borrower if
he is single...which law
are you violating?
ECOA – Regulation B
62
```
Which regulation states that the
only correct way to ask about a
borrower’s marital status is: are
you married, unmarried or
separated?
```
ECOA – Regulation B
63
Who is responsible for
providing the closing
disclosure to the
borrower?
The Creditor/Lender
64
Who is responsible for
providing the closing
disclosure to the Seller?
Settlement Agent/Title
| Agent
65
Which regulation
requires the borrower to
receive the Loan
Estimate?
TILA – REG Z
66
Which regulation
requires the borrower to
receive the Closing
Disclosure?
TILA – REG Z
67
Which regulation requires
the borrower to receive the
Loan Estimate within 3
business days?
RESPA – Regulation X
68
Which regulation requires
the borrower to receive the
Closing Disclosure within
3 business days?
RESPA – Regulation X
69
As it relates to the loan
estimate – what is the
definition of a Business
day?
Any day that the
Creditor’s office is open
for business
70
According to TILA/REG
Z – what is the definition
of a Business day?
Any calendar day except
for Sunday and Legal
Holiday
71
During the loan process,
where do you find
HMDA government
monitoring information?
Section X of the 1003
| application
72
What does HMDA stand
| for?
Home Mortgage
| Disclosure Act
73
```
What appraisal approach is
used when appraising
property that has been
destroyed by a natural
disaster?
```
Cost Approach or
replacement cost
approach
74
In the sales comparison
approach, how many
comps are required?
3
75
What is another name for
the Financial Services
Modernization Act of
1999?
Graham Leach Bliley
| Act
76
```
How many days does a
CREDITOR have to notify a
consumer of the status of a
credit application (denied,
approved, need more info)?
```
30 days
77
```
Which regulation states
that a creditor has 30 days
to notify a consumer of an
application approval or
denial?
```
ECOA – REG B
78
How many hours of
Ethics is required to be
taught in the 20hr
Pre-licensing course?
3
79
How many hours of Ethics
is required to be taught in
the 8hr Continuing
Education course?
2
80
How many hours of
Federal Law is required
to be taught in the 20hr
Pre-licensing course?
3
81
A mortgage that includes
more than one parcel of
land is called what?
Blanket Mortgage
82
A mortgage that includes
appliances such as a
stove or refrigerator is
called what?
Package Mortgage
83
```
Which closing document
itemizes the final closing
cost and items paid in
connection with the loan
for the borrower?
```
Closing Disclosure
84
Which law deals with
APR and Advertising of
credit terms?
TILA – REG Z
85
What is the official
| name for the 3/7/3 rule?
Mortgage Disclosure
Improvement Act or
MDIA Act
86
What regulation requires
the lender to perform an
escrow analysis?
RESPA – REG X
87
Which law states that it is a
violation to discriminate
against a potential borrower
on public assistance?
ECOA – REG B
88
What two classes are
protected under Fair
Housing Act - but NOT
under ECOA?
Disability/Handicap &
| Familial Status
89
What three classes are
protected under ECOA
but NOT under Fair
Housing?
Age, Marital Status, and
| Public Assistance
90
What is another name for
| a non-conforming loan?
Jumbo Loan
91
What is another name for
| a Jumbo loan?
Non-Conforming Loan
92
The front Ratio for an
FHA loan is 31%... what
is the back ratio?
43%
93
The front Ratio for a
Conventional loan is
28%... what is the back
ratio?
36%
94
The Ratio for a VA loan
| is?
41%
95
What is another name for
| the Bank Secrecy Act?
The anti-money
| laundering act
96
What is another name for
the Anti-Money
Laundering Act
Bank Secrecy Act
97
Which law requires banks
(financial institutions) to
keep records of deposits of
$10,000 made in cash?
Anti-Money Laundering
| Act/Bank Secrecy Act
98
```
Which law requires MLOs to file
suspicion activity that might be a
sign of tax evasion, money
laundering, or other possible
criminal activity exceeding $5,000.
```
Anti-Money Laundering
| Act/Bank Secrecy Act
99
If you fail the test, how
long must you wait
before retaking the
exam?
Required 30-day waiting
period before retaking a
failed test
100
```
How many hours of
Federal Law is required to
be taught in the 8hr
Continuing Education
course?
```
3
101
What does AUS stand
| for?
Automated Underwriting
System
102
What does SAFE Act
| stand for?
Secure & Fair
| Enforcement Act
103
What does HERA stand
| for?
Housing & Economic
| Recovery Act
104
What does HPA stand
| for?
Homeowner’s Protection
| Act
105
What does GLBA stand
| for?
Graham Leach Bliley Act
106
What type of property is
| covered under RESPA?
1 – 4 unit Residential Property
107
Which regulation allows lenders to
OBTAIN information regarding a
borrower’s ethnicity, to help identify
possible discriminatory patterns?
HMDA – Regulation C
108
When can a borrower
request cancellation of
PMI?
When LTV Reaches 80%
109
When must the lender
automatically cancel
PMI?
When the LTV reaches 78%
110
What is the primary market?
Where borrowers/consumers
| obtain mortgage loans
111
What is the secondary
market?
Where lenders buy &
sell loans from one
another
112
Name the two
Government Sponsored
Enterprises (GSEs)?
Fannie Mae
| Freddie Mac
113
Which GSE is the
Federal National
Mortgage Association?
Fannie Mae
114
Which GSE is the
Federal Home Loan
Mortgage Association?
Freddie Mac
115
TILA applies when credit
is payable by written
agreement in __________
installments?
More than 4 installments
116
Which AUS system does
| Fannie Mae use?
Desktop Underwriter
| DU
117
Which AUS system does
| Freddie Mac use?
Loan Product Advisor
(formerly Loan
Prospector)
118
How often must
National DNC and
internal DNC list be
updated?
Every 31 days and
records must be
maintained for 24
months
119
An appraisal is valid for
| _____ months?
```
An appraisal is valid for 6
months (updated 1/1/2020). It
must be re-certified if the
appraisal will be 4 months (120
days) old or more at closing.
```
120
What is the penalty for
| violating the DNC list?
$42,530 now it is 43280 per call
121
Which regulation allows
the borrower to sue for
3x’s the amount paid for
title insurance?
RESPA Section 9
122
If money was collected,
and a borrower rescinds,
how long does escrow
have to return the funds?
20 days
123
```
MLOs seeking to become licensed in
other states or who seek to move
from a bank to a non-bank lender
will be allowed ____ days of
transitional (temporary) authority.
```
These individuals are allowed to originate loans while completing any state-specific requirements for licensure such as education or testing for up to 120 days while they are applying to the state agency for their new
license.
124
What is the only fee that
can be collected prior to
delivery of the Loan
Estimate?
Credit Reporting fee
125
Once an individual is unlicensed for
________ years as an MLO, most states require that the individual retake the 20 hrs of pre-licensing education in order to have his MLO license reinstated.
Once an individual is unlicensed for
three (3) years as an MLO, most states require that the individual retake the 20 hrs of pre-licensing education in order to have his MLO license reinstated.
