RESPA, TILA, ECOA, HPA, GLBA Flashcards
(104 cards)
1
Q
RESPA Purpose
A
To promote the informed use of consumer credit through disclosures about its terms and cost. Ensures that consumers can make informed decisions about real estate transactions by understanding costs for settlement.
2
Q
RESPA Governs
A
All federally regulated mortgage loans that are secured by residential property.
3
Q
RESPA Doesn’t Govern
A
Loans on residential property of more than 25 acres
- Loans for income-producing properties like farms or commercial properties like office buildings or storefronts
- Properties that have a business purpose
4
Q
Section 6
A
Servicing
5
Q
Section 8
A
Referrals
6
Q
Section 9
A
Title Agent
7
Q
Section 10
A
Escrow
8
Q
Mortgaging Servicing Disclosure Statement (MSDS)
A
Servicing
9
Q
Notice of Transfer Statement (NTS)
A
Servicing
10
Q
Affiliated Business Arrangement Disclosure (ABA, Af BA)
A
Referrals
11
Q
Initial and Annual Escrow Statements
A
Escrow
12
Q
Provide timely and accurate information in relation to an information request, complaint, foreclosure process, or death of a borrower
A
Section 6
13
Q
Properly oversee and ensure compliance of all employees with relation to procedures and laws
A
Section 6 Servicing
14
Q
Properly process and evaluate loss mitigation applications
A
Section 6 Servicing
15
Q
Ensure necessary information about probable or actual transfer of servicing are disclosed and ensure that all documentation is transferred during actual servicing transfer situations
A
Section 6 Servicing
16
Q
Payment or provisions of a thing of value in exchange for a referral is outlawed under RESPA
A
Section 8 Referrals
17
Q
- Prohibits referrals and kickbacks
A
Section 8 Referrals
18
Q
Requires that MLOs disclose to their client if they are referring them to a company with whom the MLO is affiliated
A
Section 8 Referrals
19
Q
Borrowers have the right to choose their own title agent
A
Section 9 Title Agent
20
Q
Initial and Annual Escrow Statements
A
Section 10 Escrow
21
Q
Protects consumer’s escrow accounts
A
Section 10 Escrow
22
Q
Requires borrowers to be informed about their escrow account
A
Section 10 Escrow
23
Q
- Permits the servicer to collect a maximum of 1/6 (or 2 months) of the borrower’s annual tax and insurance payment
A
Section 10 Escrow
24
Q
Informs the borrower that their loan may be assigned to another company for servicing
A
Section 6 Mortgaging Servicing Disclosure Statement
25
Informs the borrower that their loan is being placed with a new servicer
Section 6 Notice of Transfer Statement
26
Informs the consumer of the business arrangement between the two parties
Section 8 Affiliated Business Arrangement Disclosure
27
Explains the amount needed for escrow and breaks down each payment
Section 10 Initial and Annual Escrow Statements
28
Informs the borrower of local counseling organizations
Homeownership Counseling Organization List
29
Good Faith Estimate
Informs the consumer of expected costs of the completed transaction and is good for 10 business days
30
At application or within 3 days (excluding legal public holidays) on first lien mortgages
Mortgaging Servicing Disclosure Statement
31
Notice of Transfer Statement
15 days prior to the transfer of servicing and 15 days after the servicing is transferred
32
Affiliated Business Arrangement Disclosure
At the time of referral
33
Initial and Annual Escrow Statements
At closing
34
At application or within 3 business days if mailed
Homeownership Counseling Organization List
35
At application or within 3 business days if mailed
Good Faith Estimate
36
TILA
To promote the informed use of consumer credit through disclosures about its terms and cost.
37
TILA
Regulation Z
38
RESPA
Regulation X
39
TILA Governs
Organizations that provide consumer credit
| -Mortgages, Auto loans, Credit Cards
40
TILA Does't Govern
Business or Commercial Credit
- Business, agriculture or organization credit
- Credit >$58,300 if not secured by real property
- Public utility credit
- Student Loans
- Home fuel budget plans
- Credit from a broker
41
Section 19
Mortgage Disclosure Improvement Act (MDIA)
42
Mortgage Disclosure Improvement Act (MDIA)
Requires a 7-business day waiting period between delivery of the initial disclosure and loan closing
43
Mortgage Disclosure Improvement Act (MDIA):
-Intent to proceed provision for closed-end mortgages
44
Mortgage Disclosure Improvement Act (MDIA):
-Require Delivery of Charm Booklet and Early ARM Disclosure
45
Section 23
The Right of Rescission
46
The Right of Rescission
Allows consumers to back out of refinance and reverse mortgages after closing within 3 business days
47
Section 32
Home Ownership Equity Protection Act (HOEPA
48
Home Ownership Equity Protection Act (HOEPA
- Protect consumers with limited finances or credit challenges from excessive cost during financing
49
Home Ownership Equity Protection Act (HOEPA
- Three high price loans determining criteria (APR to APOR, Prepayment penalty, Minimum term for balloon loans)
50
Higher Priced Mortgage Loans (HPML):
Protects borrowers who have qualification limitations
51
Section 35
| Higher Priced Mortgage Loans (HPML):
Requires mandatory escrow accounts and full physical appraisals
52
Section 36
The Loan Originator Rule
53
Section 36
| The Loan Originator Rule
Added by CFPB to address MLO behavior
54
Section 36
| The Loan Originator Rule
Limits how MLOs are compensated
55
Section 36
| The Loan Originator Rule
Ensures servicers process payments on receipt date, handle late payments appropriately and provide payoff statements within 7 business days
56
Section 35
Higher Priced Mortgage Loans (HPML)
57
Section 36
| The Loan Originator Rule
Prohibits fee pyramids or fee stacking
58
Section 42
| Valuation Independence
Outlaws the coercion and undue influence on property appraisers by MLO and borrowers
59
Section 42
| Valuation Independence
Forbids requiring or compelling an appraiser to falsify the appraisal
60
Section 43
Ability to Repay (ATR) and Qualified Mortgages (QM)
61
Ability to Repay (ATR) and Qualified Mortgages (QM)
Guidance on how lenders should administer high risk mortgage products
62
Ability to Repay (ATR) and Qualified Mortgages (QM)
Deals with 3 key areas (loan terms and underwriting, risk management policies for lenders and MLOs, Consumer protection issues
63
Ability to Repay (ATR) and Qualified Mortgages (QM)
Less risky due to standards and considerations (8)
64
General TILA Disclosure
Requires that the mortgage loan originator discloses specified statements to the consumer as a part of the consumer credit origination transaction
65
Loan Estimate (LE)
Provides estimate of all costs for the transaction
66
HOEPA Disclosure (Covered Loan Notice)
Required for high cost loans
67
Home Loan Toolkit (Special Information Booklet)
Informs the consumer of the mortgage process
68
Consumer Handbook on Adjustable Rate Mortgage
Educates the consumer on risks and advantages of ARMs
69
Early ARM Disclosure
Educates the consumer on the specifics of ARM
70
Initial Interest Rate Adjustment Disclosure
Provides the effective date of the new interest rate and new payment amount as well as any other changes to loan terms
71
Loan Estimate (LE)
At the time of application
72
Closing Disclosure (CD)
3 days prior to consummation of the loan
73
HOEPA Disclosure (Covered Loan Notice)
At least 3 business day prior to consummation
74
Notice of Right to Cancel (Right to Rescind)
At consummation
75
Home Loan Toolkit (Special Information Booklet)
At application
76
Consumer Handbook on Adjustable Rate Mortgage
Due at application
77
Early ARM Disclosure
At application
78
Initial Interest Rate Adjustment Disclosure
210 to 240 days prior to rate adjustment
79
Ongoing (Subsequent) Interest Rate Adjustment
Provides the effective date of the new interest rate and the new payment amount and any other changes to the loan terms
80
Ongoing (Subsequent) Interest Rate Adjustment
60 to 120 prior to rate adjustment
81
Initial Truth in Lending Statement (TIL)
Provides an estimate of the cost for financing
82
Final Truth in Lending Statement (FTIL)
Provides an estimate of the cost for financing at closing or 1 day prior if requested by borrower
83
ECOA
The Equal Credit Opportunity ACT
84
ECOA
Regulation B
85
ECOA
To promote the availability of consumer credit to all applicants by prohibiting credit decisions based on race, color, religion, national origin, gender, marital status, or age.
86
Notice of Action Taken
To notify applicants, by the creditor, whenever an action is taken, or a decision is made about their credit application status.
87
Notice of Action Taken
Due
- Credit is approved/counteroffer (30 day of app)
- Application is incomplete (30 days of app)
- Credit offer is unused/not accepted/counteroffer (90 days after offer)
- Credit is denied (Adverse Action Notice – within 30 days of application)
88
Notice of Right to Receive an Appraisal
To inform the borrower of their right to a copy of their appraisal report.
89
Must be retained for a minimum of 25 months by the MLO
Notice of action Taken
- Incomplete application disclosure
- Monitoring program disclosure
- Complaints or other written statements from a consumer
90
Notice of Right to Receive an Appraisal
Once it has been processed by the MLO the borrower is entitled to a copy of the appraisal report if one is performed on the property
91
Notice of Right to Receive an Appraisal
- If borrower doesn’t qualify for an appraisal an alternative (online data analysis tools or a broker’s price opinion, OBO, would be used to determine value. A copy is must be provided to the borrower.
92
ECOA
Civil penalties up to $5,000 per day with definitive patterns of discriminatory behaviors penalized up to $25,000
- Punitive damages: Individual violation as high as $10,000; Class action is less than or equal to $500,000 or 1% of net worth whichever is lower
93
Valuation Rule
- The applicant has the right to promptly receive a copy of the written appraisal
- Creditor must receive this waiver from the consumer at least 3 days prior to closing or opening
94
ECOA Permissible Acts
- Inquiries regarding race, ethnicity, gender, citizenship, marital status, or age for federal monitoring programs in compliance with fair lending laws or to determine if borrower is eligible for special programs
95
ECOA Permissible Acts
- Marital status to include spouse in the credit transaction, if the transaction is in a community property state, and if the borrower uses child support or alimony as repayment qualification
- Inquiries to determine public assistance income continuance
- Inquiries regarding elderly borrower’s age for program qualifying purpose
96
HPA
Notice of Right to Cancel PMI
97
Annual Privacy Notice
GLBA: Reg P
98
FCRA
Notice of Right to Recieve Credit Score
99
GLBA: Reg P
Initial Privacy Notice
100
Explains what information the institute gathers, where the information is shared and how the institution safeguards that information.
Initial Privacy Notice
101
Informs consumers of the thier right to terminate PMI insurance
Notice of Right to Cancel PMI
102
Informs the consumer that their report has been viewed and that they have the right to obtain a free credit report once a year
Notice of Right to Recieve Credit Score
103
Abitlity to Repay Standards
8 -
income and assets, employment, the amount of their new mortgage payment, other mortgage payments, monthly mortgage related obligations, current debt obligations, DTI and residual income, and credit history
104
Qualified Mortgages Characteristics
regular periodic payments do not result in an increase of the principal balance
the loan does not include balloon payments,
income and financial resources of the consumer are verified and documented,
fixed rate loans underwriting process based on the maximum interest rate allowed during the first 5 years,
the loan complies with guidelines established by the CFPB relating to ratios of total monthly DTI,
The total points and fees payable in connection with the mortgage loan do not exceed 3% of the total loan amount,
the term of the mortgage loan does not exceed 30 years
