TILA

Question 1

TILA is also known as

Answer 1

Regulation Z

Question 2

TILA is implemented by the

Answer 2

Consumer Credit Protection Action (CCPA)

Question 3

Loan whereby a lender disburses all of the funds at closing and demands repayment within a specified period of time.

Answer 3

Closed-End Loan

Question 4

Loan whereby both the borrower and the lender anticipate repeat transactions.

Answer 4

Open-End Loan

Question 5

Key data points that constitute an application under TILA

Answer 5

1. The consumer’s name
2. Social Security Number
3. Income
4. The address of the property to secure the loan
5. An estimate of the value of the property securing the loan
6. The loan amount sought

Question 6

The time that a consumer becomes contractually obligated on a credit transaction

Answer 6

Consummation

Question 7

The safest assumption for a lender to make is that Consummation will occur at

Answer 7

Time of Closing

Question 8

A residential structure that contains one to four units, whether or not the structure is attached to real property

Answer 8

Dwelling

Question 9

The cost of credit, expressed as a dollar amount

Answer 9

Finance Charge

Question 10

The cost of credit, expressed as a yearly rate

Answer 10

APR

Question 11

What is the only fee a lender may charge prior to quoting the APR and Finance Charge?

Answer 11

Cost to pull credit

Question 12

True or False:

Third-Party fees are included in the Finance Charge

Answer 12

True - if the lender requires use of the third party or the lender retains a portion of the fee

Question 13

True or False:

Optional insurance is always included in the Finance Charge

Answer 13

False - not included if it is voluntarily chosen by the borrower and it is in writing

Question 14

What fees are explicitly excluded from Finance Charge?

Answer 14

Any fees that are payable in a comparable cash transaction, such as taxes

Question 15

True or False:

Fees charged by the closing agent are included in the finance charge if the creditor requires these services, requires a charge for these services, or retains a portion of the charge.

Answer 15

True

Question 16

How much of a retained Closing Charge should be included in the calculation of the Finance Charge?

Answer 16

Only the amount retained by the lender

Question 17

Examples of fees typically included in Finance Charge / APR

Answer 17

1. Private mortgage insurance
2. Discount points and mortgage broker fees
3. Origination fees
4. Processing fees, and
5. Underwriting fees

Question 18

Examples of fees typically excluded in Finance Charge / APR

Answer 18

1. Title fees
2. Escrow fees
3. Notary fees
4. Appraisal and credit report fees, and
5. Document preparation fees

Question 19

A measure of the cost of credit, expressed as a yearly rate, that relates to the amount and timing of value received by the consumer to the amount and timing of payments made”

Answer 19

APR for Closed-End Loans

Question 20

Computed by multiplying each periodic rate by the number of periods in a year

Answer 20

APR for Open-End Loans

Question 21

Tolerance for APR miscalculations

Answer 21

1/8 of a percentage point up or down

Question 22

Disclosures regarding the risks of adjustable rates are found in the following document, due 3 business days after application

Answer 22

Consumer Handbook on Adjustable-Rate Mortgages (CHARM Booklet)

Question 23

True or False:

Post-consummation ARM disclosures can be delivered by any of the lender, servicer, or asignee

Answer 23

TRUE

Question 24

When is a rate change disclosure due to the borrower of an ARM?

Answer 24

At least 60, but no more than 120 days prior to the rate and payment change

Question 25

If the first rate change will occur within the first 210 days of an ARM loan, the first rate-change disclosure must be provided....

Answer 25

At closing / consummation

Question 26

A form of credit that is secured by a mortgage on the borrower’s home.

Answer 26

Home Equity Plan

Question 27

True or False: Loan Estimate and Closing Disclosure are only applicable to Close-End loans and therefore do not apply to Home Equity Plans

Answer 27

True

Question 28

Creates a cooling-off interval after closing on a loan. This interval is intended to give a borrower the opportunity to reconsider whether he/she wants the loan, and the ability to cancel the loan by simply providing the lender with timely notice of the cancellation

Answer 28

Three-Day Rescission Period

Question 29

How long does a borrower have to rescind a HELOC when proper TILA disclosures were not provided?

Answer 29

Three years

Question 30

Right to rescind notice must be provided to:

Answer 30

Each party that has an ownership interest in the principal dwelling (two copies each)

Question 31

Finance charge miscalculation tolerance (purchases)

Answer 31

The greater of: 1. .5% of note amount, or 2. $100

Question 32

Finance charge miscalculation tolerance (refinance)

Answer 32

The greater of: 1. 1% of note amount, or 2. $100

Question 33

Trigger Terms for Open-End LOC:

Answer 33

1. Finance charge 2. Other charges, such as late payment charges, title, appraisal, and credit report fees 3. Taxes imposed on the credit transaction, and 4. Payment terms of the home equity plan

Question 34

An initial APR that is not based on the index and margin used to make rate adjustments for adjustable-rate home equity plans.

Answer 34

Discounted or Premium Rate

Question 35

Advertising a minimum periodic payment triggers the need to disclose the possibility of a....

Answer 35

Balloon Payment

Question 36

Trigger Terms for Closed-End Loans:

Answer 36

1. Amount or percentage of any down payment 2. Number of payments or the period of repayment 3. Payment amounts, and 4. The finance charge

Question 37

What amount of interest on a mortgage is tax deductible?

Answer 37

Any amount paid on the fair market value of the home (i.e. if the loan is greater than the appraised value, this additional amount is non-deductible)

Question 38

Loan Estimate Retention Period

Answer 38

3 years

Question 39

Closing Disclosure Retention Period

Answer 39

5 years

Question 40

Escrow Closing Notice Retention Period

Answer 40

2 years

Question 41

Post-Consummation Partial Payment Policy Retention Period

Answer 41

2 years

Question 42

Loan Originator Compensation Retention Period

Answer 42

3 years