Disclosures due within 30 days of application.
Notice of action taken
Notice of adverse action (if applicable)
Notice of incomplete action (if applicable)
Notice of right to recieve appraisal report
Use of trigger terms in advertisements requires.
*amount & precentage of down payment.
*terms of repayment such as inclusion of balloon payment.
*annual percentage rate.
Disclosures due within 3 days..
*Good faith estimate - RESPA
*Settlement Cost Booklet - RESPA
*Mortgage servicing disclosure statement - RESPA
*Truth in lending statement - TILA
*Variable rate progam disclosures - TILA
*CHARM booklet - TILA
*Mortgage servicing disclosure statement - TILA
Who issues regulations for TILA
*Federal Reserve Board - federal banking agencies.
*Federal Trade Commission - mortgage professionals who are not employed by a federally regulated institution.
Protected characterstics of ECOA..
*Bearing/rearing of children
Loans NOT covered by RESPA..
*Buisiness, commercial or agricultural purposes
*Temporay financing (bridge loans)
Prepaid items (on the GFE) include..
Costs due at closing which are paybale at some point in the future. (funds placed in ESCROW)
*Pro-rated real-estate taxes.
*Homeowners insurance premiums.
*Flood insurance premiums.
*Interim interest (per diem interest)
What are the penalties for violations of ECOA..
*Civial penalties $5,000 per day
*Pattern - $25,000
*Punitive damages can result in $10,000 in individual actions or the lesser of $500,000/1% of violaters net worth.
Pre-payment penalties appear on what documents..
*Truth in lending disclosure statement - TILA
Whats is the finance charge
Cost of credit expressed as a dollar amount. Finance charges include interest and ther fees paid in conjunction with the loan.
*Brooker fees & points.
*Must not be underestimated by more than $100
Government charges (on the GFE) include..
*Charges to record the mortgage.
*Other charges established by the state or municipality.
The Notice of Right to Cancel is required..
Must be excercised within 3 days of closing.
What must occur within 20 days of recission.
The lender must RETURN ANY MONEY OR PROPERTY paid by the borrower in connection with the loan.
Accepting a referral fee can lead up to..
Violating RESPA Section 8 - Reg X
* $10,000 or 1 yr in prison.
What are the penalties for violations of the GLBA Act..
The FTC can bring action to mortgage brokers up to $10,000
What are the penalties for violations of TILA..
Borrowers may recieve damages or equal to
*Twice the amount of the finance charge OR the amount not less than $400 or more than $4,000.
What fees are NEVER included in Finance Charges?
*Title insurance & title examination fees.
*Doc prep fees & notary fees.
*Appraisal and credit report fees.
(if they are all charged to all applicants as part of the application.)
What fees ARE included in Finance charges..
*Loan origination fees & points
*Credit life insurance fees. (when ins is required)
The Settlement Cost Info booklet is used..
** For NEW HOME PURCHASES & explains borrower process in rights under RESPA
Sections 1 of the 1003..
Is called TYPES OF MORTGAGE LOANS & TERMS OF LOAN its used to select the type of loan the applicant is applying for.
Net adjustments to comparables..
May be made up to 15% & gross adjustments up to 25% to comparables to the sales comparison approach to appraisal.
Section 2 of the 1003..
Is called PROPERTY INFORMATION AND THE PURPOSE OF THE LOAN. Used to designate information concerning the property address & how the loan proceeds will be used.
Section 3 of the 1003..
Is called BORROWER INFORMATION & used to capture the loan applicants personal information.
*Social Security #
Section 4 of the 1003..
Is called EMPLOYMENT INFORMATION captures borrowers current and 2 year employment history.
Section 7 of 1003..
Is called DETAILS OF TRANSACTION used to determine how much money the borrower will need to bring to closing.
Section 9 of the 1003..
Is called ACKNOWLEDGEMENT AND AGREEMENT confirms borrowers understand the purpose of the loan app. and its agreement.
Unpaid tax returns can stay on a credit report....
From 15 years up to indefinately. The time is determined by the jurisdiction where the consumer lives but some will remain forever. Paid tax leins stay for 7 years.
Section 8 of 1003..
Is called DECLARATIONS.. contains questions redarding judgements, citizenship, default status etc..
Overvaluation of real estate violates
PROVISIONS OF TILA - Fair Housing Act, Financial Institutions Reform, Recovery and Enforcment Act
Commingling funds is a violation of..
Escrow account requirements.. Mishandling a borrowers funds commingling them with a mortgage brokers business instead of placing them in a escrow account.
An air loan is...
A fradulent transaction where A FICTICIOUS BORROWER OBTAINS IT AND SECURES IT WITH A FICTICIUS PROPERTY..
Alt A loans..
Borrowers who DO NOT REPRESENT CREDIT RISK OF SUBPRIME but who DO NOT MEET THE REQUIREMENTS OF CONFORMING.
A non-traditional mortgage is..
A loan which allows borrowers to exchange LOWER PAYMENTS DURING INITIAL PERIOD for HIGHER PAYMENTS DURING A LATER AMORITZATION PERIOD.
The index of the ARM must be disclosed on..
*Early ARM disclosure provided at application.
*Promissary note - at closing
A construction loan is..
Called a INTERIM LOAN used to pay for construction of a home. Short-term financed often handled as IO transactions.
A promissary note includes..
*Identification of the borrower and the lender.
*Borrowers promise to repay.
*Amount of Loan.
*Interest rate charged on un paid principal.
*Period of the term for repayment of loan.
*Reference of real estate used to secure the loan.
*Provisions of impostions for loate/overude payments.
*Signature of both borrowers.
Inclusion of the premium for single-premium credit life insurance in the principal loan amount without the borrower's informed consent is one example of
What is Fannie Mae (before market changes and gov't intervention)?
Government supervised but privately owned