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Terms in this set (165)
RESPA is the
Real Estate Settlement Procedures Act - Reg X
What type of properties is RESPA used for?
residential properties, 1-4 units
The RESPA law is primarily focused on
1. disclosure of closing costs
2. prevention of kickbacks that may raise the amount of closing costs to the consumer
What entity enforces RESPA?
Consumer Financial Protection Bureau (CFPB)
RESPA applies to what types of financing?
3. reverse mortgages
4. equity lines of credit
5. financed transactions
6. home improvement loans
According to RESPA, what three disclosures must the lender or LO give or mail to the applicant within ___ business days of receiving the signed loan application?
1. special information pamphlet
2. good faith estimate or loan estimate
3. mortgage servicing disclosure statement
Under RESPA, what does the Special Information pamphlet contain and only required for?
it explains common mortgage terms and closing costs, and is only required for purchase mortgage loans
Under RESPA, what is HUD-1 Settlement Statement or the Closing Disclosure used for?
In order to show all credits and debits to the buyer and any disbursements to third parties
Under RESPA, HUD-1/Closing Disclosure is not required if?
the borrower has no closing costs
Under RESPA, the borrower has to right to review the HUD-1 ___ business days before closing?
1 business day
RESPA requires that a preliminary copy of the Closing Disclosure be provided to the borrower, if requested, how long prior to closing?
1 business day
Under RESPA, the initial CD must be reviewed at least ___ business days before closing.
3 business days
Under RESPA, the initial escrow statement is received by the borrower at ____ or within ____ days ______ _______.
closing, 45 days after closing
Under RESPA, what does the initial escrow statement estimate show?
it estimates the first-year escrow payment for property taxes and homeowner's insurance
Under RESPA, the servicer must notify the borrower ___ days before the change goes into effect.
Under RESPA, the Servicer Transfer Statement must contain:
1. servicers name
3. toll-free phone number
4. effective date of transfer
Under RESPA, borrowers cannot be penalized for nonpayment if they continued to make payments to prior servicer, this grace period expires after ____ days.
Under RESPA, when are lenders required to analyze all escrow accounts and inform the borrowers of the findings and refund any excess of ____ or more.
Under RESPA, what is only fee that can be collected prior to the delivery of the LE/GFE?
charge for credit report, no checks or credit card info can be collected
Under RESPA, the LE/GFE must state that any estimate costs provided to the borrower before the estimate must clearly state:
that the charges could change
Under RESPA, LE must be provided by:
the lender or the loan originator
Under RESPA, the LE/GFE must be _____ or ____ no later than ___ business days after a loan application is submitted
delivered or mailed, 3
Under RESPA, the LE/GFE must be ___ or ___ no later than ___ business days prior to loan consummation
delivered or mailed, 7
Under RESPA, the LE/GFE must include this minimal information:
1. property address
2. estimated property value
4. social security number
6. loan amount
RESPA requires that all real estate broker and mortgage broker compensation be disclosed in what document?
A mortgage broker rents office space from a title company at a discount in exchange for referring customers for settlement services. Which federal law does this arrangement violate?
Under RESPA, on LE/GFE revisions of estimate cannot be made because of the following reasons:
technical issues, incorrect calculations, or low estimates
Under RESPA, estimates may be revised if the following changes are made:
increasing closing costs, affect the value of property, negatively affects affects a borrower's ability to qualify for the loan, consumer waits more than 10 days to indicate an intent to proceed, settlement is delayed more than 60 calendar days on new construction loans.
Under RESPA, the loan estimate revision must be delivered/mailed within ____ business days after becoming aware of the new information.
3 business days
Under RESPA, the revised estimate is received at least ____ business days prior to loan consummation. In this case a business day is every day, but _____.
4 business days, but Sunday and federal holidays
Under the TRID rule, GFE/HUD-1 the real estate transfer taxes, and creditor's or mortgage brokers charges for its own services (LO fees and interest rate) have ______ variance. GFE/HUD-1 must be ____.
zero variance, must be identical
Under TRID rule, for GFE/HUD-1 fees that the lender chooses or identifies (___________) can't vary on the two documents by more than ______ percent
1. lender chooses = credit report, appraisal, gov. recording fees, and title insurance if selected or "recommended" by lender.
2. more than 10 percent
Under TRID rule, for the GFE/HUD-1 fees for services the owner chooses for themselves (_______) have ______ limit on the acceptable amount of variance between the estimates and the closing statement.
1. services the owner chooses = hazard insurance, title insurance, pre-paid mortgage interest
2. have NO limit
Under TRID rule, lender have ____ days to refund any excessive variance between the GFE and the HUD-1
Under TRID, the LE and CD, _______ , must be ______ on the LE and CD.
1. real estate transfer taxes (LO fees, interest rates); charges for services provided, or creditor doesn't permit consumer to shop for (credit report, appraisal).
2. have zero variance, and must be identical on the LE and CD
Under TRID, the LE and CD fees that the lender chooses or identifies (___________) can't vary on the two documents by more than ______ percent
1. gov. recording fees, title insurance.
2. can't vary on the two documents be more than 10%
Under TRID rule, the LE and CD fees for services the owner chooses for themselves (_______) have ______ limit on the acceptable amount of variance between the estimates and the closing statement.
1. hazard insurance, title insurance.
2. have no limit on the acceptable variance
Under TRID rule, lenders have ____ days to refund any excessive variance between the LE and CD
Under RESPA, borrower must receive a CD at least ___ business days before consummation with _____ exception.
3 business days; timeshares that are consummated within 3 business days of the application - borrower receives the disclosure at time of loan consummation.
Under RESPA, if the following items change a new CD must be provided to the borrower and settlement is delayed for an additional ____ business days.
;3 business days
Under RESPA if changes other than PAL occur, the borrower has the right to view the revised CD ____ business days before consummation.
1 business day
Under RESPA, changes that occur to the CD after loan consummation gives the lender ____ calendar days after becoming aware an event that changes the CD to delver a revised CD.
Under RESPA, non-numeric clerical errors and tolerance violations trigger a new CD that must be delivered ___ calendar days following loan consummation.
According to RESPA, kickbacks violate ______ and occurs when:
Section 8 = Referrals, Illegal kickbacks, Unearned fees;
occurs when someone receives something of value in exchange for the referral of business.
According to RESPA, violation of kickbacks is treated as _____ and ______ offenses.
Civil or criminal offenses
According to RESPA, kickbacks that are considered civil penalties include the following:
reimbursement to plantiff in an amount equal to 3 times the actual cost of service.
According to RESPA, kickbacks that are considered criminal penalties include the following:
$10,000 fine and/or one year in jail per offense
According to RESPA, Section __ prohibits seller from picking ____ and requiring the buyer to purchase the services.
section 9, title company
RESPA does not require the lender to collect _____, but section __ regulates the accounts that exist.
escrowed funds, 10
RESPA regulates escrow accounts, limiting the lender to collecting ____ of the annual property tax and annual insurance premium each month.
RESPA regulates escrow accounts to collect a max of ____ months of property tax, hazard insurance at closing as an escrow cushion.
According to RESPA, when a consumer requests cancellation of their escrow account, lender must deliver Escrow Closing notice no later than ____ business days before closure.
According to RESPA if the escrow account closed for some other reason (except for _____) the notice must be sent ___ business days prior to closure.
except for default or termination caused by refinancing, repayment, or rescission; 30 business days.
According to RESPA, the Escrow Closing Notice must disclose the following:
1. account closing date
2. reason for closure
3. consumer must pay all taxes/insurance - consequences
4. cost to consumer for closing account
5. contact number to discuss status of account
According to RESPA, section ___ deals with ____
section 6 deals with servicer complaints
According to RESPA loan servicer's have ___ days to acknowledge a borrower complaint, and ____ days to resolve or explain their position.
5 days; 45 days
According to RESPA, servicer may choose an alternate insurance company and charge the borrower for the cost of continued coverage, before a loan servicer chooses to a replacement hazard insurance policy for a borrower, the servicer must notify the borrower ___ days before charging the borrower, and send a second notice ___ days after the initial notification.
45 days; 30 days;
According to RESPA, servicer's must attempt to speak a delinquent borrower within ____ days after the missed mortgage payment and mail loss mitigation information within _____ days.
36 days; 45 days
According to RESPA servicer's must acknowledge the receipt of a loan mitigation application within ____ days and let borrower know additional info necessary.
According to RESPA, a servicer can't file for foreclosure until the mortgage payment is ____ days late.
According to RESPA, creditors must retain the CD and related documents for ___ years after consummation
According to RESPA, creditors must retain the LE and related document for ___ years after consummation.
According to RESPA, creditors must retain the Escrow Cancellation Notice and Partial Payment Policy for ___ years after consummation.
If the closing disclosure needs to be revised resulting in an increase to the APR that becomes inaccurate, the addition of a prepayment penalty, or the change of a loan product, an additional __ business day waiting period applies.
How soon after a borrower is provided with all required disclosures may a loan close?
on the 7th business day after the disclosures were provided
A mortgage loan originator who supplies a revised Loan Estimate to a borrower must maintain the related documentation for at least
How long does a lender have to cure a tolerance violation?
Under RESPA, within 30 calendar days
On the closing disclosure form, the date issued is the:
Date the form is delivered to the consumer
The Real Estate Settlement Procedures Act requires that the borrower, at what point, sign the Loan Estimate after the initial loan application?
When a consumer chooses a provider that was on the Written List of Providers for a service, that service is listed as:
services borrower did not shop for
According to RESPA, a lender making a loan with escrow included is able to collect a maximum cushion of how many months at closing?
According to RESPA, an MLO is considered to have taken an application when the
MLO has gathered enough information to make a decision
What regulation forbids the seller to require the use of a particular title company as a condition of sale?
RESPA -> Section 9
Two days after borrower Jim received a Loan Estimate, he tells the lender he wants to change the loan terms from adjustable to fixed. When must he receive a revised Loan Estimate?
within 3 business days
An oral or written application is considered as taken any time a loan originator
obtains enough information to make any sort of loan decision.
Who is in violation of the Section 8 provisions of RESPA?
a title company who allows a mortgage broker to lease office space at below market rent
Mortgage broker Kelly was accused of paying a kickback to a title company and to the real estate agent who referred her. According to RESPA, what is the maximum fine that can be imposed?
Anderson Mortgage Company has decided to outsource its loan processing activities to Total Processing, Inc. Pursuant to their agreement, Anderson pays Total $300 per file when the loan closes and nothing for files that do not close. Is this a violation of RESPA?
++++++ RESPA ++++++
No, it is not a violation of RESPA to pay someone for services performed.
TILA is the
Truth in Lending Act - Regulation Z
TILA is administered by
Consumer Financial Protection Bureau
TILA covers 3 general areas:
1. Disclosure of finance charges
2. Distribution of the Consumer Handbook on Adjustable- Rate Mortgages booklet to consumers with adjustable rate mortgages.
3. Right of Rescission
Section 32, which governs high cost/high interest loans, is implemented by which federal legislation?
According to the new FHA rules effective June 2013, mortgage insurance must be paid for at least how many years prior to cancellation?
Effective January 26, 2015, new FHA mortgages and refinances of an existing FHA mortgage are subject to an upfront mortgage insurance premium (UFMIP) of
Effective January 26, 2015, annual mortgage insurance for FHA loans up to $625,000 is what percentage of the loan amount if the down payment is 5% or more on a loan term of 30 years?
A mortgage broker hands the borrower a Loan Estimate in his office the day after the application was completed. The broker can charge the borrower for an appraisal
A loan on a borrower's primary dwelling where the APR exceeds at least 1.5% of the applicable average prime offer rate for a first lien loan is known as a
Which Act amended the Truth in Lending Act, establishing disclosure requirements and prohibiting equity stripping and other abusive practices in connection with "high-cost" mortgages?
Home Ownership Equity Protection Act (HOEPA)
The main purpose of the FCRA is to
create reasonable procedures to ensure the confidentiality and accuracy of consumer credit information.
What government agency oversees TILA?
Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan?
Force-placed insurance refers to
when a homeowner fails to keep their home insured and the lender has the right to buy and charge for insurance to cover the lender's interest in the home.
Red Flag Rules are part of what federal law?
One purpose of the Fair and Accurate Credit Transaction Act is to prevent
Lyle calls XYZ Mortgage to inquire about their current rates, and gives them his name and phone number. Assuming that Lyle's name is on the National Do Not Call Registry, how long does XYZ Mortgage have to follow up with Lyle?
The duty to investigate a consumer dispute falls to the information furnishers. According to the FCRA, how many days do they usually have to respond to the consumer from the receipt of notice of a dispute?
In January 2013, mortgage servicing rules were instituted by the CFPB to provide additional consumer protections related to
The final rule on higher-priced loans (as defined under HOEPA regulations) requires an originating lender to establish and maintain an escrow (impound) account for property taxes and insurance for a minimum of ___ years.
Laura's name is on the National Do Not Call Registry. At what point after she closes a loan with ABC Mortgage must ABC stop contacting her to solicit new business?
after 18 months
A loan generally CANNOT be considered a _____________ mortgage if the points and fees paid by the consumer exceed 3 percent (%) of the total loan amount.
The rule that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable is the
If the final APR on a fixed rate loan deviates from the initial APR shown on the closing disclosure by more than ________, an additional waiting period is triggered before the loan can close.
1/8 percent (.125)
According to the Truth in Lending Act, how long is the right of rescission for borrowers who have NOT been provided with full disclosure of the APR (within stated limits)?
A lender has how many business days to notify the borrower of an underwriting decision?
One of the most critical points of the Federal Reserve Loan Originator Compensation Rule is the prohibition of the practice of
After a loan closing, funds are disbursed. When are the funds disbursed for an owner-occupied, residential refinance?
after the 3 business day recession period
According to HMDA, what must be forwarded to the regulator by March 1 of each year?
Loan Application Register (LAR)
In order for a junior mortgage on a primary residence to be considered a higher-priced loan, the APR must exceed the applicable average prime offer rate by at least
Your applicant receives child support for her seven-year-old son. Can you gross up the child support payments she receives?
Yes, gross up all net income if it is verified and likely to continue for 3 years
Title V of the Housing and Economic Recovery Act of 2008 is more commonly known as the
A $100,000 loan will be considered a Section 32 loan if the the points and fees are greater than
5% of the loan amount
To comply with the Bank Secrecy/Anti-Money Laundering Act, financial institutions must keep records of any
cash purchases of negotiable instruments
Which rule prohibits mortgage relief companies from collecting any advance fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable?
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, mortgage loans are __________ if they are secured by a consumer's home and have interest rates above certain thresholds.
Which federal act introduced the idea of a qualified mortgage?
Which law allows a consumer who has had her credit card used by an identify thief to place a freeze on her credit report?
A step rate is an interest rate that:
will change after consummation and the rates that will apply are known at consummation
When a seller owns a property that is to be resold during the first 90 days, a second appraisal is required for a conventional loan if the increase in price would be
exceeds the seller's acquisition price by more than 10 percent
Which law includes prohibitions on steering incentives?
According to the Fair Credit Reporting Act, when is a consumer entitled to get a free copy of his credit score from a credit reporting agency (assuming there has been no fraud)?
A consumer has no right to a free copy of his credit score
The 1988: Fair Housing Amendments Act - (Title VIII)--added prohibition of discrimination based on
familial or disability
Under the Home Ownership and Equity Protection Act, a creditor may not refinance a Section 32 loan into another Section 32 loan within the first ______________ of origination, unless the new loan is in the borrower's best interest.
Which law requires lenders to document how they are serving the lending needs within the communities in which they do business?
Home Mortgage Disclosure Act (HMDA)
According the Mortgage Disclosure Improvement Act, a higher-priced loan is a loan secured by the borrower's principal dwelling where the APR exceeds the applicable average prime offer rate by at least
1.5 percentage point for first lien loans
Loan Originator Compensation Requirements is a set of amendments to which federal Act?
The Good Faith Estimate/Loan Estimate must be sent to the borrower within how many business days of receiving a loan application?
The Special Information Booklet must be sent to the borrower within how many business days of receiving a loan application?
The Mortgage Servicing Disclosure Statement must be sent to the borrower within how many business days of receiving a loan application?
A borrower is entitled to request and obtain a copy of the HUD-1 Settlement Statement how many days before closing?
The maximum escrow cushion that a lender can require is:
1/6 of total yearly disbursements
The lender has how many days after settlement to refund any portion of charges on the HUD-1 that exceeded the acceptable variance?
ECOA allows an applicant to have a copy of his:
property appraisal report
How many days does a lender have after receipt of an application to notify the applicant of its action on the application?
How many days does an applicant after receipt of an adverse action notice to require a statement of reasons from the lender?
How many days does a lender have to send a statement of reasons for an adverse action after receiving request from an applicant?
TILA is administered by:
The TILA disclosure must be given to the applicant within how many days after receiving the signed loan application for a reverse mortgage?
3 business days
HOEPA considers a loan to be high cost if the total charges to the borrower exceed what percent of the loan amount?
TILA Disclosure must be delivered within how many business days prior to closing a reverse mortgage?
7 business days
The APR must be finalized at least how many days before closing?
The Home Mortgage Disclosure Act (HMDA) was implemented by the:
Federal Reserve Board
Which of the following is NOT required HMDA borrower information?
D. Loan amount
Which Act includes provisions to protect consumers personal financial information held by financial institutions?
Gramm Leach Bliley
If a Loan Estimate is mailed, it must be mailed how many days before loan consummation?
A lender has how many days to refund excessive variances on a Closing Disclosure?
How many business days before loan consummation is a borrower entitled to see a revised Closing Disclosure that did not trigger an additional 3-day waiting period?
How many business days before loan consummation is a seller entitled to see the Closing Disclosure?
0 (closing day)
When a consumer requests the cancellation of their escrow account, the lender has how many business days prior to closing the account to deliver an Escrow Closing Notice?
3 business days
When a lender cancels an escrow account for a reason other than default or termination caused by refinancing, repayment or rescission, they have how many business days prior to closing the account to deliver an Escrow Closing Notice?
30 business days
How many years must a lender retain the Loan Estimate?
How many years must a lender retain the Closing Disclosure?
How many years must a lender retain the Escrow Cancellation Notice?
How many years must a lender retain the Partial Payment Policy?
The borrower must receive the Closing Disclosure how many business days before consummation?
3 business days
The primary purpose of REPSA is to:
provide enough disclosure about settlement services so the consumer can effectively shop around
Under TRID, who is responsible for delivering the Closing Disclosure?
What new information is available on the Loan Estimate form that was not available on the GFE/TIL forms?
PITI, Cash to Close, Escrow Details, and the signature line are now included on the new Loan Estimate
When dealing with a Loan Estimate, the definition of a business day is:
All days on which the creditors offices are open to the public for carrying out substantially all of its business functions
When dealing with a Closing Disclosure, the definition of a business day is:
all calendar days, except Sundays and federal holidays
when the consumer becomes contractually obligated to the creditor on the loan
What booklet must be provided to the borrower three business days after application on a fixed rate loan?
The Home Loan Toolkit
Which law/regulation mandates waiting periods from initial disclosures to closing?
Mortgage Disclosure Improvement Act - 3/7/3 rule (MDIA)
How long must a lender keep evidence or paperwork justifying the denial of an application?
ECOA mandates a document retention period of 25 months
When do you not give an appraisal to a borrower?
if the loan was denied, and they waited until 91 days after decline.
Borrowers can receive their appraisal up to ____ days after their loan was denied.
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