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Finance Ch. 3 (additional government influence)
Terms in this set (65)
The practice of refusing to provide financing in a particular area because of location
Texas Department of Savings and Mortgage Lending (SML)
Responsible for the chartering, regulation and supervision of Texas thrift industry
Texas Department of Housing and Community Affairs (TDHCA)
Responsible for the regulation of the Texas manufactured housing industry
Designed to enhance consumer protection and reduce fraud
Residential Mortgage Loan Originator
The industry term for residential loan originators, as mandated by the SAFE Act
Housing and Urban Development (HUD)
-effective November 9, 1965
-Mission is to create strong, sustainable, inclusive communities and quality affordable homes
-works to strengthen the housing market to bolster the economy and protect consumers
Housing and Urban Development (HUD) seven major programs include?
-the Federal housing administration (FHA)
-Community development block Grant's (CDBG)
-Home investment partnership act
-public or subsidized housing
-fair housing public education and enforcement
Community development block grants (CDBG)
To help communities with the economic development, job opportunities and housing rehabilitation
HOME investment partnership act
Block grants to develop and support affordable housing for low income residents
In the form of section 8 certificates or vouchers for low income households
Public or subsidized housing
For low income individuals and families
Community development Block grant program (CDBG)
-created in 1974
-assist states and communities, combining a variety of old, narrow, categorical programs
-funds must be spent to meet one of three broad national goals: aid low and moderate income persons; prevent or eliminate slum or blight conditions, or meet an urgent need that threatens the health or safety.
-70% it's fund's after set-asides, to entitlement communities (over 50,000 people)
-assists low-income households with rental subsidies in the private sector, primarily through section 8 certificates and vouchers, through the office of public and Indian housing
-Provide direct payments to public housing agencies (PHAs) and Indian Housing Authorities (IHAs) to develop and operate housing for low-income families
Federal Fair Housing
Statutes prohibit housing discrimination based on race, color, national origin, sex, religion, families with children, and disabilities
Interstate land sales full disclosure act
-prohibits developers and their agents from selling or leasing, by mail or by means of interstate commerce, any lot in any subdivision of 100 or more con-exempt lots unless a Statement of record is filed with HUD
- Contains anti-fraud provisions, applicable to subdivisions with 25 or more lots.
Fiscal Years 2014-2018 HUD Strategic Plan
-expanding opportunuty for all Americans
Fiscal Years 2014-2018 HUD Strategic Plan continues and builds on 5 strategic goals of the last plan, in the form of 4 policy-oriented strategic goals and a set of 8 specific management objectives. These are:
- Strengthen the nations housing market
- meet the need for quality affordable rental homes
-use housing as a platform to improve quality of life
- build strong, resilient, and inclusive communities
- The set of 8 management objectives include establishing strategies and metrics for acquisitions, departmental clearance, equal employment opportunity, financial management, grants management, human capital, info management, organizational structure.
Used by mortgage brokers, bankers, and correspondent lenders, and therefore is not particularly enlightening
Residential mortgage loan originators (RMLOs)
-Mandated by the SAFE Act
-To provide the buyer with at least 3 loan originators for them to consider, understanding that the buyer is free to use any loan originate that they choose
Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
-Designed to enhance consumer protection and reduce fraud
-Ensures that individuals acting as RMLOs receive training on and can demonstrate an understanding of their applicable legal and ethical obligations
Dodd-Frank Wall Street Reform and Consumer Protection Act
-signed into law in 2010
-promote the financial stability of the United States by improving accountability and transparency in the financial system, too end "to big to fail" to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices and for other purposes
- Preventing another financial crisis, and allowing any future asset bubble to be detected and deflated before another financial crisis develops
consumer financial protection bureau (CFPB)
-has the authority to examine and enforce consumer protection regulations for all mortgage-related business, large non-bank financial companies, and banks and credit unions with assets greater than 10 billion.
-Responsible for enforcing federal laws which include Truth In lending Act (TILA), Fair Credit Reporting Act (FCRA), Real Estate Settlement Procedures Act (RESPA), Equal Credit Opportunity Act (ECOA)
Community Reinvestment Act
-This federal law was passed to endure that banks would serve the needs of the community in which they were chartered to do business.
Equal Credit Opportunity Act (ECOA)
-Passed in 1974
-ensures that all consumers are given an equal chance to obtain credit
Equal credit opportunity act (ECOA) prohibit discrimination in any aspect of a credit transaction on the basis of:
-Receipt of income form a public assistance program
-the good faith exercise of any right under the consumer credit protection act
Truth in Lending Act (TILA)
-A United States federal law designed to protect consumers in credit transactions by requiring clear disclosure of key terms of lending arrangements and all associated item
-Intended to enable the customer to compare the cost of cash versus credit transactions and the difference in the cost of credit among differ lenders
Truth in lending act and advertising
To ensure the meaningful disclosure of consumer credit and lease terms so that consumers can compare those terms and shop wisely.
if an advertisement contains any one go a list of terms specified in the regulation, the advertisement must also include a number of prescribed disclosures
closed end loan
one that is funded in its entirety up front, with no additional advances anticipated (mortgage loans)
has payments and advances that vary over time. (credit card)
If an ad for close-end credit uses a triggering term it also must include the amount or percentage the _______________; the_____________; and the ___________, using that term or the abbreviation APR
-terms of repayment
-annual percentage rate (APR)
The Home Mortgage Disclosure Act (HMDA) was enacted by congress in 1975 and was implemented by the federal Reserve Board's Regulation ______. On July 21, 2011
The Rule Authority of Regulation C was transferred to the consumer financial protection bureau (CFPB). Regulation C requires lending institutions to report public _______ data
What information does Regulation C provide
- Shows whether financial institutions are serving there housing credit needs of their neighborhoods and communities
-to aid public officials in targeting public investments from the private sector to areas where they are needed
Fair credit reporting act (FCRA)
federal law designed to protect consumers against unfair credit reporting practices and protect credit privacy
Administrative procedures act (APA) put into place standarized methods for the proposal of legislation from both executive departments and independent agencies under federal control. The fundamental purpose of the APA is what?
-require agencies to keep the public informed of their rule
-provide for public participation in relation to the rule making process
-establish standards for conduct of formal rule making
-define judicial review scope
Agricultural lending is fundamentally different from residential lending in several important ways. What are these 5 ways they different?
-buyers are often seeking financing on unimproved properties that lack utilities
-the value of the land may exceed value
-the land being financed may included numerous outbuildings such as barns
-the farm or ranch in question may also be an ongoing business that has value
-the sale of arg property often includes personal property including farm equipment and livestock
In agg lending common appraisal issues and questions raised by lenders who do not understand rural properties include what 8 questions?
-Why is the nearest property 12 miles away from the subject property
-why are 2 o the comparable over 1 year old
Rural Development Guaranteed housing loan program (USDA loan) also known as section 502 loan
-offers 100% financing, no down payment
-first time and repeat home buyers can obtain this loan
-program is for primary residences only; no second homes or investor financing is available.
-for purchases and refinances only, and cash-out refinances are not allowed
Farm Service Agency (FSA)
Loan program for a farmer or rancher who is unable to obtain credit elsewhere to start, purchase, sustain, or expand a family farm.
What 4 types of loans are included in the Farm Service Agency (FSA)
-farm ownership loans
Office of Consumer Credit Commissioner (OCCC)
-regulates the credit industry and educates consumers and creditors.
-Agency efforts help produce a fair, lawful, and healthy credit environment for social and economic prosperity in Texas
The OCCC regulates 4 real estate transactions, which include?
-home equity loans
-home improvement loans
-property tax lien lenders
Texas Department of housing and community affairs (TDHCA)
-An agency responsible for affordable housing, housing related and community service programs, and the regulation of the state's manufactured housing industry
-goal to service the extremely low to moderate income
Texas Veteran's loan program (home loan program)
The veteran obtains an FHA, VA or conventional loan from a participating lender. open to all honorably discharged Texas veterans
Texas Veterans land loans
giving Texas veterans the opportunity to borrow money to purchase land at below-market interest rates while only requiring a minimum 5% down payment
The Texas veterans land loans will loan up to _____________ for a _____ year, fixed rate loan, with a minimum 5% down payment. A certified survey is required, in addition to a _______ appraisal and contract service fee.
The consumer financial protection bureau's (CFPB) regulation X, which implements the real estate procedures act (RESPA) ensures that?
the consumers throughout the nation are provided with more helpful information about the cost of the mortgage settlement and protected from unnecessarily high settlement charges.
RESPA section 8 permits per regulation X:
-fees, salaries, compensation
-payment to an attorney at law for services actually rendered
-payment by a title company to its duly appointed agent for services actually performed
-a payment by a lender to its duly appointed agent or contractor
-a payment to any person of a bona fide salary or compensation
-a payment pursuant to cooperative brokerage and referral arrangements or agreements between agents
-normal promo and educational activities
-an employers payment to its own employees for any referral activity
-cant take anything of value (tee times, movie tickets, strippers)
Respa section 6
protects homeowners against mortgage servicing abuses
RESPA section 8
prohibits kickbacks, fee-splitting, and unearned fees
RESPA Section 9
States a seller cannot require the use of particular title company
RESPA section 10
Identifies amounts that can be charges to maintain escrow accounts
The didd-frank wall street reform and consumer protections act, signed into law in 2010 established the?
Consumer Financial Protection Bureau
Real estate transactions regulated by the office of consumer credit commissioner include what 3 loan/mortgages?
-home equity loans
-home improvement loans
the community reinvestment act, enacted in ___________, ensures that banks serve the needs of the community in which they were chartered.
The real estate settlement procedures act is implemented by?
Under the _____________, the use of certain terms in an advertisement trigger the need for full disclosure of lending terms.
truth in lending act
The texan veterans land board land loan program requires a minimum down payment of?
The farm agency, a subagency of the ______________, makes various loans available to those unable to obtain mortgage credit from other, more conventional sources.
U.S. department of agg
Income eligibility for the ____________ is capped at 115% of the median income of the area in which the property is located.
USDA Rural Housing Program
Periodic payment amounts such as principal and interest, estimated escrow, estimated monthly payments, and _____________ must be disclosed in the projected payments section of the loan estimate form
The services you can shop for section of the loan estimate form includes items such as _________________.
According to the closing disclosure, prepaid are items to be paid by the consumer in advance of the first scheduled payment of the loan, and include homeowner's insurance premiums, mortgage insurance premiums, prepaid interest, property taxes, and maximum of _________ additional items.
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