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safe act and content update
Terms in this set (55)
Party who originates, sells, and services mortgage loans, and usually acts as the originator and servicer of loans on behalf of large investors, such as insurance companies, pension plans, or Fannie Mae.
Party who, for a fee, places loans with investors, but typically does not service such loans.
person in mortgages
Natural person, corporation, company, LLC, partnership, or association
residential mortgage loan
Any loan primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling or residential real estate upon which a dwelling is constructed or is intended to be constructed a dwelling
Who is responsible for the enforcement of the SAFE Act at the federal level?
Consumer Financial Protection Bureau (CFPB)
what does "taking" a loan application mean
someone communicating directly about loan terms with the borrower
considered part of taking a loan application and being licensed
what is a "dwelling"
residential structure that contains 1-4 units, whether or not it is attached to real property
trailer for residency
individual condo unit
License Renewal Standards
Meets minimum standards under state law
satisfied the annual continuing education requirements
paid all required feeds for license renewal
Denial of an MLO applicant
Any conviction of fraud, dishonesty, or money laundering
Any felony convicted in last 7 years
Mortgage Loan Originator (MLO)
takes a residential mortgage loan application or offers/negotiates terms of a residential mortgage loan
Exemptions to requiring an MLO license
real estate brokerage activities
loan processor that doesnt state they can do MLOs to the public
minimum standards for an MLO license
never had MLO license revoked
no felonies in last 7 years
no felonies ever relating to fraud and money laundering or lack of trust
demonstrates financial responsibility
has completed pre-licensing
passed written test
The regulation that prevents a seller from requiring the use of a particular title company is
Regulation X - Real Estate Settlement Procedure Act (RESPA)
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?
You are pre-qualifying a borrower for a purchase loan. She has non-housing debt equaling $950 each month and gross monthly income totaling$5,200 each month. What is the maximum qualifying house payment, including principal, interest, taxes, and insurance on a conventional loan?
5200 * 28% = $1,456
5200 * 36% = 1872
1872 - 950 = 922
requires the mortgagor to repay the intire balance of the loan if the property is sold, transferred, or abandoned.
Which act encourages financial institutions to help meet the credit needs of their communities, including low and moderate income neghborhods
community reinvestment act
Which document is NOT required at closing?
Initial escrow statement
initial escrow statement
The Financial Services Modernization Act of 1999 is more commonly known as the
Generally speaking, a credit agency may NOT report negative credit information in a credit report that is more than how many years old?
When do you need an AfBA disclosure?
under RESPA when the service provider is an owner or has beneficial interest in a company they are providing
Which regulation requires lenders to make full disclosure about APR to borrowers in real estate financial transactions?
Regulation Z aka TILA aka Truth in Lending Act
If any triggering terms are used in an ad, what is required to be stated?
NOT total closing costs
Which law primarily combats identity theft?
Fair and Accurate Credit Transaction
Which two federal acts have the most pertinent disclosure requirements related to loan terms?
RESPA and TILA
You are refinancing a $200,000 mortgage with a prepayment penalty of six months of interest at 6.5%. How much is the prepayment penalty?
$200,000 * 6.5% = 13,000
13,000 / 2 = %6,500
you take original loan amount and multiply it by the interest rate to get annual interest. Then divide by 2 to get 6 months interest.
What Act regulates the handling and disclosure of consumers' private financial information?
A loan defined as a high-cost loan under the Home Ownership and Equity Protection Act is also known as a ???
Section 32 loan
Dodd Frank ACt incorporates what?
establishment of CFPB
goals for a QM
ammendments to TILA
which federal act requires that a "Notification of Action Taken" form be delivered within 30 days of the application?
a statement in a credit contract that requires you to repay the entire loan immediately if you miss a payment
Which law requires lenders to disclose consumer credit costs related to adjustable-rate mortgages?
Provisions in the Title III of the USA Patriot Act amended which law?
Bank Secrecy Act/Anti-Money Laundering Act
Funds for FHA loans are provided by
qualified lending institutions
The SAFE Act is part of what larger law?
Housing and Economy Recovery Act
What type of mortgage allows personal property to be included in the property sale and financed together with one loan?
When evaluating a Loan Estimate, each of these is subject to a 10% tolerance EXCEPT
owners title insurance
gov. recording charges
services the borrower can shop for
transfer taxes (zero tolerance)
A lender has how many days to notify the borrower of an underwriting decision?
Which federal act requires that a "notification of action taken" form be delivered to the applicant within 30 days of application?
Of these loans, which would require reporting under the Home Mortgage Disclosure Act?
vacant land loans
new construction loans
loans purchased for the purpose of servicing those loans
What is the earliest that a mortgage loan may close after a potential borrower completes an application?
7th business day after receiving the required disclosures or after the disclosures are mailed
Steering consumers to loan products that would result in greater compensation for a MLO is prohibited by what legislation?
which law requires lenders to disclose consumer credit costs related to ARMs?
During the application process, an MLO asks if the borrower is widowed; he is violating which law?
When a licensee ceases to engage in business and files a plan for withdrawal with the state regulatory authority, this is referred to as...
One purpose of TILA is to
inform the borrower of a lender's privacy policies
enable borrowers to compare credit costs and shop for best credit terms
all lenders to order credit reports, appraisals, etc.
enable borrowers to compare credit costs and shop for the best credit terms
a document that conveys ownership of real property from the grantor to the grantee is known as a
Which law requires notification to a borrower before the servicing of a loan is transferred to someone else?
Who is responsible for the preparation and delivery of the CD to the borrower?
TILA requires creditors to maintain records that they complied with the disclosure requirements for how many years?
advance fee bans are prohibited by the
ECOA requires the lender to provide the borrower a reason for rejection of credit in writing within how many days of loan application?
is a rate lock fee a third-party fee?
What federal legislation allows the borrower to challenge the value stated in an appraisal report?
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