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44 Cards in this Set
- Front
- Back
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Advertisement Issues is gone over in what law?
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TILA (Truth in Lending Law)
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Who requires to tell the whole story clearly and conspicuously and state terms that are actually available or willing to be arranged or offered?d
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TILA
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What disclosures must be made in an advertisement when using triggering terms?
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-Amount or % of dp
-terms of repay (ex. Balloon) -Annual % rate -If the rate may increase (If add only discloses APR then these disclosures are not required) |
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What is a closed end credit transaction?
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A transaction in which the balance is expected to be repaid.
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What type of loan is it where credit is extended to the borrower during the term and the lender may impose a finance charge on the outstanding unpaid balance, such as a home equity line of credit
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Open End Credit
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What are additional advertisement disclosure requirements for open end credit?
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1) Loan Fee
2) Periodic Rate 3) Maximum APR 4) Balloon Payments 5) Promotional Rates and Payment |
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What law requires mortgage brokers and lenders or servicer's of home loans to provide borrowers with pertinent and timely disclosures o the nature and costs of the real estate settlement process.
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RESPA
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Who prohibits kickbacks and fees for services not performed
-Requires an information booklet to be given to buyers -Requires a GFE of Closing Costs be given to buyer within 3 b-days -The only fee to be collected is a fee for a credit report -Inspect HUD-1 Settlement Statement 1 b-day before closing -Disclose AFbA -Limits on Escrow Reserves -Requires lenders to provide borrowers with a Servicing Transfer Statement - |
RESPA
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What is the penalty for a MLO having a borrower use a particular title insurance company?
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Criminal penalties or triple damages
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What is the fine for paying or receiving a kickback?
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$10,000 Fine per incident
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What Act goes over Consumer Protection; Financial Privacy Rule, Safeguard Rule & Pretexting Provisions?
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Gramm-Leach-Bliley Act
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What prohibits financial institution from disclosing access codes or account number to any nonaffiliated 3rd pary and requries a CONSUMER PRIVACY POLICY notice that explainsthe lender's informationcollections and information sharing practices be provided to CONSUMERS BEFORE the company discloses personal information (Annual notice of this)
-Allows consumers to OPT OUT of having private info. shared. |
Financial Privacy Rule
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What included the following provisions;
1) ENSURE THE SECURITY AND CONFIDENTIALITY OF CUSTOMER RECORDS 2) Protect agains any anticipated threats or hazards to the security of such records 3) Protect against the unauthorized access or use of such record or information in ways that could result in substantial harm or inconvenience to customers. |
Safeguards Rule
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What protects consumers from individuals and companies that obtain their personal financial information under false, fictitious, or fraudulent pretenses?
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Pretexting Provisions
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What Act prohibits public and private racial discrimination, applies to all property, prohibits any discrimination based on ancestry and allows people to sue if they have been discriminated against?
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Civil Rights Act of 1866
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Which Act says No Borrower may be discourage from making a formal loan application because his or her membership in a protected class?
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ECOA
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What are injunctions?
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Court orders requiring the defendant to do or refrain from doing a particular act.
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What are punitive damages?
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To punish the wrongdoer if the acts are deliberate or egregious.
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What are the 2 protected classes in FHA that are not protected by ECOA?
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Disability and Familial Status fall under FHA as protected classes.
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ECOA has 4 protects classes that stand out when compared to FHA. What are they?
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Age
Marital Status Receipt of public assistance Exercised rights under the Consumer Credit Protection Act |
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What is trying to induce owners to sell their homes by suggesting that the ethnic or racial composition of the neighborhood is changing, with the implication that property values will decline.
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Blockbusting
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What is channeling prospective real estate buyers or tenant to particular neighborhoods based on their race, religion, or ethnic background?
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Steering
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FHA requires what in advertising?
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-"Equal Housing Lender" slogan in any broadcast advertisement
-Display Equal Housing Opportunity Poster in every branch where mortgage loans are made -Display the Logo on all promotional material |
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What is the refusal to make loans on property located in a particular neighborhood for discriminatory reasons?
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Redlining
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What was enacted to combat redlining?
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CRA (Community Reinvestment Act)
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Who further enforces prohibition against redlining?
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HMDA (Home Mortgage Disclosure Act)
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What is the misrepresentation, concealment, or omission of material facts?
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Fraud
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What fraud is intentional?
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Actual Fraud
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What fraud is unintentional?
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Constructive Fraud
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How long are appraisals required to investigate the transfer history of a property?
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Past 3 years
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This amends Regulation Z and release by the Federal Reserve Board of Governers which applies to any consumer credit transaction secured by a consumer's primary dwelling, requires creditors and their agents to provide customary and reasonable compensation to fee appraisers.
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Valuation Independence
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What prohibits coercion?
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Valuation Independence
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What rule prohibits an appraiser from materially misrepresenting the value of the consumers principal dwelling and prohibits someone performing a valuation from having a direct or indirect conflict of interest, financial or otherwise, in the property?
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Valuation Independence
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Steering Buyers to a Specific Lender
Stated Income No Money Due at Closing Sale Subject to the Seller Acquiring Title Difference in Sale Price Sale Price Changes to Fit Appraisal Related Parties Involved Funds Paid to Undisclosed Third Parties Cash Paid to Seller Outside of Escrow Cash Paid to Borrower are all types of ________________. |
Red Flags
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The FBI compiles data through what?
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SARs (Suspicious Activity Reports) filed by financial institutions
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What is the private subscription service that give members access to a database of all fraud and suspected fraud?
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MARI (Mortgage Asset Research Institute)
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What involves loans that take advantage of ill-informed consumers through
excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the borrower, and other prohibited acts |
Predatory Lending
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What should consumers be informed about on (Subprime) loans?
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Payment Shock
Prepayment Penalties Balloon Payments Cost of Reduced Documentation Loans Responsibility for Taxes and Insurance |
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What are typical fraud schemes?
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Air Loan (Non-existent collateral for loan)
Deed Scam (Illegal signature on deed so it can transfer) Double Sold Loans(selling to a fraudulent company) Unrecorded or Silent Second (Buyer gives seller a 2nd mortgage without informing lender who thinks that borrowers equity is in the property is greater) |
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What are some typical predatory lending practices?
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Excessive Fees (discourage payoff on loans)
Excessive prepay penalties Extreme Lending (Targeting high debt borrowers) Equity Skimming (buying and reselling back to buyer with an interest that will cause default) Loan Flipping |
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What amended TILA?
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HOEPA (Hope for Truth TIL)
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Who prohibits equity stripping due to excessive fees and other abusive lending practices related to a high cost loan aka Sec 32 Loan?
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HOPEA
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What is prohibited under HOEPA?
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-Balloon Payments
-Negative Amortization -Pressure Tactics -Loan Pricing -Acceleration Clauses -Prepayment Penalties -Loan Flipping -Demand Clauses |
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Who bans
-mortgage foreclosure rescue and loan modification services from collection fees until homeowners have a written offer from their lender or servicer that they decide is acceptable -Requirments to disclose key information -Prohibition against making any false or misleading claims on servicing -A prohibition barring mortgage relief companies from advising consumers to discontinue communication with their lenders |
MARS (Mortgage Assistance Relief Service Rule)
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