Erin's Safe Test Flash Cards 07/23 1/5

Front 1

How long should youkeep Mortgage loan records under ECOA?

Back 1

25 months.

Front 2

How long is the DoNot Call Registry good?

Back 2

When the number is disconnected, reassigned,or when the consumer chooses to remove it.

Front 3

How many monthscushion are allowed under the escrow account rules?

Back 3

2 months cushion.

Front 4

When are escrowaccounts reviewed and what amount of overage could cause a refund to theborrower?

Back 4

Reviewed annually andif the account has more than $50 in overage it will be refunded.

Front 5

What properties arecovered under RESPA?

Back 5

Single, 1-4 familydwellings, condos and manufactured homes placed on a lot.

Front 6

RESPA imposesrestriction on ______ ?

Back 6

Amount collected for escrow accounts

Front 7

When advertising, theAPR must be present when ______?

Back 7

A rate is quoted orpresent.

Front 8

RESPA was put inplace to?

Back 8

Limit amounts inescrow, eliminate kickbacks and educate borrowers on the closing cost, it doesNOT regulate interest rates.

Front 9

According to RESPAguidelines, failure to comply with section 8 could result in a penalty of?

Back 9

$10,000 and/or 1 yearprison terms for each incident.

Front 10

Redlining is best defined as:

Back 10

failing to lend to certain geographic areas.

Front 11

Who created andmonitors a company's Red Flag Rules?

Back 11

Federal Trade Commission (FTC Red Flag Rules)

Front 12

At what point in aconventional loan will the PMI be removed?

Back 12

When the principalbalance reaches 78% of the original value or purchase price.

Front 13

When does a referringparty have to provide the ABA form to the borrower?

Back 13

Before or at the timeof the referral.

Front 14

Advertising amortgage loan product that a lender is not able to offer is a violation of whatfederal law?

Back 14

TILA Regulation Z.

Front 15

What is the Act thatrequires a financial entities to provide customers with a privacy notice, aswell as an “opt out notice”, regarding the customer’s personal information?

Back 15

Gramm-Leach Bliley Act

Front 16

Under the GLB Act,nonpublic information can only be shared with affiliates of the financialinstitution or affiliates of related third parties, even if the customer doesnot opt out. (True or False?)

Back 16

TRUE.

Front 17

What information mustbe provided to the borrower when referrals take place between affiliatedbusinesses?

Back 17

An Affiliated Business Disclosure Statement asmandated by RESPA.

Front 18

What is the primarypurpose of the Gramm-Leach Bliley Act?

Back 18

Notice of right to financialprivacy and right to opt out of sharing personal information.

Front 19

Along with the Fairand Accurate Credit Transactions Act Disposal Rule, what GLB Act provisionensures that customers information is not handled or maintained carelessly andis disposed of properly?

Back 19

GLB Act’s SafeguardsRule

Front 20

What is thedifference between the GLB Act Safeguards Rule and the FACT Act Disposal Rule?

Back 20

GLB Act’s SafeguardsRule requires all companies to design, implement, and maintain safeguards toprotect customer information from theft...FACT Act requires businesses to takeappropriate measures to safeguard from theft in the disposal of consumerreports.

Front 21

What is a “FederallyRelated Loan”?

Back 21

Loans secured by a first or subordinate lienon a residential property that meets stated RESPA criteria. The definition isso broad it covers virtually every home loan secured by a mortgage.

Front 22

Most of HUD’senforcement actions result due to Section 8 of RESPA. What is addressed inSection 8?

Back 22

Prohibited againstgiving or receiving a fee, kickback, or anything of value pursuant to anagreement or understanding for the referral of settlement business.

Front 23

What is an affiliatedbusiness agreement?

Back 23

An arrangement inwhich one person refers applicants to a settlement service provider with whomthe referring person has an ownership interest of 1% or more.

Front 24

What customerprotection does Section 10 of RESPA provide?

Back 24

Protect consumers by ensuring borrowers knowthe amount they are to deposit into escrow by preventing lenders fromovercharging borrowers for escrow deposits.

Front 25

What are theconsequences for violating Section 8 of RESPA?

Back 25

Up to $10,000 and/or one year in prison.

Front 26

What is the primaryaim of Regulation B?

Back 26

ECOA is intended topromote the availability of credit to all creditworthy applicants and prohibitdiscrimination.

Front 27

A copy of the HUD1may be requested by the borrower how many days prior to the closing?

Back 27

1 day; after Aug 1,2015, the closing disclosure is required to be given 3 days prior to closing.

Front 28

Under the ECOA, is itlawful to turn down an applicant because part of his/her income is derived frompublic assistance?

Back 28

It is UNLAWFUL not to accept an applicationdue to the type of income-- it is NOT, however, unlawful to turn them down ifthe income is not enough to qualify them for repayment.

Front 29

What is the letter ofthe Regulation by which the ECOA is also referred by?

Back 29

Reg. B (B stands forB is protected).

Front 30

To whom does the TILAapply?

Back 30

All businesses andindividuals that regularly extend consumer credit that is primarily for familyor household purposes. Regularly extend credit means more than 5 mortgages peryear.

Front 31

What is the RESPAprohibition on “markups” designed to prevent?

Back 31

A lender or service provider marking up 3rd party costs forthe purpose of retaining the additional funds.

Front 32

TILA requires thatmortgage broker fees are ________ (always/never) included in the financecharge?

Back 32

ALWAYS.

Front 33

Under the ECOA, youmust notify an applicant of Notice of Action Taken within what time period?

Back 33

30 days from receipt of a loan application.

Front 34

Credit denial lettersdo not require the disclosure of _________?

Back 34

Credit Scores.

Front 35

Which lending lawprovides that consumers get a free copy of their credit bureau report annually?

Back 35

FCRA (Fair CreditReporting Act).

Front 36

Which law prohibitsdiscrimination in residential real estate transactions?

Back 36

FHA (Fair Housing Act).

Front 37

Which law requiresinstitutions, that are covered by law, to collect extensive data about eachmortgage loan application?

Back 37

HMDA Reg. C (HomeMortgage Disclosure Act, Regulation C).

Front 38

What does the acronymTSR represent?

Back 38

Telemarketing Sales Rule (Technically an initialism, not anacronym).

Front 39

Red Flag Rules makewhat requirements on creditors and financial institutions?

Back 39

To establish anidentity theft prevention program outlining methods to prevent securitybreaches at a company wide level.

Front 40

A mortgage broker isnot a violation of Section 8 of RESPA if he/she gives or accepts a gift ofnominal value ($25 or less). TRUE or FALSE?

Back 40

FALSE. Nothing ofvalue can be accepted, regardless of the amount.

Front 41

When would it not be a violation of the TILA touse the term “low monthly payment” in an advertisement?

Back 41

When you do not advertise a rate, repaymentterm or amount of a finance charge in conjunction with the General Advertisingterm.

Front 42

Is a mortgage lenderoperating within the guidelines of the TILA if they advertise a particular homeequity loan product as “tax deductible”?

Back 42

NO. Reg Z (Z of the TILA), specificallyprohibits the use of advertisements that include any misleading statementsregarding tax benefits of a home equity plan.

Front 43

Define “propertyflipping”.

Back 43

A property is boughtand resold within a very short period of time, sometimes the same day,typically with an inflated appraised value.

Front 44

What is a strawbuyer?

Back 44

An individual whoaccepts a fee to provide his/her name, SSN, and other personal info for use ona mortgage application, the motivation being to cover the true identity of theperson sitting at the closing table.

Front 45

What is a strawseller?

Back 45

An individual whoaccepts a fee to falsely claim ownership to a property. Falsified documents arenormally used to complete the transaction (title and deeds).

Front 46

What is an “air loan”?

Back 46

A loan obtained on aproperty (land) where a structure does not exist, yet has been presented ashaving a property on the lot.

Front 47

Define “equitytheft”.

Back 47

Occurs when amortgage industry employee forges a deed transfer and obtains a new lien on theproperty without the homeowner's knowledge.

Front 48

Under whatcircumstances would a sale or assignment of a sales contract be consideredfraud?

Back 48

When a fraudulent real estate investor obtains a contract ona property with an inflated value and offers to sale the contract to anunknowing buyer for a fee.

Front 49

What is the mostcommon type of mortgage fraud involving borrowers?

Back 49

Fraudulentinformation on the loan application is the most common type of fraud committedby borrowers.

Front 50

What is the primarystep in detecting mortgage fraud?

Back 50

A thorough “commonsense” analysis of the application information and documents relating to themortgage loan request.

Front 51

Why is it importantto check the back of pay stubs, bank statements, and W2 forms?

Back 51

To detect watermarksand printed fraud prevention patterns. Technology allows to produce highquality fraudulent documents. Most have incorporated prevention techniques,however. Use them.

Front 52

What does the phrase“caveat emptor” mean?

Back 52

“Buyer beware.” Ifthe buyer is provided all the information and disclosures, they will ultimatelybe responsible for understanding the terms.

Front 53

What is a “buy-backprovision” in reference to table funding?

Back 53

If any form of fraud-related activity takesplace around a particular loan, the originator (broker) is responsible forbuying the loan back.

Front 54

What is “equity-basedlending”?

Back 54

It occurs when loans are made to homeownersbased solely on the equity in their homes with no regard to other credit. Thisis an unethical practice because it can “strip” homeowners of their equity andleave them with a larger loan than they can pay for.

Front 55

What is “Redlining?”

Back 55

Failing to lend tocertain geographic areas or segments of the population.

Front 56

What is “reverseredlining”?

Back 56

Targeting consumersto charge them more in rates and fees.

Front 57

When a consumerregisters on the National Do Not Call Registry, when does the request expire?

Back 57

Never, they remainpermanently as of the DNC Improvement Act of 2007.

Front 58

What 2 exceptionsexist for calling a client that currently resides on the Do Not Call List?

Back 58

90 days from takingan application or 18 months from a completed transaction are okay to contact

Front 59

The FACT Act’s RedFlag Rules provides indicators of potential fraud. What credit bureauinformation is most likely to indicate fraud?

Back 59

“Suspicious Identification Information” such as an addressthat doesn’t match on the credit report, a SSN identified in the reports statesas being invalid.

Front 60

When is the Notice ofRight to Receive Appraisal given to the borrower?

Back 60

Within 3 days of application.

Front 61

The GLBA PrivacyNotice may be delivered to customers via fax, mail or email? (TRUE or FALSE)?

Back 61

True, In writing orelectronic form. Clearly describe the institution’s practice of sharingnonpublic personal information.

Front 62

What federal lawregulates settlement costs?

Back 62

RESPA (Reg X, Xstands for X-Ray of your RESPA’tory system).

Front 63

Define “triggerterm”?

Back 63

The most attractivefeatures of a credit plan, such as: rate, finance charges, payment terms, downpayments, and monthly payments.

Front 64

Explain theadvertising requirements about the term “Annual Percentage Rate” outlined inReg Z?

Back 64

TILA requires clearand conspicuous presentation of relevant terms when triggers are used. Otherrelevant terms must have equal prominence so the consumer doesn’t have to readthe fine print.

Front 65

What regulation isECOA?

Back 65

Reg B.

Front 66

What is the purposeof ECOA?

Back 66

To make credit applications equally available and to allowthe request of credit without fear of discrimination of protected classes.

Front 67

How many years does avictim of ECOA discrimination have to bring civil action against a violator?

Back 67

Two years.

Front 68

What is the civilpenalty for violating ECOA?

Back 68

$10,000 eachviolation and $25,000 for patterns of misconduct.

Front 69

What does HMDA standfor?

Back 69

Home MortgageDisclosure Act (Reg C)

Front 70

What is an easy wayto remember RESPA’s Reg. X?

Back 70

X-Ray of your RESPA’tory system.

Front 71

What is an easy wayto remember TILA’s Reg Z?

Back 71

“Zila the TILA” or unTIL I Z you again”.

Front 72

What federalregulation allows a borrower to exercise their right to rescission?

Back 72

Reg Z, TILA.

Front 73

What is the fine fora violation of TILA?

Back 73

$5,000 and/or 1 yearimprisonment unless class action lawsuit, then $500,000 or 1% of net worth.

Front 74

What are the wordsbehind FCRA?

Back 74

Fair Credit Reporting Act.

Front 75

What is the DNR?

Back 75

Do Not Call Registry.

Front 76

How often must alender update their DNR database?

Back 76

Every 31 days,