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47 Cards in this Set
- Front
- Back
- 3rd side (hint)
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CFPB |
Consumer financial protection bureau. In July 2010 congress passed and signed Dodd frank Wall Street reform and consumer protection act. Created more stringent oversight and supervision of country's financial institutions, reformed the regulation of credit rated agencies, effected changes in the securities market and created the CFPB.
Consolidated most federal consumer financial protection authority in one place. |
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CFPB protects... |
Consumers. It makes sure they get the info to make financial decisions that they need by making prices 1. Clear upfront 2. Risks are visible 3. Nothing is in fine print.
Allows to make direct comparisons among products and prohibits providers from using unfair, deceptive or subsidize practices |
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CFPB |
Consumer financial protection bureau |
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SAFE Act |
(Secure and fair enforcement) for mortgage licensing act 2008
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Housing and economic recovery act of 2008 |
Created to address the housing crisis of early 2000s. Title V is SAFE act |
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SAFE ACT Created to... |
Increase uniformity in licensing and registration requirements among the states Reduce the frugality burden of states Enhance consumer protection Reduce fraud |
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SAFE act requirements |
All residential loan originators-must be state licensed or federally registered
Mortgage loan originator- must be register if genus employed by s federally insured depository institution, any credit union or an owner and controlled subsidiary that is federally supervised
All other mortgage loan originators must be state licensed and registers in the NMLS |
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NMLS |
Nationwide mortgage licensing system and registry
Developed and maintained by the conference of state bank supervisors |
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HUD |
Development of housing and urban development- responsibilities were given to CFPB on July 21st 2011
In charge of implementing the overall responsibikities for interpretation implementation and compliance of the SAFE ACT |
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In each state CFPB is responsible for determining: |
Has mortgage loan originator licensing standards that meet the federally mandated minimums
Is participating in the NMLS |
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Safe requires that federal banking agencies federal financial institutions examination council and farm credit administration develops and maintain s system for registering with NMLS the employees of: |
Federally insured depositories and subsidiaries they own and control
Farm credit administration revisited entities
Fingerprints and background checks are required and personal fixation history and experience but they need not satisfy the rducation or testing requirements of licenses |
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Nationwide mortgage licensing system and registry |
Back (Definition) |
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Mortgage loan originator (SAFE act) |
Takes residential mortgage loan application and offers or negotiated terms of a residential mortgage loan for compensation or gain
-advises on loan terms, including rates, fees and other costs -preparing loan packages -collecting information on behalf of the consumer with regard to a residential mortgage loan
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Application (according to HUD) |
-Any request from the borrower for an offer of residential mortgage loan terms -a response to a solicitation of an offer of residential mortgage loan terms -the information from the borrower that is typically required in order to make such an offer of residential mortgage loan terms |
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Taking an application (according to CFPB) |
Receipt of an application for the purpose of deciding whether or not to extend the requested offer to the borrower |
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Loan originator excluded activities (according to SAFE) |
-administrative or clerical tasks -real estate brokerage activities -loan processing or underwriting -individuals alley involved in extensions of credit relating to timeshare plans |
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Loan originator exemptions according to CFPB |
Non commercial taking loan apps
-an individual offers or negotiated terms of a residential mortgage loan with a member of his immediate family - an individual seller provides financing to a buyer in the course of the sake of his own residence - a licensed attorney in the course of representing s client negotiated terms of s residential mortgage loan |
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Residential mortgage loan (according to SAFE) |
Loan secured by a consensual security interest in a dwelling and cross references the definition of the term dwelling (def of dwelling found in TILA) |
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Dwelling (SAFE and TILA) |
Residential structure that contains one to four units whether or not that structure is attached to real property.
Indiv. Condo unit, coop unit, mobile home and trailer if used for residence |
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National naming actuated housing construction and safety standards act of 1974 |
CFPB interprets mobile home to include manufactured homes as well. |
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Financially responsibility requirements |
SAFE act provides that states must set minimum net worth or surety bond requirements or establish s recovery fund paid into by mortgage loan originators
A MLO must have demonstrated financial responsibility, character and general fitness to warrant a determination that he will operate honesty fairly and efficiently |
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MLO testing |
Test covers: -code of ethics -federal and state law -regulation persisting to mortgage origination, Fraud, consumer protection and the non traditional mortgage market place and fair lending issues
Pass with 75%
Can take thee times with 30 days in between and then has to wait 6 months |
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Uniform state test (UST) |
April 1 2013, replaces the state specific test components for the states that adopt it.
Eats applicants in their knowledge of high level state related content that is based in the SAFE ACT and the CSBS/ASRMR model state law which states use to implement the safe act |
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MLO criminal requirements |
-must provide a fingerprint -personal history and experience aka credit report
Nothing within the last 7 years
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MLO ANNUAL License renewal |
Continue to meet minimum standards for license insurance
Satisfy the continuing education requirement of at least 8 hours of courses (3 hours of federal law regulations, 2 hours of ethics, 2 hours of training related to lending standards for the non traditional marketplace |
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The safe acts purposes |
Include increasing uniformity in licensing and registration requirements among the states |
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CFPB was meant to |
Heighten government accountability by consolidating in one place responsibilities that had been scattered across the government |
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Exclusions from the safe acts definitions of s loan originator include... |
Loan processing or underwriting by w 2 employees under the supervision of s state licensed or register loan originator |
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Housing and economic recovery act of 2008 |
Created to modernize the federal housing administration (FHA) prevent disclosures, reduce fraud and enhance consumer protections
Key component is SAFE |
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Safe act requires |
The CSBS and the AARMR to establish the NMLS
TO ROOMITE UNIFORMSLITY |
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Secondary mortgage market consists of |
1. Federal national mortgage association (FNMA) Fannie Mae 1939 buys and sells
2. Federal home loan mortgage corporation (FHLMC) Freddie Mac 1970 buys and sells
3. Government national mortgage association (GNMA) ginnie Mae 1968 guarantees a loan
Provides securitization Reduces the need for lenders to hold substantial funds for mortgage loans and developed standardized forms and they have broadened he qualifications for people buying loans
Acquired by government in 2008 |
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Loan level price adjustment (LLPA) |
Fannie Mae
Fee charged to lenders to compensate for certain loan featured that increase the risk
This fee is passed down to borrowed
Each factor increasing risk increases the LLPA
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Government national mortgage association (GNMA) |
Ginnie Mae
Government corporation within HUD
Increased the supply of credit available for housing by directing funds from the securities market into the mortgage market
Guarantees mortgage loans made by private lenses and endured by the U.S. Government |
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Gross domestic product (gdp) |
Measures the amount of goods and services produced in the United States
Affects interest rates or long term debt instruments |
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Consumer price index (cpi) |
Measures he average change in prices of consumer goods and services
Affects interest rates or long term debt instruments |
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The federal reserve (the fed) |
Controls country's monetary policy
Raises things when there is a danger for economic growth that may lead to inflation
Doesn't directly influence the rates that lenders charge borrowers |
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Mortgage or trust deed |
Secures payment of the note
Property is pledged as security or collateral but the borrower retains equitable title or possession
Borrower is the "trustor" and the lender receiving is called the "beneficiary"
Third party with s poet of sale and allowing him to foreclose without going to court is the "trustee" |
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Conventional loans |
Loans made by private parties and nongovernment lending institutions without any government insurance or government guarantee against loss for the lender.
CAN BE CONFORMING OR NON CONFORMING
Loans beside FHA, VA or USDA |
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Conforming loans |
Conventional loans that conform to the eligibility guidelines for purchase by Fannie Mae or Freddie Mac |
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Non conforming loans |
Loans to people with satisfactory credit but that exceed the loan limit are called jumbo loans. Cannot be sold to Fannie Mae or Freddie Mac- higher interest rates |
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A paper loans |
Loans made to borrowers meeting Fannie Mae and Freddie Mac credit requirements
Conforming loans |
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Alt A, b, c or d paper loans |
Subprime loans, non conventional loans |
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Subprime loans borrowers are |
Weak past credit High monthly debt payment relative to income Lack of assets Self employment or variable income
Aided in the economic crash |
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FHA funds insurance from |
Mortgage insurance premium MIP |
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FHA funds insurance from |
Mortgage insurance premium MIP |
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FHA Mortgages require |
Upfront mortgage insurance premium UFMIP- non refundable |
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Home equity conversion mortgages (HECMs) |
Loan that enables an individual age 62 or older to:
-convert some of the equity in his primary residence to cash to pay living expenses -purchase s primary residence if he has the dash to pay the down payment and closing costs
-the borrower may take the loan funds in monthly advanced for a fixed period of unfold be no longer qualified and or through s line of credit
-each months interest is added to the principle loan plan ace causing interest to be compounded |
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