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49 Cards in this Set
- Front
- Back
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The purpose of the SAFE Act is to
– __________ consumer protection – Reduce __________ in a mortgage transaction – Create uniform standards for __________ |
enhance
foreclosures loan originators |
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RESPA: Regulation ____, 1974
Purpose was to make lenders give an advanced _______ of closing costs within ____ business days of application… |
Regulation X
estimate, 3 business days |
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RESPA regulated that a settlement statement of ________ closing costs at closing ____ prior to closing for
the customer to review… and to prevent ________ from occurring in a real estate transaction. |
"actual", 1 day
kickbacks |
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The GFE was amended in the year ______ to reduce ______ and switch tactics and to facilitate _________ using a ______-_____ table and shopping cart.
– The customer has ____ days to accept the fees on the initial GFE before the lender can change them. – The customer has ____ days to accept the rate on the initial GFE before the lender can change it. |
2010, bait & switch
shopping, trade-off table 10 days, 10 days |
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Lender origination charges on the GFE are listed as a _______-sum and __________ change.
Total third party charges the lender selects on the GFE can change by no more than ____%. Total third party charges the borrower selects can change by ______ amount. |
lump-sum, cannot change
10%, any amount |
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On the GFE:
- Fees for escrow deposits, homeowners insurance and odd days interest can change by ______ amount. - Overages on the GFE must be refunded to the borrower within ______ days of closing. - The interest rate on the original estimate, if not locked, is good for ______ days |
any amount
30 days 0 days! |
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The HUD-1 is a two page document:
– Page 1 is the _______ side, and is not required on ___________ transactions. – Page 2 is the _______ side. Customer may request the form for inspection ____ day prior to closing • Figures on form are ________. • The HUD and GFE are kept for ____ years |
- seller
- buyer - 1 day - actual - 5 years |
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The settlement cost info book is:
- Published by _____. - Required within ____ business days on all ___________ transactions. |
HUD
3 business days, purchase |
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Initial servicing transfer disclosure is
provided within ___ days of __________. Upon loan transfer, current lender must send notice to customer ____ days prior to transfer. |
- 3 days of application
- 15 days |
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- Upon loan transfer, new lender must send
notice to customer ____ days after transfer. - Upon loan transfer, new lender cannot charge ______ fees or report the customer ______ to the CRA’s for a ____ day period. |
- 15 days
- late fees, past due, 60 days |
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An escrow account is a third party account setup by the loan servicer for the collection of ________ and __________.
– Required on any loan that has ____________ insurance. |
- Taxes & insurance
- Mortgage insurance |
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Initial escrow account disclosure to borrower
required within ____ days of __________. – No more than ____ months cushion can be collected at closing (1/6th) – No more than ____ months total can be collected at closing |
- 45 days of closing
- 2 months cushion - 14 months total |
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Escrow account _______ is performed each year
– Overages of $____ have to be returned to borrower within ____ days |
- analysis
- Overages of $50, 30 days |
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- In the case of an account dispute, a Q_______ W______ R______ allows a borrower to dispute their account with
their loan servicer. - The loan servicer must respond to the borrower acknowledging the receipt of the QWR within _____ - The loan servicer must settle the account dispute within ____ business days of the request. |
- Qualified Written Request
- 20 business days - 60 business days |
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You can change a GFE (and a client can cancel a closed loan) in the case of a ____ _ ___:
- Act of God, i.e. a natural disaster - Environmental problems (pollution) - New information not previously relied on |
- Change of circumstances
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Section 8 of RESPA:
________ and ________ are not allowed between parties providing settlement services in a real estate transaction. • Violations on this section may result in a ________ fine and / or up to ____ year in federal prison. |
- kickbacks & referral fees
- $10000 fine, 1 year in federal prison |
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Truth in Lending Act (TILA):
- Regulation ____, 1968 - Purpose was to help consumers ________ multiple credit offers through the use of ___ - Non-Advertising sections oversight belongs to _____. - Advertising oversight belongs to _____. |
- Regulation Z
- shop, APR - FRB - FTC |
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According to TILA, disclosures are
- Required within ____ business days of ________ - ____ is the cost of credit expressed as an ________ rate - ______ ______ is the cost of credit expressed as a ________ amount - ______ ______ is the amount of credit the borrower retains - ______ ______ ______ is the amount of the finance charge the lender retains at closing |
- 3 business days of application
- APR, interest rate - finance charge, dollar amount - amount financed - prepaid finance charge |
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A rescission period refers to:
- A borrower's right to cancel their loan if it was for an ________ _________ ________. - Rescission rights do not apply to __________ transactions or ___-_________ ________. |
- owner occupied refinance
- purchases, non-owner occupied |
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Regarding the rescission period:
- Each __________ is given ____ copies of the right to cancel - If a right to cancel notice is not provided the rescission period is extended from ____ ______ to ____ ______. - If a loan is rescinded lender must return all _______, and release any liens within ____ business days. |
- owner, 2 copies
- 3 days, 3 years - monies, 20 business days |
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Any thing that is advertised must actually be _________
- ______ ____ require additional terms to be disclosed – The ________, and whether it can increase after closing must also be stated – The amount of any ______ payment – The ______ of repayment (e.g. balloon, etc) |
- available or obtainable
- Trigger terms - APR - down payment - term |
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Trigger terms:
Cannot use the word “______” before the words “variable” or “ARM” in an ad for an ARM • Cannot use phrasing “_______________” if the product replaces an old obligation with a new one • Cannot use the word “_______________” in an ad that promotes the product of a for-profit lender - ______ is not a trigger term. |
- Fixed
- debt elimination (consolidation is OK) - counselor (mortgage "consultant" is OK) - APR |
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1. The 3 additional terms which commonly need to be disclosed following a trigger term are:
1. ______ 2. ______ 3. ______ 2. Terms such as "We close FAST!" & "SUPER LOW COSTS!" are __________ and do not require additional disclosure. |
1. - APR
- down payment (% down or LTV %) and - term of loan (# of pmts) 2. General terms |
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Advertising/Trigger Terms:
- Advertisements must be kept on file for ______ years. - The penalty for violation of TILA advertising regulations is $_______ and ______ in prison. - If a class action suit is filed against a lender, the penalty is ______ of the lender's net worth up to _______. Payment is required within _________ of the violation. |
- 2 years
- $5000, 1 year in prison - 1%, up to $500000, 1 year |
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An amendment to TILA was put in place in 1994 to help in the fight against what kind of practices?
What amendment was this? Section ____ of Regulation ____ |
predatory lending
32, Z |
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Dodd-Frank amended HOEPA to define High
Cost mortgages as: 1. Any loan where the fees are ____ higher than the ________ ________ 2. Any loan where the APR is ____ higher than the ______ published by the FRB 3. Any loan where the PPP is longer than ____ years |
1. 5% higher than the amount financed
2. 6.5, APR 3. 3 years |
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MDIA amended Regulation ____ in 2008 and
- Made business days for the initial disclosures and application consistent with _______’s definition, (which is?) - Business days for closing, funding, rescission consistent with _______’s definition, (which is...?) |
- Regulation Z (TILA)
- RESPA's definition- Any day the business is open & operating a "substantial portion" of it's operation - TILA's definition- any day except Sunday's & legal holidays |
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MDIA limited the fees a lender can collect before
____________ to the amount of the _________. • Initial disclosures must be provided at least ____ business days prior to closing • From the point of redisclosure, cannot close for ____ business days • Redisclose TILA disclosure if APR goes up by ______ or the finance charge goes up by ______. |
- closing, credit report
- 7 business days - 3 business days - 1/8% (I.E. .125%), $100 |
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Dodd-Frank Act:
- Amended Regulation ____, 2010 - More broadly known as ____ _____ reform - MLO compensation can only be based on loan _________ and not loan _________. - Lenders must analyze a borrowers ______ to repay their loan - ARM’s must be underwritten using ______ - Implemented Appraiser _______________ |
- Regulation Z
- Wall Street Reform - loan amount, terms - capacity (ability) - Fully indexed rate - Independence |
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HOEPA Thresholds:
• First liens: A loan is considered “Higher Priced” if the APR is ____ above the APOR – A loan is considered “______ ______” if the APR is 6.5% above the APOR • Second liens – For each percentage above, add ____% • 3.5% = Higher Priced Mortgage • 8.5% = High Cost Mortgage - If a loan is considered to be high cost, required disclosures are needed ______ before closing |
- 1.5%
- high cost - Add 2% (to regulation standards for first liens) - 3 days |
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ECOA:
• Regulation ____, 1968 • Administered by the ____ • Purpose was to prevent __________ in a consumer credit transaction, and • Required lenders send out a notice of ______ ______ within ___ days of ______ |
- Regulation B (Be equal)
- FRB (Federal Regulatory Board) - discrimination - action taken within 30 days of application |
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ECOA (regulation B) implemented regulations concerning discrimination, meaning a loan originator cannot take into account the following items when making a loan:
– Age – Gender – Marital Status • __________ • __________ • __________ – Religion – Ethnicity – Race – Color |
- Married
- Unmarried - Separated |
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Under ECOA:
• Lenders can always require a co-signer if the applicant is a ______. – This is a form of __________. • Lenders can also take into account ________ status when deciding whether or not to make a loan. • The only possible time it is ok to ask about religion is when the lender is a ___ ______. |
- Minor
- Discrimination (legal discrimination) - Immigration - Non-profit |
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• Notice of action taken must be sent to applicant
within ______ of application. • An application denial or turndown is called an ______ ______. – The notice must provide ______ reasons of denial, or _______. – The notice must have a disclosure explaining to the customer they can request the ______ reasons of denial within ____ days. |
- 30 days
- Adverse action - specific, turndown - specific reason, 60 days |
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ECOA Regulations:
• Records for a residential loan must be kept by the lender for ____ months • Discrimination complaints on a residential application can be brought to ____ for up to ____ months • Enforcement of ECOA for non-bank lenders is handled by the ____. |
- 25 months
- HUD, 24 months - FTC |
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Fair Housing Act:
• Oversight is provided by ____, 1968 • Allows for equal access to housing without discrimination • It is different from ECOA because it includes protections for ________ and _______ _______ but not protections for ________ and _______ _______. • Both ECOA and FHA protect expectant _______. • HUD handles __________ complaints |
- FRB (Federal Regulatory Board)
- disability, family makeup - minors, marital status - expectant mothers - discrimination complaints |
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HMDA (Home Mortgage Disclosure Act):
• Regulation ____ • Oversight is provided by the ________________ • See whether or not lenders were meeting the _____________________ of their communities • See where _______________________ is needed • See whether or not ___________ is taking place – ____ ______ is not lending to a certain socioeconomic neighborhood or area |
- Regulation C
- FRB (Federal Reserve Board) - housing credit needs - public housing assistance - discrimination, red-lining |
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HMDA (Home Mortgage Disclosure Act):
• The originator collects ______, ______ & _____ on Section ___ of the _______ • The lender reports it to _______ on the ______ |
- ethnicity, race, gender, Section 10 (X) of the 1003
- HUD, LAR (loan activity report) |
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The Federal Trade Commission oversees:
- Regulation V (______) - Regulation P (______) - MARS (______) - TCPA (______) - Do Not Call Registry - Disposal Rules |
- Regulation V (FCRA- Fair Credit Reporting Act)
- Regulation P (GLB- Graham-Leach Bliley) - Mortgage Assistance Relief Services - Telephone Communication Protection Act |
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MARS (__________):
• Rules for loan modification companies • In a loan modification a borrower can add their _______ due payments and _______ fees to their principal balance. – The modification company cannot add any ________ fees to the borrower’s principal. • Cannot prevent borrower from contacting their lender or loan servicer |
Mortgage Assistance Relief Services
- past, legal - late fees |
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FCRA (Fair Credit Reporting Act):
• Regulation ____, 1971 • Oversight is provided by the FTC • Established to make sure that companies ___________ your ___________ in an accurate and timely fashion • Requires that you have ___________ purpose to pull credit: – e.g. _____________ or ______________ • Consumers can ____ ____ to stop receiving prescreened credit offers for ____ years |
- Regulation V
- Report your credit - Permissible, court order or verbal - Opt out, 5 years |
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FACTA (Fair & Accurate Credit Transaction Act)
- Amended ________ in 2003 • Help consumers ______________________ • Help consumers ______________________ • Provided access to ___ free credit report per ___________ per ____________ • Requires __________ of credit scores and ____ factors to consumers applying for home loans – Notice to the ________ ________ Applicant • Consumer can add a ________ ________ to their credit report if they suspect to be a victim of ______ or ______ theft. |
- FCRA (regulation V)
- fight identity theft - prove credit resolution - one, per year per agency - disclosures, key - home loan - fraud alert, fraud or identity theft |
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Red Flags:
• Amended Reg ____ in 2008 to force companies to implement written procedures to spot _________ attempts and account fraud. |
- V (FCRA), identity theft
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Red Flags (Amended Reg V- FCRA- in 2008)
• Suspicious _________ would describe your credit card being used in a way that is not consistent with your established patterns of activity • Suspicious __________ would describe not being able to provide authenticating answers to challenge questions |
- Account activity
- Identifying information |
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Graham-Leach Bliley-
• Regulation ____, 1999 • Oversight is provided by the __ __ __ • Purpose was to ensure that companies protect consumer and customer NPI: _______ _______ ________ • Customers can ____ ____ from companies sharing their NPI for ___-joint marketing • When a company changes their ______ _______ they have to notify their customers within __ ________ ________ ___ ______. • ___ ________ is impersonating something else to unlawfully gain someone’s NPI |
- Regulation P
- FTC (Federal Trade Commission) - Nonpublic Personal Information - opt out, non-joint marketing - privacy policy, a reasonable amount of time - Pre-texting |
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FTC Disposal Rules:
• Customer information must be 1. __________ 2. __________ 3. __________ • Electronic storage must be ________________ _______________________. • Old reports must be __________ __________. • It is not ok to place customer information in the _____ _____ or __________. |
- Burned, shredded, and/or pulverized
- Destroyed to the point it cannot be reconstructed - Routinely destroyed - Trash can or dumpster |
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TCPA/DNC:
• Monitored by the ______ • Consumers stay on DNC ______________. • 30 ________________________________ • 31 ________________________________ • 90 ________________________________ • 18 ________________________________ • 2 ________________________________ • 16 ________________________________ |
- Monitored by the FTC
- FOREVER - 30 Add customers to the internal list upon request - 31 Routinely update the internal list to national list - 90 days To call someone who applied - 18 months in which you may recontact a closed client - 2 years kept for phone records - $16000 penalty for violations! |
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BSA (Bank Secrecy Act):
• Financial Institutions must report suspicious transactions: – Funds derived from illegal activity – Is designed to evade the BSA – Transaction has no lawful purpose – Uses a financial institution to facilitate criminal activity • Notification of suspected fraud is filed using a (SAR), ________ ________ ________. – An employee cannot be _______ for filing a SAR. |
- Suspicious activity Report
- Fired |
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What is an ABA?
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An "Affiliated Business Arrangement"
An ABA exists when one company owns or has at least 1% controlling interest or ownership in the company receiving the referral |
