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13 Cards in this Set
- Front
- Back
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Gramm Leach Bliley Act
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Put restrictions on use of borrower's info for financial institutions and requires disclosures before sharing or selling info The notice as to whether or not you share their non public personal info (NPI) must be given at time of app. If you sell info, they get opt out notice. If you don't they get a short form notice that states so. If the info is shared after initial disclosure was, a revised notice must be sent to opt out All financial institutions must have written safeguard plan in place to protect client's NPI and must be technical, physical, and administrative (FACTA and Red Flag Plan) |
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Pretexting
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The use of false pretenses to obtain a person's personal financial info (impersonating them over the phone) |
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Patriot Act
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Used to stop money laundering for terrorists Enforced by FinCEN part of Treasury dept (Financial Crimes Enforcement Network) |
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CIP
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Name, DOB, Addr, ID# (social, passport, etc) Must check OFAC status (Office of Foreign Assets Control) Records must be kept for 5 years, $1 mil fine for failure to comply Must submit SAR to FinCEN if anything suspicious is going on |
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Telemarketing Rules/Telephone Consumer Protection Act |
Consumers can be on Do Not Call list and is permanent unless they request to be taken off $16,000 fine for calling someone on list, must keep records for 2 years Can be called internally 90 days after app, 18 months from transaction, or with customer agreement. If they don't want to be called, you have 30 days to comply and list must be scrubbed against DNC list every 31 days |
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MARS
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Anything that assists consumer with stopping/preventing/postponing/saving dwelling from foreclosure, negotiating/obtaining/arranging a modification, obtaining any forbearance Violations include: charging a client prior to getting a signed written agreement between consumer and lender, telling a client not to contact their lender, misrepresenting anything |
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Reg B Rec C Reg X Reg Z Reg V |
ECOA HMDA RESPA TILA FCRA |
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Timelines for document retention
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TCPA-2 years RESPA-5 years Pat Act-5 years ECOA-25 months ATR/LAR (HMDA Reg C), TILA (loan estimate form, closing disclosure, MLO comp)- 3 years |
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Nontraditional Mortgage Products/Guidance on Subprime Loans
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Anything other than 30 year fixed Nontraditional mortgage products from subprime era (exotic loans) include interest only, non income non asset (NINA) loan, stated income stated asset (SISA) loan, pay option ARM (30 yr, 15 yr, int only, min pmt-negative amort) The guidance is basically underwriting |
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Risk Layering
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Relaxing more than one of the traditional UW standards (no income verification, not escrowing for taxes and ins doing a stated value, no docs, high LTV)
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Ethics/Predatory Lending/Fraud
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Steering-pushing a client into products they don't need to benefit your wallet Packing-putting unrelated and unnecessary insurance on loan and causing borrower to pay for it from proceeds Reporting fraud: HUD inspector general on Govie loans, FBI for all other |
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Fraud Schemes
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Straw buyer-person who is used as cover to hide the true identity of buyer (parents for kids) Loan flipping-giving the borrower a loan with no net tangible benefit Property flipping-usually involves an appraiser and group of people who buy and resell to each other at inflated prices and ultimately to another poor person (Chunking) Air Loan-loan on a fictitious home that does not exist on land Shotgunning-renting someone's home/having them release title to you and then do multiple loans on the property with multiple lenders at the same time |
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