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41 Cards in this Set
- Front
- Back
Truth in Lending Act (TILA) |
was originally enacted in 1968 and has been amended several times since the original enactment. Was implemented by Regulation Z and set forth by the Board of Governors of the Federal Reserve. |
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Truth in Lending Act (TILA) |
is part of the Consumer Credit Protection Act, and is intended to "assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit." |
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Business Day |
any day except Sunday's and legal public holidays. |
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Dwelling |
a residential structure which contains between one and four units. |
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Consumer |
a natural person who borrows money and offers a security interest in their primary residence as collateral for the loan. |
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Consumer Credit |
credit offered to consumers, for personal, family, or household purposes. |
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Consummation |
The point at which a consumer becomes obligated on a credit transaction. |
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Residential Mortgage Transaction |
a transaction in which a consumer gives a security interest as security, for a loan in the consumer's principal dwelling to finance the acquisition or initial construction of the dwelling. |
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Finance Charges |
the costs of obtaining credit paid by the consumer. |
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Prepaid Finance Charges |
charges which are paid separately before or at the time of consummation or which are withheld from the proceeds of the loan. |
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APR |
The purpose of an _____ is to factor the closing costs charged into the interest rate charged. |
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The form entitled "Itemization of Amount Financed" |
contains a list of the finance charges, that are listed as prepaid finance charges. |
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Closing Costs which do NOT affect the APR calculation: |
- Title Insurance - Escrows for taxes and insurance - Notary fees - Appraisal fees - Termite inspection fees - Credit report charges
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Closing costs which are considered prepaid finance charges and ARE included in the APR calculation: |
- Origination fees - Discount points - Tax service fees - Underwriting fees - Processing fees - Prepaid/per diem interest - Mortgage insurance premium - Mortgage insurance impounds/reserves - Warehouse fees - VA funding fees - FHA UFMIP - Buydown - Flood certification fees - Closing fees - Courier fees (lender) |
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Per Diem Interest |
the pro-rated amount of interest due for remaining days in a month. |
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APR |
a shopping tool for borrowers to allow borrowers to easily compare lenders. |
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the amount financed |
The loan amount less the prepaid finance charges equals __________________________. |
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APR |
Whenever an advertisement contains an interest rate, the advertisement must also contain an _____. |
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interest rate |
For print advertising, the TILA requires the APR to be at least as conspicuous as the ____________________. |
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TILA Trigger Terms |
- The amount or percentage of any down payment - The number of payments or period of repayment - The amount of any payment - The amount of any finance charge |
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Additional disclosures if trigger terms are used in advertising (TILA) |
- The amount or percentage of the down payment - The terms of repayment - The annual percentage rate (APR) including any variable rate features |
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Regulation B |
Also known as ECOA (Equal Credit Opportunity Act) |
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What types of loans are exempt from RESPA |
- Business or commercial - Loans to government entities - Construction Only loans - Loans for large tracts of land - Loans for vacant lots - Certain loan assumptions |
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The four "C"s of a person's credit score: |
- Character - Capacity - Capital - Collateral |
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FHA, Title 2, Section 255 Loans |
- Reverse mortgage (HECM) - 2% M.I.P (Mortgage Insurance Premium) required - Must be 62 or older to qualify
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Covered Account |
(1) an account, primarily for personal, family or household purposes, that involves or is designed to permit multiple payments or transactions, or
(2) any other account for which there is a reasonably foreseeable risk to customers, or the safety and soundness of the financial institution or creditor from identity theft. |
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Four things that make up a credit score |
(1) Payment History (35%) (2) Available Credit (30-35%) (3) Credit History (10-15%) (4) Inquiries (10%)
P.A.C.I. |
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Dodd-Frank Requirements |
- No steering borrowers - NMLS # must be on all loan docs - May not grant loan without consideration of borrower's ability to repay |
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FACTA |
- Fair and Accurate Credit Transactions Act - Amendment to FCRA in 2003 - Provides addition identity protection measures
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FHA 203K |
- Properties needing at least $5k of rehab work - 1-4 unit owner-occupied - Fixed rate ONLY - AKA "Streamline K" |
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FHA 234C |
Condo loans |
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FHA 245A |
- Graduated Mortgages - Single family homes - Requires larger down payment - Upfront and annual M.I. (Mortgage Insurance) |
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FHA, Title II, Section 251Loans |
- A.R.M. (Adjustable Rate Mortgage) - Allows borrower to finance many of the loan costs |
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Graduated Mortgage Payment |
- Rate starts low - Rate increases over time - Rate levels off at predetermined point - Usually results in negative amortization
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HOEPA |
- AKA "TILA Section 32" - Regulates loans with high rates and fees - No balloon payments allowed - Not prepayment penalties - No D.O.D. (Due-on-Demand) Clause |
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TILA Section 32 |
HOEPA |
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P.I.H. |
- Public and Indian Housing - Federal loan guarantee program |
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RESPA Section 8 |
Prohibits undisclosed kick-backs (referral fees) |
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RESPA Section 9 |
Seller cannot require borrower to use a certain title company |
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RESPA Section 10 |
- Sets lender limits on ESCROW accounts - 1/12 annual total - Plus 1/6 as buffer |
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The purpose of the ECOA
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to promote the availability of credit to all creditworthy applicants without regard to: - race - color - religion - national origin - sex - marital status - or age (provided applicant has capacity to contract) |