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28 Cards in this Set
- Front
- Back
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What does RESPA stand for and what regulation is associated with it?
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Real Estate Settlement Procedures Act. Regulation X
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Why was RESPA enacted?
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To allow consumers to obtain info on the costs of closing via mandatory disclosures, and to protect consumers from excessive costs and fees by establishing prohibitied practices to protect consumers.
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Who is responsible for enforcing RESPA and implementing Regulation X?
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The Department of Housing and Urban Development (HUD)
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What are the mandatory disclosures required by RESPA?
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GFE, Settlment Cost Booklet (purchases), Mortgage Servicing Statement, Affiliated Business Arrangement, HUD-1 (Due at closing)
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What are lending practices prohibited by RESPA?
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Giving or accepting referal fees, kickbacks, or "things of value" unless an appropriate amount of work was performed to earn the fee.
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What does ECOA stand for and what regulation is associated with it?
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Equal Credit Opportunity Act. Regulation B
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Why was ECOA enacted?
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To eliminate discriminatory treatment of loan applicants.
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Who enforces ECOA/Regulation B?
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Those employed by financial institutions are supervised by Federal Banking Agencies. Those that are not (brokers) are supervised by the Federal Trade Commission (FTC)
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What are the disclosures required by ECOA?
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Notice of Action Taken (due within 30 days of app), right to receive appraisal report, notice of incomplete app (due within 30 days of app taken)
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What does TILA stand for and what regulation is associated with it?
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Truth In Lending Act. Regulation Z
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What is the purpose of TILA?
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To disclose the costs and terms of credit, make sure that advertising for credit is truthful and not misleading, and to provide borrowers with a right to rescind certain loan transactions.
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Who enforces TILA/Regulation Z?
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The Board of Governors for the Federal Reserve (The Board), However FTC regulates Mortgage brokers, banks, and credit unions.
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The TIL Disclosure statement must be re-disclosed to the borrower before closing if what?
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If the interest rate varies by more than 1/8th of a percent (.125%)
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What was the Final Rule issued by the Federal Reserve as part of regulation Z in 2011?
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Mortgage Professionals are no longer allowed to receive compensation via Yield Spread Premium, and must instead use the funds as borrower credits towards closing costs.
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How long is the rescission period after the loan closes? How long is it if the borrower did not receive a notice of the Right to Rescind or an accurate TIL statement?
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The normal rescission period is 3 days after signing. However if the Notice of Right to Rescind or the TIL were not disclosed, the rescission period is 3 years after signing
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How does TILA and Regulation Z affect advertising requirements?
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It prohibits the promotion of attractive lending terms without disclosing the catch. Whenever a "trigger term" is used, such as low monthly payments or no cost, all other less attractive terms must be presented as well so as not to be misleading. Most advertisments for closed-end loans must disclose APR
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What does HOEPA stand for and what regulation is associated with it?
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Home Ownership and Equity Protection Act. Set forth under Regulation Z and TILA.
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Why was HOEPA enacted?
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To create protections for loans with high interest rates and high fees.
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What loans does HOEPA apply to?
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Loans with an interest rate that is 8 points above the treasury securities, or with fees that are more than 8% of the loan amount, or $611
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Under the Homeowners Protection Act (HPA), when is a borrower allowed to cancel PMI and when is it automatically cancelled?
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Borrowers are allowed to cancel PMI when they reach 20% equity (80% LTV). If they do not, it is automatically cancelled when 22% equity is reached (78% LTV)
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What Does SAFE stand for and what does the act do?
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Secure And Fair Enforcement. The SAFE Act requires mortgage professionals to register and become licensed through NMLS.
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What does HMDA stand for and what regulation is associated with it.
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Home Mortgage Disclosure Act. Regulation C
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What is the purpose of HMDA?
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HMDA is a reporting law that helps the government identify discriminatory lending practices, among other things. It gathers info about the loan to compare with other loans in order to see if better deals are being given to certain groups of people based on ethnicity or sex
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What does FCRA stand for an why was it enacted?
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Fair Credit Reporting Act. To ensure the accuracy, fairness, and privacy of consumers’
personal information that is assembled and used by CRAs |
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What does GLB stand for and why was it enacted?
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Gramm-Leach-Bliley Act. To ensure that financial institutions protect the personal information of consumers. Financial Institutions are required to disclose privacy notices if they plan to share their personal information with 3rd party companies.
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What is the Safeguards Rule?
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A law requiring all financial institutions to have a security program that meet the Safeguards Rule requirements in order to protect personal information.
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What does FACTA stand for and why was it enacted?
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Fair and Accurate Credit Transactions Act. Creates additional obligations required by CRAs and mortgage professionals to prevent identity theft and improve the accuracy of
consumer reports. |
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What is the FTC Red Flags Rule and how is it different from the Safeguards Rule?
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The Red Flags Rule was enacted to prevent the release of personal
financial information. The difference between this and the Safeguards Rule is that the Safeguards Rule focuses on securing personal information, while the Red Flags Rule focuses on detecting a security breach. |
