Federal Laws
Andy is purchasing a new home. His closing is on Monday, December 22nd. What date will the loan get funded?
December 22nd (there is no rescission since it is not a refinance)
On the Closing Disclosure, what is the tolerance for Box C?
10%
Describe the Successive Year Rule:
can’t take the same CE course back to back years
When must a creditor "decision" a file?
What is the basic entitlement for a VA loan?
$36,000
CIPs were made mandatory as a result of which act?
PATRIOT Act
How long do you keep records of complaints on file under ECOA?
25 months
What 2 organizations came together to create the NMLSR
CSBS + AARMR
To comply with Reg C, what report must be sent annually on March 1st?
Loan Application Register
Which loan requires a certificate of reasonable value (CRV)?
VA Loan
What 3 disclosures must be sent within 3 business days of a completed application?
1. loan estimate
2. Your Home Loan Toolkit
3. List of HUD Counselors (10+)
What information is required for a compete application?
Address, Loan Amount, Income, Estimate of Value, Name, SSN/TIN
(A.L.I.E.N.S)
If an MLO is compensated by increasing the rate on a loan, what regulation have they violated?
Reg Z
What rule addresses that discrepancies in address and change of address requests need to be verified?
Section 114 of FACTA: Red Flags Rule
Which loans require you to have counseling?
(hint: there are 2)
FHA HECM and if 1st time loan is a HOEPA
Explain the 3/7/3 Rule:
3: Initial disclosures must be sent at or within 3 business days of application
7: fastest consummation may occur is on the 7th business day after receipt of an LE
3: Waiting period of 3 business days from receipt of CD to closing
Explain what a 3/2/6 ARM cap means:
First #: worst case first increase (3%)
Middle #: max increase at each other adjustment (2%)
Last #: worst case lifetime increase (6%)
Craig is a registered MLO at a financial institution. He discusses rates and terms with Tiffany in person. What reg has he violated?
none
What does the CRA do and what year was it established?
Banks receive bonuses for not redlining.
1977
Which loan is considered a non-recourse loan?
FHA HECM / Reverse Mortgage
What causes the 3 day waiting period to reset after sending a new CD?
APR increases by .125% or more, Prepayment Penalty added, program changes
Explain the 4 steps of an acceleration clause after payment default:
1. Lender must contact borrower by day 36 of being late
2. Must offer a loan modification by day 45 of being late
3. Fastest a lender can accelerate (foreclose) is a full 120 days late
4. If HUD counseling requested by borrower ---> immediate 90 day freeze on the process
What are the 4 categories of pre-licensing and continuing education?
Federal Law
Ethics
Non-traditional mortgage products
Electives
What are the 3 reasons a consumer can have free access to their credit report?
Victim of ID theft or fraud.
On public assistance or unemployment.
Within 60 days of an Adverse Action Notice (AAN)
Name the 4 prohibited HOEPA loan terms:
No prepayment penalty after 2 years
No negative amortization
No demand clause