Federal Mortgage Laws
Under ECOA, when must a borrower receive a Notice of Action Taken?
Within 30 days.
What is a HELOC?
Home Equity Line of Credit (open-end).
When is the Closing Disclosure due?
At least 3 business days before closing.
What is mortgage fraud?
Intentional misrepresentation for loan approval or profit.
What does SAFE stand for?
Secure and Fair Enforcement Act.
What’s the APR tolerance for a regular transaction under TILA?
1/8 of 1% (0.125%)
What is the different between MIP and PMI?
MIP is for FHA while PMI is for conventional.
What is steering?
Directing borrowers to less favorable loan products.
What’s a straw buyer?
Someone whose name and credit are used to obtain a loan for another party.
What is required annual continuing education?
8 hours.
What federal law prohibits kickbacks and referral fees?
RESPA (Regulation X).
What’s the FHA loan down payment minimum with 500–579 credit?
10%.
A borrower earns $4,000/month and has a $1,000 housing payment. What’s the front-end ratio?
25% ($1,000/$4,000)
What’s air loan fraud?
Loan on fictitious property or borrower.
How often must MLOs renew licenses?
Annually.
What is the MAP Rule (Regulation N)?
Prohibits deceptive mortgage advertising.
What’s the VA funding fee % for first-time use with no down payment?
2.3%.
Borrower has $5,000/month income, $1,200 housing payment, $600 debts. What’s back-end DTI?
36%. ($1200 + $600)/$5,000 = 36%
Yield spread premiums are:
Now known as borrower credits, and may only be used to help the borrower pay closing costs
An originator’s unique identifier must be shown on all but which of the following documents?
A.Business signage
B.Mortgage loan applications
C.Advertisements
D.Business cards
A. Business Signage
What is Section 32 of TILA also known as?
HOEPA (Home Ownership and Equity Protection Act).
What is the maximum seller concession on conventional loans with 10%+ down?
Maximum seller concessions are 6% if the LTV<90%. (3% if LTV>90%)
What are the 6 items making up an application under RESPA?
Name, SSN, income, property address, estimated value, loan amount.
If a consumer feels that they were discriminated against under the Fair Housing Act, they have ____ year(s) to file a complaint with ______
1 Year; HUD (Dep. Housing and Urban Development)
According to the SAFE Act definition, a nontraditional mortgage loan is:
Any mortgage loan that is not a 30-year fixed-rate mortgage loan