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Laws & Regulations
Acronyms
Definitions
General Mortgage
Loan Fees, Rules, Disclosures
100

What federal statute primarily serves to control the settlement costs of residential mortgage loans? 

RESPA (Real Estate Settlement Procedures Act)

100

What does the acronym APR mean?  

Annual Percentage Rate

100

What is a basis point? 

a percentage of the loan amount

100

An annual escrow analysis is used to accomplish what?

Prevent Escrow Overages

100

How many days do you have to send a borrower an updated Loan Estimate or Closing Disclosure after a changed circumstance (i.e. loan amount change) 

3 days 

200

What is the penalty for paying or accepting an illegal referral fee? 

$10,000 or up to one year in prison. 

200
What does FHA stand for? 

Federal Housing Administration (An agency of the U.S. department of Housing and Urban Development HUD. Its main activity is the insuring of residential mortgage loans made by private lenders)  

200

A loan that is not underwritten to Fannie Mae and Freddie Mac's guidelines is considered to be 

A non conforming loan 

200

Why are FHA loans beneficial to lenders? 

They are insured by the Federal Government 

200
When must a borrower receive a copy of the their appraisal report? 

At least 3 days prior to closing, unless an Appraisal Waiver is obtained. 

300

Mr. Jones's loan application has been denied and he is provided with an Adverse Action notice as required by ECOA. What piece of information would not be included on the notice? 

Credit Score 

300

What does HOA stand for? 

Homeowner's Association 

300

A disclosure form that went into effect on October 3, 2015, which provides a borrower with the estimated interest rate, monthly payment, and total closing costs for the loan. Lenders must provide this disclosure to applicants for loans within 3 business days of receiving the loan application 

Loan Estimate 

300

This refinance transaction is one in which the funds that the borrower receives from the new loan exceeds the funds needed to repay the existing first mortgage. 

Cash-Out Refinance

300

What is the max percentage of fees that can be applied to a qualified mortgage (QM)?

3%

400
Under the Fair Credit Reporting Act, this entity has the burden of protecting a consumer's privacy when his credit information is being reported

Credit Reporting Agency

400

What does HELOC stand for? 

Home Equity Line of Credit 

400

A loan for an amount that exceeds the conforming loan limits established by Fannie Mae and Freddie Mac 

A Jumbo Loan 

400

When does PMI automatically cancel on a conventional loan? 

78%

400

What is a ___ accuracy tolerance for amounts stated on the Loan Estimate and the actual closing cost if the consumer is allowed to shop for her own settlement service provider. 

10% 

500

This federal law governs how consumer reporting agencies (CRAs) use an individual's credit information and requires CRAs to follow reasonable procedures to protect the confidentiality, accuracy, and use of credit information. 

Fair Credit Reporting Act (FCRA)

500

The acronym "PFC" stands for

Prepaid Finance Charge

500
A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest due. The amount of shortfall is added to the remaining balance which causes the borrower to owe more money. 

Negative Amortization 

500

A ___ is a loan with an interest rate that is adjustable and also offers a borrower a number of payment choices, such as a 30 or 15 year P&I, interest-only, or a 1% minimum payment, which may result in negative amortization. 

Adjustable Rate Mortgage (ARM) 

500

If the APR increases by more than .125% in the loan file, what must occur? 

A new disclosure must be sent to the borrower within 3 days. There will also be a 3 day waiting period before closing can occur.