Federal Laws
What does TILA Reg Z require lenders to disclose?
The cost of credit, including APR and finance charges.
When must the Loan Estimate be delivered?
Within 3 business days of receiving a completed application.
What is steering in mortgage lending?
Directing a borrower toward a less favorable product for compensation.
What is a QM loan?
A Qualified Mortgage that meets Ability-to-Repay and fee limits.
Who oversees the NMLS system?
The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).
What is the purpose of RESPA Reg X?
To prevent kickbacks and ensure consumers understand closing costs.
When is the Closing Disclosure due to the borrower?
At least 3 business days before consummation.
What is an example of misrepresentation?
Falsifying income or employment on an application.
What program allows 0% down for veterans?
The VA Loan Program.
What type of loan is not covered under RESPA?
Commercial or business-purpose loans.
Name one required disclosure under ECOA Reg B.
Notice of Action Taken or Right to Receive a Copy of Appraisal.
What is the 3/7/3 Rule?
Initial disclosures within 3 days, wait 7 days to close, and 3 more days if changes occur.
Define “bait and switch.”
Advertising low terms, then switching to worse ones during application.
What’s the key difference between FHA and conventional?
FHA is government-backed; conventional is not.
How is APR different from interest/note rate?
APR includes fees; note rate is just interest.
What law mandates privacy notices to consumers?
Gramm-Leach-Bliley Act (GLBA) – Regulation P.
How long must Loan Estimates be retained?
3 years from the date of disclosure.
What is prohibited under the SAFE Act’s ethics requirements?
Fraud, misrepresentation, and omission of material facts.
What’s a 203(k) loan?
An FHA loan that includes funds for home repairs or renovations.
What is the formula for LTV?
Loan Amount ÷ Appraised Value or Purchase Price (whichever is lower).
What law requires lenders to collect demographic data?
HMDA – Regulation C
What triggers a new 3-day CD waiting period?
APR increases beyond tolerance, loan product change, or prepayment penalty added.
How would a straw buyer be used in fraud?
Using another person’s identity to obtain a mortgage fraudulently.
What is the max DTI allowed for a QM loan?
43%
Regulation Z covers what Act and information?
TILA (1968) Promotes consumer credit use by requiring disclosures about terms and cost of credit.