Mortgage Mortgage Federal Mortgage-Related Laws Questions and Answers 2

Question 1

Under the Equal Credit Opportunity Act (ECOA), which factor may a lender legally consider when evaluating a mortgage application?

Accepted Answer

Applicant's income and employment history

Answer

Applicant's race

Answer

Applicant's marital status

Answer

Applicant's national origin

Question 2

What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?

Accepted Answer

To require lenders to report lending data for fair lending analysis

Answer

To set maximum interest rates on mortgages

Answer

To establish minimum down payment requirements

Answer

To regulate mortgage servicer escrow accounts

Question 3

Under RESPA, which of the following is prohibited?

Accepted Answer

Paying or receiving kickbacks for referrals of settlement services

Answer

Charging a loan origination fee

Answer

Requiring an escrow account for taxes and insurance

Answer

Providing a Loan Estimate within three business days

Question 4

The Homeowners Protection Act (HPA) of 1998 primarily addresses which borrower concern?

Accepted Answer

Automatic termination of private mortgage insurance (PMI)

Answer

Predatory lending practices

Answer

Disclosure of adjustable-rate mortgage terms

Answer

Protection against foreclosure during natural disasters

Question 5

Which federal law requires lenders to provide borrowers with a Loan Estimate within three business days of receiving a mortgage application?

Accepted Answer

TILA-RESPA Integrated Disclosure (TRID) rule

Answer

Truth in Lending Act (TILA)

Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Fair Housing Act

Question 6

Under the Fair Housing Act, which of the following actions by a mortgage lender would constitute illegal discrimination?

Accepted Answer

Refusing to lend in a neighborhood based on its racial composition

Answer

Denying a loan due to insufficient collateral value

Answer

Offering a higher interest rate to a borrower with a low credit score

Answer

Requiring flood insurance in a FEMA-designated flood zone