Federal Laws and Regulations Flashcards

Under the SAFE Act, a mortgage loan originator who moves from a bank to a non-bank entity must:

Answer: Obtain a state MLO license through NMLS

Bank employees are federally registered, but when moving to a non-bank, they must obtain a state license through the NMLS under the SAFE Act.

Which rule requires lenders to provide a Loan Estimate within three business days of receiving a completed mortgage application?

Answer: TILA-RESPA Integrated Disclosure (TRID)

TRID, effective 2015, requires a Loan Estimate to be delivered within three business days of a completed application.

A mortgage servicer must acknowledge a borrower's written qualified written request (QWR) within how many business days?

Answer: 5 business days

Under RESPA, servicers must acknowledge a QWR within 5 business days and resolve it within 30 business days.

The Community Reinvestment Act (CRA) was enacted primarily to address:

Answer: Redlining and exclusion of low-income communities from credit

The CRA was passed in 1977 to combat redlining and encourage banks to serve low- and moderate-income areas.

Under Regulation Z, which disclosure must be provided at least three business days before consummation of a mortgage loan?

Answer: Closing Disclosure

The Closing Disclosure must be provided at least three business days before the loan closes, giving borrowers time to review final terms.

Which federal rule limits prepayment penalty periods for qualified mortgages?

Answer: Dodd-Frank ATR/QM rule

The Dodd-Frank ATR/QM rule restricts prepayment penalties on qualified mortgages to the first three years and caps their amount.

A lender charges a borrower a fee for a credit report but keeps the overage rather than applying it toward costs. This most likely violates:

Answer: RESPA Section 8

RESPA Section 8 prohibits unearned fee arrangements, which includes pocketing overages from third-party service charges.