Practice Test GeeksMortgage Practice Test
← All Mortgage Flashcard Decks

Federal Laws and Regulations Flashcards

7 cards from real Mortgage practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Federal Laws and Regulations flashcards as text

  1. Under the Ability-to-Repay (ATR) rule, a lender must verify a borrower's income using:

    Answer: Reasonably reliable third-party records

    The ATR rule requires lenders to verify financial information using reasonably reliable third-party records such as tax returns, W-2s, and bank statements.

  2. The Servicemembers Civil Relief Act (SCRA) limits mortgage interest rates for active-duty servicemembers to a maximum of:

    Answer: 6%

    The SCRA caps mortgage interest rates at 6% per year for obligations incurred before active-duty military service.

  3. A lender requires a borrower to use a specific title company owned by the lender's affiliate. Under RESPA, this is permissible only if:

    Answer: An affiliated business arrangement (AfBA) disclosure is provided and use is not required

    RESPA allows affiliated business arrangements only when the lender provides a written disclosure and does not require use of the affiliate.

  4. Under TILA, the Annual Percentage Rate (APR) differs from the interest rate because it includes:

    Answer: Certain fees and costs of credit

    The APR reflects the true cost of borrowing by incorporating the interest rate plus certain fees such as points and origination charges.

  5. Which act prohibits lenders from discriminating based on a neighborhood's racial composition, a practice known as redlining?

    Answer: Fair Housing Act

    The Fair Housing Act of 1968 prohibits discrimination in residential real estate transactions, including redlining based on neighborhood racial composition.

  6. FIRREA was enacted primarily in response to:

    Answer: The savings and loan crisis of the 1980s

    FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act) was passed in 1989 to address widespread savings and loan association failures.

  7. Under HMDA, which institution is generally required to report mortgage data?

    Answer: Covered financial institutions meeting asset and location thresholds

    HMDA applies to covered financial institutions that meet certain asset size, location, and loan volume thresholds established by the CFPB.