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
A mortgage broker receives a yield spread premium (YSP) tied to placing a borrower in a higher-rate loan. Under CFPB LO compensation rules, this practice is:
Answer: Prohibited as a form of steering
CFPB's loan originator compensation rules prohibit compensation that varies based on a loan's interest rate or other terms, eliminating rate-based YSPs.
Which federal statute requires lenders to disclose the transfer of mortgage servicing rights to borrowers?
Answer: RESPA
RESPA requires servicing transfer disclosures at application and mandates 15-day advance notice to borrowers before a servicing transfer occurs.
Under the Home Ownership and Equity Protection Act (HOEPA), loans exceeding the rate or fee thresholds are subject to:
Answer: Enhanced disclosures and restrictions on loan terms
HOEPA-covered loans trigger additional disclosures and restrictions on balloon payments, prepayment penalties, and negative amortization.
Under Regulation X's 2014 servicing rules, servicers must make live contact with delinquent borrowers by the:
Answer: 36th day of delinquency
The 2014 RESPA servicing rules require servicers to make live contact with delinquent borrowers by the 36th day of delinquency to discuss loss mitigation options.
Under ECOA, a lender must provide an adverse action notice within how many days of a credit decision?
Answer: 30 days
ECOA and Regulation B require lenders to notify applicants of adverse actions within 30 days of receiving a completed application.
Which provision of the Dodd-Frank Act created the Ability-to-Repay and Qualified Mortgage standards?
Answer: Section 1411 — ATR and QM Standards
Dodd-Frank Section 1411 amended TILA to establish the Ability-to-Repay requirement and authorized the CFPB to define Qualified Mortgage standards.
Under TILA, discount points paid by the borrower to reduce the interest rate are classified as:
Answer: Finance charges included in the APR calculation
Discount points are prepaid interest and therefore finance charges that must be included in the APR calculation under TILA.