Federal Lending 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 Lending Regulations flashcards as text
Under RESPA, what is the maximum tolerance for increases in third-party settlement charges in the 'zero tolerance' category?
Answer: 0%
Zero tolerance charges cannot increase at all from the Loan Estimate to the Closing Disclosure; any increase is a tolerance violation requiring a cure.
The Home Mortgage Disclosure Act (HMDA) primarily requires lenders to collect and report data to:
Answer: Identify possible discriminatory lending patterns
HMDA data is used by regulators and the public to identify fair lending issues and discriminatory patterns in mortgage lending.
Which federal law prohibits a lender from discriminating based on race, color, religion, national origin, sex, familial status, or disability in residential mortgage lending?
Answer: Fair Housing Act
The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) prohibits discrimination in residential real estate transactions including mortgage lending.
A lender charges a borrower a fee not disclosed on the Loan Estimate for a service the lender controls. Under TRID, this is most likely a violation of which tolerance category?
Answer: Zero tolerance — lender-controlled fees cannot increase
Fees for services provided by the lender or required services where the borrower cannot shop fall in the zero-tolerance category.
Under ECOA, within how many days must a creditor notify an applicant of action taken on a completed credit application?
Answer: 30 days
ECOA requires creditors to notify applicants of the credit decision within 30 days of receiving a completed application.
The Dodd-Frank Act created which agency specifically to protect consumers in financial transactions, including mortgages?
Answer: Consumer Financial Protection Bureau (CFPB)
The CFPB was established by the Dodd-Frank Act of 2010 and has primary authority to enforce federal consumer financial protection laws including mortgage regulations.
Under the Ability-to-Repay (ATR) rule, which of the following is NOT one of the eight underwriting factors a lender must consider?
Answer: Borrower's credit score tier preference
The eight ATR factors include income, assets, employment, payment amounts, debts, DTI, credit history, and alimony/child support — not a borrower's preferred credit score tier.