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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

  1. Under TILA, the Annual Percentage Rate (APR) must be disclosed to within how many basis points for a regular mortgage transaction?

    Answer: 1/8 of 1% (12.5 bps)

    For regular mortgage transactions, TILA requires the APR to be accurate within 1/8 of 1 percentage point (0.125%).

  2. Which regulation implements the Real Estate Settlement Procedures Act (RESPA)?

    Answer: Regulation X

    Regulation X is the Federal Reserve/CFPB regulation that implements RESPA, governing settlement services and disclosures.

  3. A lender requires a borrower to use a specific title company affiliated with the lender without disclosing the relationship. This most likely violates:

    Answer: RESPA's affiliated business arrangement disclosure requirements

    RESPA requires lenders to disclose affiliated business arrangements and prohibits mandatory use of affiliated settlement service providers.

  4. Under the SAFE Act, a state-licensed mortgage loan originator must pass a national test with a minimum score of:

    Answer: 75%

    The SAFE Act requires MLOs to pass the NMLS national test with a minimum score of 75% to obtain licensure.

  5. HOEPA (Home Ownership and Equity Protection Act) applies to which type of mortgage loans?

    Answer: High-cost home loans exceeding APR and points/fees thresholds

    HOEPA triggers when a loan's APR or points and fees exceed specific thresholds, classifying it as a high-cost mortgage with additional consumer protections.

  6. Under TRID, the Closing Disclosure must be received by the borrower at least how many business days before consummation?

    Answer: 3 business days

    TRID requires borrowers to receive the Closing Disclosure at least three business days before the loan closes.

  7. Which act requires federally chartered depository institutions to meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods?

    Answer: Community Reinvestment Act (CRA)

    The CRA of 1977 requires banks to serve the credit needs of entire communities, including LMI areas, and regulators examine and rate CRA performance.