Federal Mortgage-Related Laws 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 Mortgage-Related Laws flashcards as text
Under RESPA, within how many business days must a lender provide a Loan Estimate to a borrower after receiving a completed loan application?
Answer: 3 business days
RESPA (as implemented by TRID) requires lenders to deliver the Loan Estimate within 3 business days of receiving a completed loan application.
Which federal law prohibits lenders from paying referral fees or kickbacks to settlement service providers for referring business?
Answer: RESPA
RESPA Section 8 specifically prohibits kickbacks and unearned fee arrangements between settlement service providers.
The Closing Disclosure required under TRID must be provided to the borrower no later than how many business days before consummation?
Answer: 3 business days
TRID rules require the Closing Disclosure to be received by the borrower at least 3 business days before loan consummation.
RESPA's Section 10 limits the amount a lender can require a borrower to deposit into an escrow account. What is the maximum cushion allowed?
Answer: Two months' escrow payments
RESPA Section 10 allows a maximum escrow cushion of two months' worth of escrow payments.
Under TILA, what is the right of rescission period for a refinance of a primary residence with a new lender?
Answer: 3 business days
TILA grants borrowers a 3-business-day right of rescission for non-purchase refinance transactions secured by their primary residence.
Which statement about RESPA's affiliated business arrangement (AfBA) disclosure is correct?
Answer: Lenders must provide an AfBA disclosure and cannot mandate use of the affiliated provider
RESPA requires an AfBA disclosure when referring to affiliated settlement service providers, and lenders may not compel the borrower to use them.
A borrower's annual percentage rate (APR) exceeds the stated interest rate on a fixed-rate mortgage primarily because the APR includes:
Answer: Certain fees and costs in addition to the interest rate
APR, as disclosed under TILA, incorporates the interest rate plus certain fees and costs, giving a broader measure of borrowing cost.