1. What are the 3 purposes of the TILA?
  2. 1. promote the informed use of credit by clearly disclosing terms & costs of credit
  3. 2. help consumers better compare the terms of loans offered by various creditors through early disclosures
  4. 3. provide consumers with the right to cancel (rescind) certain loans that involve liens on primary dwellings.
  5. What loan types of loan isn't covered in "high cost loan" definitiation?

    1)rules not cover loans to buy or build a home
    reverse mortgages or revolving home equity lines of credit

    2)refinancing and home equity installment loans
  6. 1)rules not cover loans to buy or build a home
    reverse mortgages or revolving home equity lines of credit
  7. What act is "High Cost Loans" under?
  8. The homeownership and Equity Protection Act (HOEPA)
  9. What is "cost trigger"?
  10. When the total points and fees payable by the consumer at or before closing
    exceed larger of $579 or 8% of the total loan amount.
  11. Under HOEPA disclosures if loan high cost trigger the borrowers need to receive the following 3 disclosures at least 3 busn day before closing:
  12. 1. A written notice stating that the loan need not be completed (3 busn days cooling period to decide whether to sign the Section 32 disclosure)
  13. 2. The notice must warn the borrower the creditor will have a mortgage on the home
  14. 3. lender must disclosure the APR
  15. High cost prohibited practices?
  16. 1. All ballon payment
  17. 2. negative amortization
  18. 3. default interest rate higher than pre-default rates
  19. 4. most prepayment penalties
  20. 5. a due on demand clause
  21. 6. refinance into another HOEPA loan within 12 months unless new loan is in the best interest of borrower
  22. 7. open-end loan (home equity line of credit)
  23. What is a Higher-priced mortgage loan?
  24. Any mortgage (purchased or non-purchase money) secured by a consumer's principal dwelling with an APR exceeding the "Average Prime Offer Rate" (APOR)
    on prime loans by at lest 1.5% points on 1st lien loans & 3.5% points on subordinate-lien loans.
  25. What does a "higher-priced mortgage loan" prohibited from?
  26. 1. engaging in a pattern & practice of relying on the collateral securing the loan without regard to the consumer's ability to repay the loan
  27. 2. relying on a consumer's income & assets without verifying such amounts through reasonable reliable third-party documents
  28. 3. imposing any pre-payment penalty if the consumer's payment can change in the 1st 4 years of the loan term.
  29. 4 originating 1st lien
    higher priced loans
  30. Who regulated the Homeowner Protection Act of 1998 (HPA)?
  31. Federal Reserve Board
  32. What loans aren't covered under the HPA?
  33. VA or FHA loans
  34. What 2 options do HPA provided on which PMI may be cancelled?
  35. 1. automatic termination: once 78% of original value of property is reach; borrower must be current in payment and lender must cancel coverage within 30 calendar days of automatic termination date
  36. 2. By Request: homeowner request cancellation of PMI once home reaches 80% ltv. lener is not required to honor request by law. will consider based upon pay history
    timeline or subordinate financing.
  37. When must servicer required by HPA to notify a cosumer of their rights? (3)
  38. 1. at closing closing & 2. on an annual basis
    servicer must disclose to the consumer their rights to request cancellation of PMI coverage
  39. 3. upon cancellation
    service must notice consumer in writing that PMI has been terminated & no further premiums are due
  40. Who regulated Truth in Lending (Reg Z)?
  41. Agency: board of governors of the Federal Reserve System (FRB)
  42. Enforecement Agency: Federal Trade Commission (FTC)
  43. What are Reg Z prohibited for ALL closed-end mortgage loans that are secured by the borrower's primary dwelling (2)?
  44. 1. creditors & mortgage brokers from
  45. 2. servicers from
    failing to credit a payment to the consumer's account as of date of its receipt; or failing to provide a payoff statement within a reasonable amount of time after a request. Frobids the "pyramiding" of late fees.
  46. What are prohibited under Reg Z for all closed-end mortgage loans secured by a dwelling
    not just principal residence?
  47. prohibit against misleading & deceptive advertising practices.
  48. 1. representing that an interest rate or payment is fixed when in fact
    it can change
  49. 2. advertisers provide accurate & balanced information in a "clear & conspicuous" manner
    about rates
  50. 3. specific requirements that advertisements state all applicable rates or payments with equal prominence and in close proximity to any "promotional"
    "teaser" or introductory rate or payment
  51. The Equal Credit Opportunity Act (ECOA) is Regulation___
    established in ___
  52. Regulation B
    in 1974
  53. The Fair Housing Act Act is Regulation___
    established in ___
  54. FHA is Title VIII
    1968 Civil Rights Act
  55. The Home Mortgage Disclosure Act is Regulation___
    established in ___
  56. Regulation C
  57. The Community Reinvestment Act is Regulation___
    established in ___
  58. regulation BB
  59. What is purpose of ECOA?
  60. provide the availability of credit to all without regard to color
    national origin
  61. Under ECOA
    creditors to notify applicants of action taken on thier application within ___ calendar days? (adverse action
  62. 30 days
  63. What are required under ECOA?
  64. 1. notice of actions..adverse
  65. 2. reporting credit history in the names of both spouses on an account
  66. 3. retention of records of credit applications (records must be retaind for a minimum of 24 months period; 25 can destroy)
  67. 4. collection of info about applicant's race & other personal characteristics
  68. 5. providing applicants with copies of appraisal reports used in connection with credit transactions
  69. Can FHA discriminated against AGE? ECOA?
  70. yes
    FHA can discriminated. ECOA can't discriminated against age.
  71. Can a creditor discourage application?
  72. No
    can't discourage people from applying for loan
  73. What can a creditor ask an application about & NOT ask about?
  74. Can ask: Martial Status;
  75. can't ask about alimony
    child support
  76. But is required to ask about the liabilities of alimony
    child support or separation maintenance; ask about applicant's permanent residence & immigration status
  77. What is the purpose of Home Mortgage Disclosure Act (HMDA)?
  78. To help determine if lenders are serving the housing needs of communities
    assist public officials with identifying possible discrimination patterns & enforce anti-discrimination practices.
  79. Lenders are required to publicly report their lending services available to the community
  80. Are certain mortgage brokers & mortgage bankers included in the HMDA reporting provisions?
  81. yes
    if mortgagee take more than 100 loan applications and make credit decisions on it.
  82. What is the purpose of the "Gramm-Leach-Bliley Act" (GLBA)?
  83. To protection consumer's personal financial information held by financial institutions including mortgage bankers
    mortgage brokers
  84. What are the 2 regulations under the GLBA act?
  85. The Financial Privacy Rule & Safeguards Rule
  86. What is the Financial Privacy Rule?
  87. It governs the collection & disclosure of a customer's personal financial information by financial institutions. Rule requires companies to give consumers & customers a privacy notice that explains the institution's information sharing practices.
  88. Who enforced the GLBA?
  89. The Federal Trade Commission (FTC)
  90. What is the Safeguards Rule of GLBA?
  91. It requires financial institutions to ensure the security & confidentiality of personal information collected (names
  92. What is pretext calling?
  93. The illegal practice of attempting to gain private information using false pretences
    normally over the telephone.
  94. What 4 types of businesses are not covered the Telemarketing Sales Rule (TSR)?
  95. 1. banks
    federal credit unions &federal savings & loans
  96. 2. long distance telephone companies & airlines
  97. 3. non-profit organizations & their #
  98. 4. insurance to the extent the business is regulated by state law
  99. Who governed the Telemarketing Sales Rule (TSR)??
  100. Federal Trade Comission & the Federal Consumer Commission (FCC)
  101. How many month after established business relationship can you can someone under the TSR rule?
  102. 18 months
  103. What is the amount for violation of the TSR?
  104. $16
  105. Who governed the National Flood Insurance Act (NFIA)?
  106. The Federal Emergency Management Association (FEMA) prepared the map and shows areas that are subject to 100 years floods.
  107. What does flood insurance claims cover?
  108. The material repairs on what the water actually touches
    not all the damages casued as a result of the flooding.
  109. what is the purpose of the Secure & Fair Enforcement (SAFE) Mortgage Licensing Act of 2008?
  110. To establish a nationwide system for licensing & registering Mortgage loan originators in order to:
  111. 1. increase uniformity of licensing nationwide
  112. 2. reduce the regulatory burden for multi-state lenders
  113. 3. enhance consumer protections by raising standards
  114. 4. reduce fraud through better tracking of MLO activity
  115. What agencies established the Nationwide Mortgage Licensing System & REgistry (NMLS&R)?
  116. Conference of State Bank Supervisors (CSBS) & the American Association of Residential Mortgage Regulators (AARMR)
  117. What are the intended of the Nationwide Mortgage Licensing System & Registry (NMLS&R)?
  118. 1.provide a comprehensive licensing & supervisory database
  119. 2. streamline the licensing process
  120. 3. provide for increased accountability
  121. 4. Enhance consumer protections & support anti-fraud measures
  122. What does loan originator do?
  123. 1. takes residential mortgage loan application
  124. 2. offers or negotiates the terms of a residential mortgage loan for compensation or gain or with the expectation of compensation or gain
  125. Note: sell timeshare plans (not have to be a loan originator)
  126. what does Administrative or clerical tasks mean?
  127. The receipt
  128. What is the purpose of the Fair Credit Reporting Act (FCRA)?
  129. The FCRA requires that credit records be accurate & kept confidential
    and establises the procedures for the correction of any mistakes on a person's credit report.
  130. How long can a suits
  131. 7 years
  132. How long is a bankruptcies be on a credit report?
  133. 10 years
  134. How many days within denial can a borrower who has been denied for credit request for a report?
  135. 60 days
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