MLO flash cards

when ordering an appraisal, it is illegal to,

Request a specific value. Considered improper influence of an appraiser. ethical and legal violations.

Borrower Credit is,

Amount paid by the lender to borrower for locking an interest rate at a higher rate than the par rate. Borrower credit used to help borrower subsidize closing costs in exchange for taking a higher rate.

MAP rule implemented under regulation

Regulation N

Equity stripping is

Unethical practice of basing a loan approval on only the appraised value of the property. Practice doesn’t consider ATR.

3 conditions that are affiliated business must meet to satisfy referral requirements

Disclosure of the relationship, no required use of the referred entity, limitations on the “things of value” resulting from the arrangement

Regulation Z prohibits advertising..

An attractive interest rate or loan term that is not actually available. TILA/ reg z include a number of prohibitions/ requirements against deceptive advertising.

The safe guard rules and disposal rule are concerned with

Preserving confidential personal financial info

Fiduciary means

One person (agent) is acting in the best interest of another person. Requires good faith, loyalty and, an obligation of the agent to consider the interest of the other person before their own

Air loans are

Fraudulent transaction where fictitious borrower obtains a mortgage and secures it with fictitious property.

Equity based lending occurs when

A lending sections is based on the equity available in the borrowers home rather than the creditworthiness ability to repay

Yield spread premium is now known as

borrowers credit

what are the penalties for violation of RESPA/ section 8

prohibits referral fees, other forms of kickbacks/fee splitting. penalties include fines up to 10 bands n one year in prison

Disclosures due within 3 business days of loan application are

The LE, Home Tool kit, CHARM booklet, variable rate program disclosures, notice of right receive am appraisal report

what can result in 1 million bones in fines and 30 years in prison

Acts of montage Fraud

define creditor

A person who regularly extends, renews, or continues credit. Ex, LO’s, Lenders, other mortgage professionals are included in this definition

Transactions reported under HMDA

Purchases, Refis, Home improvement loans pre-qualifications must also be reported, along with their dispositions

When a borrowers LTV reaches 80%

permitted to request cancellation of their PMI

An initial privacy notice is due

at the time that a consumer relationship is established (Gramm-leach Bliley act)

HMDA requires loan originators to

request info on applicants race, sex, ethnicity, (aloud to decline. Note that and make a visual observation)

A permissible purpose is required when

Obtaining a credit report.

Gramm-leach-Bliley act does not protect

public available info

Loan estimate must be provided

No later than 3 businesses days after receiving a completed application

No later than 7 business days prior to consummation

Closing disclosure must be provided

At least 3 business days prior to consummation

Exceptions to ECOA’s prohibitions are

Mortgage professionals are premiered to ask about race, sex, ethnicity to determine eligibility for special purpose credit such as assistance programs though non profits

Purpose of Home Owners Protection Act (HOPA)

Facilitate cancellation of PMI able to request cancellation when LTV value reaches 80% but will automatically be terminated when LTV reaches 78%

Advertising trigger terms for closed end loans under TILA include

Amount or % of any down payment

number of payments or period of repayment

amount of any payment

amount of ant finance charge

Use of trigger terms in advertisements requires disclosure of

Amount and % of the down Payment

Terms of repayment, such as inclusion of balloon payment

APR

The TRID Rule does not apply to…

HELOCS

Reverse mortgages

Mortgages secured by a mobile home or dwelling not attached to real property

fee splitting is illegal when

one or both settlement service providers fail to perform enough work to earn the fee

“Low monthly payments” is an example of

An adverting trigger term under Reg Z (TILA) Requires additional info to be provided in the ad. Apr must be provided if the ad includes the note rate

Reg B is

ECOA Equal credit opportunity act

Credit not covered by TILA

Business/ agriculture credit

credit excess of 25k unless secured by a dwelling/real property

public utility credit

student loans

home fuel budget plans

When a borrower reaches a 20% equity position..

Permitted to request cancelation of PMI (80%)

Patriot act is

Verify identity of a person applying for a loan, maintain records of the info used for verification, and determine whether a potential borrower appears on known terrorist list

Non public info is considered

info derived from a credit report or provided with respect to a loan application. Ex, Loan balances, account numbers, unlisted phone numbers.

where is borrower credit disclosed

Disclosed on the LE and CD

what is the purpose of an escort analysis

To prevent escrow overages