MLO studying

Mortgage assistance relief services rule(MARS)(Regulation O)

Requires service providers to disclose fees upfront, prohibits misleading statements, and mandates that they provide a written contract. The rule aims to ensure transparency and fairness in the mortgage assistance process, helping homeowners avoid scams.

Chunking

A type of fraud where investors are sold many houses that will be flipped with unrealistic reward and risk

Fair credit reporting act(Regulation V)

This act regulates how consumer reporting agencies collect, disseminate, and use consumer information. It provides consumers with the right to access their credit reports, dispute inaccuracies, and receive notifications of negative information. It also limits the sharing of information and requires agencies to ensure the information's accuracy. Violations can lead to legal consequences for agencies.

Gramm-Leach-Bliely Act(Regulation P -Privacy act)

Established privacy protections for consumers' personal financial information, requiring institutions to disclose their privacy policies and practices. The act aimed to modernize financial services and promote competition while ensuring consumer protection

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act, Title V of Housing and Economic Recovery Act)

It established a nationwide licensing and registration system for mortgage loan originators, requiring them to meet specific standards and undergo background checks. Additionally, it aims to improve accountability and transparency in the mortgage process.

Truth in Lending Act (Regulation Z, TILA)

Mandates lenders to provide borrowers with key information, including annual percentage rates, finance charges, and total payments, ensuring transparency in lending practices. Enforced by the Consumer Financial Protection Bureau, it protects consumers from deceptive lending practices.

Right of Recession

A legal provision allowing consumers to cancel a contract or agreement within a specified period after signing, typically without penalty. 3 day right

3/7/3 MLO rule

Earliest closure is 7 days after initial disclosure. 3 business day wait period before consummation if re-disclosure required

Real-estate settlement procedures act(RESPA regulation x)

Requires disclosure of settlement costs, prohibits kickbacks, and mandates good faith estimates of closing costs. Aims to promote transparency and fairness in real estate transactions.

Kickbacks

Receiving compensation for referring clients

Home owners protection ACT(HPA)

U.S. federal law enacted in 1998 that allows homeowners to request the cancellation of private mortgage insurance (PMI) under certain conditions, aiming to protect consumers from unnecessary costs associated with mortgage loans.

Home ownership and equity protection act(HOEPA)

It mandates specific disclosures and establishes rules for certain high-cost loans. The act requires lenders to provide borrowers with clear information about the terms and costs of loans, ensuring that borrowers understand their obligations and rights. It also prohibits certain practices, such as balloon payments and negative amortization, to prevent predatory lending.

Higher priced loans (Section 35)

Where APR exceeds average APR or APOR by more then 1.5% for fist loans or 3.5% for consecutive loans. Need escrow accounts!

Fair and accurate credit transaction act (FACTA)

Requires consumer reporting agencies to provide free annual credit reports and mandates that creditors take steps to protect sensitive information. It also allows consumers to place fraud alerts on their credit files.

National Do Not Call Registry(DNCR)

Definition: A federal program that allows consumers to opt out of receiving unsolicited telemarketing calls. It aims to protect personal privacy by giving individuals the choice to limit unwanted calls from telemarketers. Violations can result in fines for telemarketers.

Fair Housing Act(FHA)

The Fair Housing Act (FHA), enacted in 1968, ensures equal housing opportunities and aims to eliminate barriers to housing for protected classes. It prohibits practices such as refusal to rent, unequal terms, and discriminatory advertising. Enforcement is through the U.S. Department of Housing and Urban Development (HUD) and private lawsuits.

Equal Credit Opportunity Act(ECOA Reg B)

This law ensures that all individuals have equal access to credit, regardless of race, color, religion, national origin, sex, marital status, or age. It requires lenders to provide applicants with specific reasons for denial and mandates that credit information be kept confidential. You can still document for HMDA.

home mortgage disclosures act (HMDA Reg-C)

This act aims to provide transparency in lending practices and ensure that all individuals have equal access to mortgage loans, regardless of race, ethnicity, gender, or other protected characteristics. It helps identify discriminatory lending patterns and supports fair housing efforts.

FTC red flags

Fights against fraud. Non compliance results in $3,500 per incident

1. Promises of unrealistic results or benefits.

2. Lack of clear, specific information.

3. High-pressure sales tactics.

4. Claims that seem too good to be true.

5. Testimonials without verifiable sources.

6. Hidden fees or charges.

7. Misleading product comparisons.

8. Absence of a clear refund policy.

Dodd-Frank act

This legislation, enacted in 2010 in response to the 2008 financial crisis, aims to promote financial stability by increasing transparency and accountability in the financial system. It established regulations for banks, created the Consumer Financial Protection Bureau, and implemented measures to prevent risky practices that could lead to economic downturns.

Bank Secrecy act(Anti Money Laundering)

This U.S. law requires financial institutions to assist government agencies in detecting and preventing money laundering. It mandates reporting of certain transactions, maintaining records, and implementing anti-money laundering programs. The goal is to promote transparency and prevent financial crimes.

Mortgage Acts and Practices advertising(Regulation N)

This regulation prohibits misleading advertising practices related to mortgage products. It requires clear and accurate disclosures, ensuring consumers understand the terms and costs associated with mortgage loans. Violations can lead to penalties and enforcement actions by the Consumer Financial Protection Bureau (CFPB)

E-sign act

Allows for E-signatures

USA PATRIOT ACT

Fights against funding towards terrorism Lender must provide accurate information on who the borrower is.

Loan Originator Compensation

Rules that MLOS compensation must be due to work they did, not referrals and that it must not be based on terms of loan.

Ability at Repay ATR

Requires that MLO will make a good faith determination that the borrower could repay this loan. Consideration includes income, assets ,credit score, etc)

Qualified mortgage(QM)

Liability protection for creditors. creates rules for qualifying mortgages and there terms

General Qualified Mortgage

Liability protection for general loans. no negative amertization, interest only payments, balloon payments, or longer then 30 year term, may never have fees or points that excced 3% of 100,000 or more loan amount. DTI can not exceed 43%!

Safe Harbor

Loans that or not higher priced and comply with ATR requirments.If sued the borrower needs to prove you are guilty

Rebuttal presumption

Loans that are higher priced and don’t comply with ATR requirments. If sued the MLO needs to prove there innocents

Mortgage disclosure improvement act

7th business day after initial disclosure is earliest a borrower can close. if there is a .125 APR variance you must redisclose.

Truth in Lending Disclosure(TRID))

Requires standardized information to borrowers about organized loans. Not applied to reverse mort or HELOCs. Has zero tolerance feed which can never change from disclosure. 10% accumulative fees which may change 10%. And No tolerance fees which may change. requires retention for 5 years.

Fraud enforcement and recovery act

A act passed in 2009 that made defrauding a government loan a crime with a fee or in prison or both per violation.

Notice to home loan applicant

A notice about the a clients home loan. Originators must disclose credit scores and factors affecting there acceptance, adverse action, or denial.

Community reinvestment act

Encourages loan orginators to serve those with low to moderate income. You are regulated by the federal reserve board FRB which regulates and rates your contribution.

CHARM booklet

This handbook you will give within 3 days of a ARM application gives an overview of ARM's, explains how ARM's work, and discusses some of the issues that you might face as a borrower

$10,000/1 Year in Prison

Penalty if you violate respa

2 years

How long must a chapter 7 bankruptcy be seasoned before providing a FHA loan?

1 basis point = 0.01%

1 basis point = ?

4 years

How long must a chapter 7 bankruptcy be seasoned before providing a conventional loan?

Loan product advisor

What is Freddie Mac’s AUS called?

Desktop underwriter

What is Fannie Mae’s AUS called?

Planned unit development

What does PUD stand for

No

Can gift funds come from non relatives or employers?

7 years

For conventional financing how long must you wait for a foreclosure to be seasoned before giving a loan?

Co-mortgagers

2 unmarried borrowers on a loan. Must fill out SEPARATE 1003

Co-borrowers

2 married borrowers. Can fill out SAME 1003

SRP(service release premium)

A 1 time payment to a lender for selling a loan to a 2nd market buyer. The 2nd market buyer considers everything about the loan before paying lender.

3 years

How long is the right to rescind in the lender fails to provide the borrower with the 3 day right to rescind disclosure?

A note rate

What rate is the rate after all but downs and term of buy down?

HCLTV

What value is calculated by dividing the liens on the property by the value of the property?

3 years

If a borrower is using social security as income how long must it be valid for?

Escrow hold back

Allows for borrower to pay the seller for any work that needs to be done after closing on the mortgage?

6%

Max amount of seller concessions on a FHA loan

1.75%

FHA UFMIP

CSBS and AARMR

what 2 companies help create the NMLS and developed the model law for the SAFE ACT?

3 hours

How many hours of Federal law are required for continuing education?

2 hours

How many hours of Ethics are required for continuing education?

2 hours

How many hours of Non-traditional mortgage are required for continuing education?

1 hour

How many hours of General electives are required for continuing education?

8 hours

How many hours of continuing education a year?

20 hours

How many hours of education to get licensed in CO?

HOEPA(home ownership & equity protection act)

What act requires consulting for high cost mortgages

Yield spread premium

This must be given to borrower(YSP)

90% or more

at what LTV do FHA loans need MIP for the life of the loan?

28%

Conventional mortgage front end DTI is

36%

Conventional mortgage back end DTI is

31%

FHA loan front end DTI is

43%

FHA loan back end DTI is

URAR(Uniform Residential Appraisal Report)

what form provides accurate unbiased value of a property?AKA 1004

Subordination Agreement

What agreement allows the importance of one loan to surpass others?

Straw buyers

What fraudulent activity involves purchasing a property for another person who uses your information because they don’t qualify

10 years

Chapter 7 bankruptcies remain on credit report for how long?

13 years

Chapter 13 bankruptcies remain on credit report for how long?

30 days

Under ECOA you should tell a borrower of acceptance or denial of a loan within

RESPA

What act requires borrowers to know about transferring of servicer?

ECOA

What act requires borrower to know about acceptance or denial in resonable time?

90 days

How many days does a lender have to accept or reject counter offer

Non-conforming

Jumbo loans are

30 days

SARS forms must be filled out how a minimum of many days after incident

Refinances

Right to Rescind applied to what

Residual income

What type of income do VA Underwriters use to determine if after house expenses if they could afford living expenses.

41%

What is max percentage of residual income

MARS

what act made it illegal for assistance programs to falsely claim they are government programs or provided by a servicer they are not

Front end DTI

Housing ratio means

Income approach

What appraisal type is popular with investment properties

2 copies

How many copies of Right of Rescind must be given to borrower and owners of property

a three-party contract that guarantees a specific obligation will be fulfilled:    Surety: The insurance company that issues the bond and guarantees the principal's performance

What is a surety bond?

obligated to fulfill obligation

Who is the Principle on a surety bond

The party who is protected by the bond

Who is the obligee on a surety bond

4 years

How many years until a borrower can get a conventional loan after a chapter 13 dismissal.

2 years

How many years until a borrower can get a conventional loan after a chapter 13 discharge.

Borrower agrees to pay lender back for losses under a payment plan

What is a chapter 13 bankruptcy

borrower pays lender back after chapter 13 bankruptcy

Discharge

Borrower fails to pay back after chapter 13 bankruptcy

Dismissle

2 years

How many years until a borrower can get a FHA loan after a chapter 7 discharge.

1 year

How many years until a borrower can get a FHA loan after a chapter 13 filing.

2 years

How many years until a borrower can get a VA loan after a chapter 7 discharge.

1 year

How many years until a borrower can get a VA loan after a chapter 13 filing.

3 years

How many years until a borrower can get a USDA after a chapter 7 discharge.