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What is the purpose of the TILA-RESPA Integrated Disclosure Rule?

To consolidate and simplify mortgage loan disclosures that are required under TILA and RESPA into two forms: the Loan Estimate and the Closing Disclosure.

What are the two primary forms introduced by the TILA-RESPA rule?

The Loan Estimate and the Closing Disclosure.

When must the Loan Estimate be provided to the consumer?

Within three business days after receiving the consumer's loan application.

What information is included in a Loan Estimate?

Good faith estimates of credit costs and transaction terms for closed-end credit transactions secured by real property or a cooperative unit.

What is the timing requirement for providing a Closing Disclosure?

It must be provided to the consumer no later than three business days before consummation of the loan.

What transactions does the TILA-RESPA Rule generally apply to?

Most closed-end consumer credit transactions secured by real property or a cooperative unit.

What are the record retention requirements for the Closing Disclosure?

The creditor must retain copies of the Closing Disclosure and related documents for five years after consummation.

What must creditors do if the amounts paid at closing exceed the amounts disclosed on the Loan Estimate?

Creditor must provide a corrected Closing Disclosure and may need to reimburse the consumer.

What triggers a new three-business-day waiting period for a Closing Disclosure?

Changes that affect the disclosed APR, loan product changes, or the addition of a prepayment penalty.

What must be included in the Escrow Closing Notice?

The closure date, reasons for closing, and implications for property costs.

Can a mortgage broker provide a Loan Estimate on behalf of a creditor?

Yes, a mortgage broker may provide the Loan Estimate as long as the creditor maintains communication and is responsible for any errors.

What is a 'changed circumstance' in the context of the Loan Estimate?

An extraordinary event or new information that affects the estimated charges or terms disclosed.

What is the requirement for disclosing seller credits on the Loan Estimate?

Seller credits should be disclosed either in the Calculating Cash to Close table or with specific fees.

What must creditors do when a revised Loan Estimate is necessary?

A revised Loan Estimate must be provided to reset tolerances or update information and must be based on the best information reasonably available.

What is the full title of Public Law 115-174, enacted on May 24, 2018?

Economic Growth, Regulatory Relief, and Consumer Protection Act.

What does the Economic Growth, Regulatory Relief, and Consumer Protection Act aim to promote?

Economic growth, tailored regulatory relief, and enhanced consumer protections.

What section of the Economic Growth, Regulatory Relief, and Consumer Protection Act covers definitions?

Section 2.

What is the key provision in Title I regarding residential mortgage loans?

It establishes minimum standards for residential mortgage loans.

What does Section 101 of the Act specifically refer to?

Minimum standards for residential mortgage loans.

What is the purpose of Section 102 of the Act?

To safeguard access to Habitat for Humanity homes.

What exemption does Section 103 create?

Exemption from appraisals of real property located in rural areas.

What do titles II and III of the Act focus on?

Regulatory relief and protections for veterans, consumers, and homeowners.

What does Section 301 of the Act pertain to?

Protecting consumers' credit.

What is established under Section 304 regarding foreclosures?

Restoration of the Protecting Tenants at Foreclosure Act of 2009.

What is the definition of 'cosigner' according to the Act?

Any individual who is liable for the obligation of another without compensation, except under certain loan types.

What does Section 601 of the Act address?

Protections in the event of death or bankruptcy for student borrowers.

When does the new definition of 'veteran's medical debt' take effect?

Upon the enactment of this Act regarding student credit.

What action must the Secretary of Housing and Urban Development take within a year after enactment?

Establish a database for verifying veteran's medical debts.

What is the limit on fees for refinancing loans specified in Section 3709?

Loans must provide a net tangible benefit to the veteran.

When must regulatory changes regarding the community bank leverage ratio be implemented?

Within 18 months after the enactment of the Act.

What does the section on encouraging capital formation involve for the Securities Exchange Commission?

Creating a regulatory framework for algorithmic trading and capital investment.

What is one requirement placed on the Secretary of Veterans Affairs regarding the loan program?

Submit a report on the liquidity of the housing loan program.

What does Section 504 aim to improve for innovators?

Increases capital accessibility for small businesses and innovators.

What innovative action does the Act propose regarding financial literacy for students?

Establishment of best practices for teaching financial literacy skills.

What is the primary responsibility when working as a mortgage loan officer?

To work for the borrower while protecting the company.

What are the key fair lending regulations mentioned?

Fair Lending, Fair Housing, and ECOA ensure everyone has the right to apply.

Which act requires the confidentiality of borrower information?

Gramm-Leach-Bliley Act and the Safeguard Rules.

When must public assistance be considered in loan applications?

It must be counted only if it meets program requirements for income.

Can a mortgage loan officer change documentation to assist a borrower?

No, they do not have the right to change documentation.

What is redlining in mortgage lending?

Refusing to take an application based on the property's location.

What does reverse redlining refer to?

Charging higher interest rates and costs in certain areas due to risk factors.

What is steering in the context of mortgage lending?

Directing a borrower to live in a certain area or forcing them into specific programs.

What is prohibited regarding referral fees and kickbacks?

No referrals or kickbacks can be paid for any reason.

What must happen if an appraiser is connected to someone in the loan?

The appraiser must be replaced.

What should you do if you suspect a borrower is providing fraudulent information?

Report any loan files to your Compliance Officer.

What are the consequences of doctoring documents for a borrower?

You can be penalized or fired.

What must be done if there are changes to the loan file?

Inform the underwriter about any changes.

What must be verified on all agency programs for borrower qualification?

All income, assets, and any information used to qualify the borrower.

What is required when offering a borrower a non-traditional loan?

Show them examples of other loan products available.

Who is required to be licensed in mortgage lending?

Any person who takes or solicits loan applications, negotiates terms, or expects compensation.

What is required for an affiliated business disclosure?

It is required if an MLO is licensed as a Realtor and Loan Officer or has a 1% ownership in a third-party company.

What constitutes a referral in mortgage lending?

Anything of value given or received from a third-party company, Realtor, or Builder.

What must an appraiser do if connected to anyone in the transaction?

They must excuse themselves from the assignment.

What language should not be used with consumers regarding applications?

Do not use language that suggests the consumer should not apply.

What checks should be done for asset fraud?

Verify that documentation matches the verifications provided by the borrower.

What must be backed out of the sales price?

Any personal property, as only real estate can be borrowed against.

What occupancy requirement does FHA impose?

The borrower must owner-occupy for 60 days.

What should you verify regarding income provided by the borrower?

Verifications must match documented proof provided by the borrower.

What must any Power of Attorney (POA) be approved by?

The underwriter.

Why is fraud on the rise in cash-out refinances?

Because providers are applying without the owner's knowledge.

What is the definition of wire fraud in mortgage lending?

A request for funds to be wired to unconnected individuals to the transaction.

What can application fraud involve?

Discrepancies between the credit report and application, like name or Social Security number mismatches.

What should be disclosed on the Loan Estimate (LE)?

All costs and terms of the loan.

Who is responsible for the loan if they sign the mortgage?

Borrowers, co-borrowers, and co-signers.

What must an underwriter approve regarding Power of Attorney?

Any Power of Attorney must be approved to avoid fraud.

What does the Fair Housing Act protect against?

Discrimination in housing based on race, color, or national origin.

What type of buildings are exempt from the Fair Housing Act?

Owner-occupied buildings with no more than four units.

What regulations does the Fair Housing Act impose on mortgage lending?

Illegally discriminate, refuse to provide loans, or impose different terms.

How should advertising comply with fair housing laws?

Focus on the property and its amenities, not on potential renters or buyers.

What should be included in advertisements regarding fair housing?

Fair housing logo or 'Equal Housing Opportunity' slogan.

What should be truthful in advertisements?

Availability, price, amenities, and features of housing units.

What should be posted in a conspicuous location?

A non-discrimination policy or HUD Fair Housing Poster.

How should marketing campaigns be structured under the Fair Housing Act?

Include persons with protected characteristics to reach a broad audience.

What is fraud for housing in mortgage terms?

Fraud committed by borrowers to obtain a loan for a property they can't afford, typically involving fabricated documents.

What characterizes fraud for profit?

Known as 'industry insider fraud', this type involves a mortgage broker colluding with others to create false credit profiles and inflate property values.

What are foreclosure rescue schemes?

Schemes where entities mislead homeowners in foreclosure into selling their property with false promises of repurchase.

What is a loan modification scheme?

A fraudulent practice where individuals charge upfront fees to assist with loan modifications and either walk away with the fee or negotiate unfavorable terms.

Define illegal property flipping.

The process of purchasing a property, falsely appraising it at a higher value, and quickly reselling it, typically involving fraudulent information.

What is equity skimming?

An investment scam where a straw buyer obtains a mortgage loan and transfers property rights to an investor who then rents the property until foreclosure.

What is a silent second mortgage?

A down payment borrowed from the seller that is not disclosed to the primary lender, usually hidden in a second mortgage.

What are air loans?

Loans for nonexistent properties, involving fabricated borrowers, properties, and false accounts to deceive creditors.

Define chunking in real estate fraud.

A scam associated with 'get rich quick' seminars that promise easy real estate investments.

What is redlining?

The practice of denying services or raising prices based on the racial or ethnic makeup of certain areas.

Explain disparate impact in lending.

When a lender's policies negatively affect certain applicants despite being applied equally across all applicants.

What constitutes padding or packing in mortgage practices?

Charging customers unearned, concealed, or unwarranted fees.

What is reverse redlining?

Targeting nonwhite consumers to charge them more than white consumers, rather than denying them loans.

What is churning in the context of mortgages?

Refinancing a home loan repeatedly when unnecessary, primarily to obtain additional fees.

What is disparate treatment in lending?

When a lender bases lending decisions on discriminatory factors, violating fair lending laws.

What does ECOA stand for?

Equal Credit Opportunity Act.

Who is protected under ECOA (Regulation B)?

Protected classes include sex, religion, national origin, color, age, race, marital status, and public assistance.

What must happen within 30 days of a complete underwriting package according to ECOA?

An underwriting decision must be made, whether approved, cancelled, or rejected.

What is the time frame for delivering the Appraisal to the borrower before closing?

The appraisal must be delivered no less than three business days before closing.

What must companies do under the Home Mortgage Disclosure Act (HMDA)?

All companies that underwrite or fund loans must file a HMDA report quarterly.

What is the difference in treatment of age under the Fair Housing Act compared to ECOA?

Age is exempt under the Fair Housing Act; reverse mortgages require the borrower to be 62 or older.

Under HOEPA requirements, when is mandatory mortgage insurance required?

Mandatory mortgage insurance is required for loans over 80% LTV.

What does the Fair Credit Reporting Act (FCRA) guarantee to consumers?

Every consumer has the right to at least one free credit report each year.

What constitutes a 'Red Flag' under FACTA?

A Red Flag is an indication of a potential breach of security that must be reported.

What are the penalties for violating consumer financial laws under the Dodd-Frank Act?

Penalties may include civil penalties that can range from $5,639 to $1,127,779 per day depending on the level of violation.

What is required within 3 business days according to the Truth in Lending Act (TILA)?

The Loan Estimate must be delivered within 3 business days from signing the application.

What is banned under RESPA Section 8?

Nothing of value can be paid or received for referrals or kickbacks.