Federal Mortgage Related Laws questions I got wrong

Which one of the following options best describes loan consummation, according to TRID?

When a consumer becomes contractually obligated to a creditor on a loan

Which of the following best defines an annual percentage rate (APR)?

A standardized measure for interest rates and other costs of the loan

Delia was just turned down for a mortgage loan. The creditor informed Delia orally of the reasons she was turned down. If she requests written confirmation of these reasons, how long does the creditor have to provide this confirmation?

30 days from the date of Delia’s request for confirmation

What is the significance of APR in mortgage lending and finance?

APR provides borrowers with a clear, comparable measure of the cost of a loan. Unlike the simple interest rate, APR includes additional fees and finance charges, helping consumers understand the true cost of borrowing.

Why is APR important for consumer disclosures in loan agreements?

APR is vital for transparency. Regulations require lenders to disclose APR so borrowers can compare different loans fairly. Since fees and other costs vary among lenders, APR helps level the playing field by summarizing total costs into one percentage.

example to illustrate the difference between interest rate and APR?

Suppose a mortgage has a nominal interest rate of 4% and includes additional fees that add up to a cost which, when annualized, raises the effective borrowing cost to 4.5%. Here, 4% is the interest rate, while 4.5% is the APR reflecting the extra fees.

When may a company policy that has a disparate impact on various consumers be justifiable?

When there’s a legitimate business reason

What is HUD’s mission?

To create strong, sustainable, inclusive communities and quality affordable homes for all

Zenobia acquired a house one month ago for $500,000. She is now selling it for $575,000 to Anne, who is trying to secure a higher-priced mortgage loan for her purchase. Will it be necessary to carry out two appraisals of the property in accordance with Regulation Z? Why or why not?

yes. Zenobia bought the house fewer than 90 days ago and the price Anne is paying is more than 10% greater than what Zenobia paid.

If a lender takes adverse action on an applicant’s mortgage loan application, what must the lender provide to the applicant?

Notification describing the adverse action taken, but use of the term “adverse action” is not required. Either a statement of specific reasons for the adverse action must be included in the notification, or a disclosure of the applicant's right to such a statement must be provided to the applicant.

If a non-U.S. citizen who is in the country on a work visa wants to obtain a mortgage loan, which one of the following documents is a lender least likely to want to examine?

A form of identification issued by a U.S. state

A CD will contain an itemization of services the borrower did not shop for, as well as services the borrower did shop for. Where would this information be located in relation to the terms of the loan?

On a later page than the terms of the loan

A homebuyer is trying to secure a higher-priced mortgage loan, and two appraisals of the property will be required. A different licensed appraiser was hired to perform each appraisal. The first appraiser conducted a drive-by appraisal, while the second appraiser inspected the house’s interior as well as the exterior. Have federal regulatory requirements been satisfied? Why or why not?

No. Each of the appraisers is required to conduct a physical visit to the interior of the house.

In the Liability After Foreclosure section of the CD, the box next to the statement that state law might offer protection should NOT be checked if which of the following protections is the only protection available?

A statute of limitations on when a creditor can seek redress

State law might only offer protection in the form of a statute of limitations that prevents a creditor from seeking redress after a certain amount of time has passed. If state law offers any protection beyond this, then

the box should be checked beside the statement that state law might offer protection from liability for the unpaid balance.

Which one of the following allows mortgage lenders to obtain a better price for their mortgage loans in the secondary mortgage market?

Ginnie Mae

TRID requirements for closing requirements may increase the likelihood of closing delays because certain changes will trigger a new three-day waiting period before closing can take place. Which of the following is one reason closing would be delayed?

The loan changed from adjustable-rate to a fixed-rate loan.

If there is a non-numerical error on the CD, how long does the creditor have to send our corrected disclosures

60 days after consummation

A creditor received an incomplete loan application and has chosen not to reject the application just yet. Does the creditor have any option at this point other than sending the applicant a written notification that the application is incomplete?

Yes. The creditor can ask the applicant orally to complete the application.

Redlining is an illegal practice by ______.

Lenders

Edna has been notified by her creditor that her loan application was incomplete. Fortunately, she’ll be able to supply all of the missing information. How much time is the creditor required to give Edna to complete her application?

A reasonable amount of time designated by the creditor

If a creditor finds an error in the closing disclosure that would change the amount a consumer would have to pay (after consummation), how long does the creditor have to send out a corrected disclosure

30 days after the inaccuracy was detected

When can loan transaction disclosures be sent to consumers electronically?

Only when the consumer provides written consent

All of the following are stages of money laundering process except for which one?

Exchange

How may HMDA data be used?

For monitoring lending practices