Taking advantage of ill-informed consumers through excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the borrower and other prohibited acts is called __________________________. - CORRECT ANSWER Predatory Lending. RESPA-Real Estate Settlement Procedures Act - CORRECT ANSWER The Federal Statute that deals with the settlement of residential mortgage loans. RESPA's section 9 Prohibits - CORRECT ANSWER Home sellers from requiring home buyers to purchase title insurance from a particular company providing title services. The Dodd-Frank Act modifies ECOA to require a creditor to furnish a copy of an appraisal developed in connection with a first mortgage_____________________ and absolutely not later than ________ business days prior to closing. - CORRECT ANSWER upon completion and 3 business days TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - CORRECT ANSWER Per the Dodd Frank Act, a single disclosure form combines these 2 statements. Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees may not exceed ________% of the total loan amount. - CORRECT ANSWER 3% (three percent) Per a provision of the Dodd-Frank Act mortgage lenders are to determine that a borrower has a reasonable ability to repay a loan. Does this provision apply to all loans or just owner occupied loans? - CORRECT ANSWER All loans, whether owner occupied or not. A loan subject to HOEPA allows prepayment penalties for the first ______ years of the loan. - CORRECT ANSWER 2 (two) years Per the Dodd-Frank Act an abusive act would include which of the following: 1. One that materially interferes with the consumers ability to understand the product or service. 2. One that take unreasonable advantage of a consumers' lack of understanding. 3. One that takes unreasonable advantage of the consumer's reasonable reliance on the MLO. - CORRECT ANSWER All three would be considered abusive acts. Per the Dodd-Frank Act if an MLO receives compensation directly from a consumer, up to how much additional compensation may be received from a lender in the same transaction? - CORRECT ANSWER $0.00, dual compensation is not allowed. Compensation must be borrower paid or lender paid. What kinds of reasons are necessary for a lender to take adverse action with regard to a borrower? - CORRECT ANSWER Specific reasons. Adverse action means ______________________. - CORRECT ANSWER A denial or revocation of credit. Also, a change in the terms of an existing credit arrangement or a refusal to grant credit in substantially the amount or terms requested. Per Regulation B, Lenders should retain certain records for _____________ months. - CORRECT ANSWER 25 Months Because of the impact of the Dodd-Frank Act on a second mortgage, an APR that exceeds the ________ by more than _____% is the trigger that defines a high cost loan. - CORRECT ANSWER APOR ( Average Prime Offer Rate), 8.5% Regulation C is known as ________________________. - CORRECT ANSWER HMDA, The Home Mortgage Disclosure Act. What is the purpose of HMDA? - CORRECT ANSWER The HMDA determines whether financial institutions are serving the housing needs of their communities. It also identifies patterns of discriminatory lending. Under what circumstances can a lender with an Affiliated Business Arrangement require a borrower to use a specific third party service provider? - CORRECT ANSWER If there are no kickback or referral fees and the service provider is an attorney, credit reporting agency or appraiser the lender can require that the borrower uses the provider If a transfer of servicing occurs, the _______________ must provide a servicing transfer statement not less than ________ days before the transfer occurs. - CORRECT ANSWER Servicer, 15 (fifteen) days. An individual who fails the MLO written exam 3 times must wait _________ months to retake the exam. - CORRECT ANSWER 6 (Six) Months Per RESPA, an annual escrow statement is required to ______________. - CORRECT ANSWER determine shortages and surpluses in the escrow account. When must the Servicing Disclosure Statement be provided to the borrower? - CORRECT ANSWER Within 3 (three) Business Days of the Application. Any party involved in a federally covered loan that submits fraudulent information is subject to a fine of up to $___________ and up to __________years in prison. - CORRECT ANSWER $1,000,000 (one million dollars), 30 years in prison