A lender fails to provide the required PMI disclosure at loan closing. The borrower discovers this violation 18 months after closing. What is the potential penalty under the HPA?
Correct Answer
B) Up to $2,000 plus attorney's fees and costs
Under the HPA, failure to provide required disclosures can result in damages up to $2,000 for each violation, plus court costs and attorney's fees if the borrower prevails in a lawsuit. The violation does not automatically result in PMI cancellation.
Why This Is the Correct Answer
Under the HPA, failure to provide required disclosures can result in damages up to $2,000 for each violation, plus court costs and attorney's fees if the borrower prevails in a lawsuit. The violation does not automatically result in PMI cancellation.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
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