Federal Mortgage-Related Laws

Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?

A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?

During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?

A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?

An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?

A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?

Before the team acts on a branch training session, a policy analyst must address RESPA Servicing Transfer Notice. Which response is most defensible?

A training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?

An operations lead is resolving ECOA Prohibited Discrimination Bases during a loan-team coaching session. Which action best fits the rule?

In a file escalation meeting, a disclosure specialist sees facts tied to TILA Closing Disclosure. What should the file reflect?

A team member asks about TRID Changed Circumstances in a consumer complaint triage while trying to decide how the file should be documented. Which response should the supervisor use?

Ten days after sending a force-placement notice, a servicer buys coverage because the borrower has not yet responded. Which statement is most accurate?

A borrower receives the special flood hazard notice at the closing table with no earlier delivery. What is the principal compliance concern?

The lender properly provides the Notice of Special Flood Hazards to the borrower. Who else must generally receive the notice when there is a loan servicer?

During a company policy update, a policy analyst identifies an issue involving ATR/QM repayment-ability rules. Which response is most compliant?

Servicing of a loan transfers with an effective date of 1 July. The outgoing servicer has not yet sent its notice on 20 June and asks how much time is left. Under the ordinary servicing-transfer notice rule, by what date was the outgoing servicer required to send its notice?

A billboard shows "4.5%" in large type for a dwelling-secured loan, with "APR 5.1%" printed underneath in type roughly a quarter of the size. Does the relative prominence of the simple interest rate and APR comply with Regulation Z?

A mailer for a refinance carries the current servicer's logo, describes a 3-year fixed period on a loan that adjusts thereafter as simply "fixed", and offers a free consultation with a "debt counselor" at the for-profit brokerage. Assuming the unaffiliated advertiser gives none of the required clarifications about the lender's identity or the adjustable-rate period, which described practices violate Regulation Z's advertising restrictions?

On 14 May, 2 days before a 16 May consummation, the investor requires a prepayment penalty that was not on the closing disclosure. Nothing else about the loan changes. What Closing Disclosure correction and waiting period are required when this prepayment penalty is added?

A seller pays $3,200 of the buyer's loan discount points at closing. The processor asks whether that changes the buyer's finance charge. If these are bona fide seller's points paid by the seller, are they included in the buyer's Regulation Z finance charge?

A closing disclosure is placed in the mail on Monday 6 April for a consummation on Friday 10 April. No evidence of earlier receipt is kept. Using the presumed-receipt rule and assuming no federal holidays, does this mailing allow consummation on Friday 10 April?

On 12 August a lender decides to share borrower information with an unaffiliated marketing company. Its privacy notice describes the sharing and offers an opt-out. Assuming this sharing is subject to GLBA's opt-out requirement and no exception applies, what opportunity must the lender provide before sharing?

A lender uses a credit report to price a loan and offers the borrower a rate 1.4 points worse than the terms it gives most of its customers. If the consumer accepts this credit and no other exception applies, which FCRA notice requirement addresses the materially less favorable terms?

A lender opening an account on a $312,000 loan collects 4 things: the applicant's name, address, date of birth and taxpayer identification number. For a bank subject to the cited customer identification program rule, does collecting these four identifying items complete the process or is verification also required?

An MLO is reviewing procedures for a case where a borrower asks to cancel PMI at the scheduled 80 percent point. What is the proper handling?

A borrower applying by telephone on 6 May declines to state her ethnicity, race and sex. The originator can see none of the 3 and the file is otherwise complete. For this HMDA-covered telephone application, how should the lender record the demographic information the applicant declines to provide?

A branch manager asks about a loan file because a compliance analyst asks why covered mortgage application data is collected. What should happen?

A processor asks how to handle a file where an MLO wants to pull a consumer report for curiosity before an application purpose exists. Which response is most accurate?

A branch manager asks why the file must record the census tract, the applicant's income of $84,000 and the rate spread when none of the 3 affects the underwriting decision. What purpose does HMDA's collection of these lending data serve?

A servicer will transfer a loan effective 1 October. It plans to mail the transfer notice on 24 September, 7 days out. Assuming no special transfer exception applies, does mailing the transferor's notice seven days before the transfer meet Regulation X's timing rule?

A quality-control reviewer flags a case because a compliance analyst asks why covered mortgage application data is collected. What correction is appropriate?

Before closing, the team discovers that a borrower asks to cancel PMI at the scheduled 80 percent point. What is the safest compliant answer?

A complete loss mitigation application arrives on 3 March. A foreclosure sale is scheduled for 20 April, 48 days later. Assuming the loss-mitigation protections apply and the application remains unresolved, may the servicer conduct the scheduled sale?

Two lenders quote the same 6.25% note rate on a $300,000 loan. One shows an APR of 6.31% and the other 6.58%. Assuming identical fixed-rate terms, payment schedules, and principal amounts, what does the higher APR indicate about upfront finance charges?

A lender plans to share nonpublic personal information with unaffiliated marketers outside any Regulation P exception. It mails the required privacy and opt-out notices with a reasonable opt-out method. Which example does Regulation P expressly recognize as a reasonable opportunity to opt out?

A consumer asks about the FCRA's ordinary reporting limits for a Chapter 7 bankruptcy and a charged-off credit card, assuming no statutory reporting exception applies. Which periods and starting points are correct?

A lender declines a $265,000 application after reading a report from a specialty consumer reporting agency that tracks 24 months of rental payment history. If the denial is based in whole or part on that specialty report, which reporting agency must the FCRA adverse-action notice identify?

A borrower misses the payment due 1 April and has still not paid by 1 May, which is the 31st day of delinquency. Assuming no early-intervention exemption applies, what live-contact effort and written-notice deadlines apply?

A credit union originated 19 closed-end mortgages in one year and 31 in the next. It meets every other institutional test under Regulation C. Does the institution satisfy the closed-end mortgage loan-volume test for HMDA coverage?

An appraisal on a first-lien purchase of the applicant's home is completed 18 days before the scheduled consummation. The applicant has not asked for a copy. Absent a valid timing waiver, when must the lender provide the appraisal copy?

A first-lien higher-priced mortgage of $285,000 on a principal dwelling closes with no escrow account. The APR runs 2.1 points above the average prime offer rate and the lender meets no small-creditor exemption. Assuming no other escrow exemption applies and the loan remains outstanding, does closing without the required escrow account comply with the HPML rule?

A lender receives a complete application for a purchase loan on 2 March and wants to know what it owes the borrower beyond the loan estimate. For a covered purchase application, which special information booklet is required and what is its ordinary delivery deadline?

An application arrives by email at 4:50pm on Thursday 11 June. The lender is open Monday to Friday and consummation is scheduled for 3 July. Assuming all six application items were received and no holiday intervenes, by when must the lender deliver or mail the initial Loan Estimate?

A lender takes on 6 contract processors who completed anti-money laundering training at their previous employer 4 months ago. May the lender verify comparable prior AML training rather than automatically repeat it?

A buyer takes over an existing residential mortgage with the lender's written agreement, keeping the 4.25% rate and the remaining 22-year term. If the creditor expressly accepts the buyer in writing as the new primary obligor on this residential mortgage, are new Regulation Z assumption disclosures required?

A borrower took a 7.5% mortgage in 2022 and entered active duty in March. He gives the servicer his orders in April. Assuming timely written notice and documentation and no court-granted relief, what SCRA interest-rate treatment applies to this pre-service mortgage?

A covered borrower asks about a residential mortgage to buy a home and also about a $3,000 unsecured personal loan. Which of these loans is within the Military Lending Act's definition of covered consumer credit?

A loan is identified as high-cost under HOEPA. The lender wants to close 5 days after the borrower received the special disclosure. What must the creditor verify about homeownership counseling before consummating this high-cost mortgage?

A first-lien application on a principal dwelling is withdrawn by the applicant 9 days after the appraisal was completed. Absent a timing waiver, does the applicant's withdrawal eliminate the lender's appraisal-copy delivery obligation?

A borrower sends a written request for the name and address of the owner of her loan. It arrives 4 June. For a valid written owner-identification request, what is the ordinary response deadline?