EstatePass

SAFE MLO test · Which law? · Episode 4

Six Laws, Six Jobs

Free to watch2:42

Chapters

  1. Which law?
  2. Six jobs
  3. File it
  4. The overlap
  5. Recap

In short

Most SAFE questions on federal law ask which law applies. RESPA (Regulation X) covers settlement: closing costs, escrow and kickbacks. TILA (Regulation Z) covers the cost of credit. ECOA (Regulation B) covers fair lending and adverse action. FCRA (Regulation V) covers credit reports, GLBA (Regulation P) privacy, and HMDA (Regulation C) the reporting of application data. The Loan Estimate and Closing Disclosure come from TILA and RESPA together as TRID, with the rules in Regulation Z.

  • A referral fee is a RESPA kickback; the APR is TILA.
  • Asking about plans to have children is an ECOA violation.
  • A credit report dispute is FCRA; a privacy notice with an opt-out is GLBA.
  • Recording race and income of applicants for annual reporting is HMDA.

Transcript

Which law?

Six federal laws show up again and again on the SAFE exam. The question is rarely what the law says. It is which law it is.

Six jobs

RESPA, Regulation X, covers settlement: closing costs, escrow, and kickbacks. TILA, Regulation Z, covers the cost of credit: the APR, the finance charge, and the right to rescind. ECOA, Regulation B, covers fairness: no discrimination, and a notice when credit is denied. FCRA, Regulation V, covers credit reports: who can see them, and how to fix them. GLBA, Regulation P, covers privacy: what the lender shares, and how to opt out. HMDA, Regulation C, covers reporting: who applied, for what, and where.

File it

Now file each case. A lender pays an agent $500 for every buyer the agent sends over. Money for a referral is a kickback. RESPA. A borrower wants to know the yearly cost of the loan, fees included. That number is the APR. TILA. Pause. A loan officer asks the applicant if she plans to have children. Which law? ECOA. Questions about having children are off limits. A borrower finds a late payment she never made on her credit report, and disputes it. Credit reports are FCRA. A lender mails a notice explaining what customer data it shares, with a way to opt out. Privacy notices are GLBA. A lender records the race and income of every applicant, and reports them each year. That reporting is HMDA.

The overlap

One overlap to know. The Loan Estimate and the Closing Disclosure come from TILA and RESPA together. That is TRID. The rules for both forms now sit in Regulation Z.

Recap

Settlement, cost, fairness, reports, privacy, reporting. Six jobs, six laws. Next: Regulation B to Z, and what each letter covers. Subscribe so you catch it.

Sources

  • 12 CFR 1024 (Regulation X)
  • 12 CFR 1026 (Regulation Z)
  • 12 CFR 1002, 1003, 1016 and 1022

Independent study material. EstatePass is not affiliated with NMLS or CSBS, and nothing here is legal advice. Any lenders and borrowers in our episodes are fictional.