A buyer purchases a condominium built in 1980 with a federally related mortgage. The lender's flood determination shows the property is in a special flood hazard area. What must the lender do?
Correct Answer
C) Notify the borrower and require flood insurance
Federal law requires the lender to provide written flood-hazard notice and to require the borrower to obtain and maintain flood insurance when the secured property is in a special flood hazard area.
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- → What is the 'Annual Percentage Rate' (APR) as disclosed on the Loan Estimate and Closing Disclosure?
- → The Closing Disclosure replaced which two older disclosure forms that were previously used in residential mortgage transactions?
- → Under TRID, all of the following are included on Page 1 of the Loan Estimate EXCEPT.
- → Under TRID, all of the following pieces of information trigger the lender's obligation to provide a Loan Estimate EXCEPT.
- → A borrower wants to waive the three-business-day waiting period after receiving the Closing Disclosure because an emergency requires the borrower to move into the property immediately. Under TRID, can the borrower waive the waiting period?
- → A real estate agent is explaining TRID disclosures to a buyer. All of the following are on the Closing Disclosure EXCEPT.
- → A borrower is told by the lender that certain closing costs may change between the Loan Estimate and Closing Disclosure. Under TRID, which of the following fees has the strictest tolerance limit?
- → The Closing Disclosure includes an 'Other Costs' section. A borrower notices a charge for a home inspection that the borrower ordered independently. Who is responsible for this cost?
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- → A borrower receives a Loan Estimate and notices that the estimated title insurance fee is $1,200. At closing, the Closing Disclosure shows the title insurance fee is $1,400. The borrower was allowed to shop for title insurance from a list provided by the lender. Under TRID tolerance rules, is this increase permissible?
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