Affinity Exam Prep Course Flashcards

Affinity Exam Prep Course Flashcards The regulations allow consumers to waive this seven day period for a "Bona fide financial emergency" CFPBConsumer Financial Protection Bureau - New sheriff in town LE provides disclosure of-The interest rate lock and info about it-Total Interest Percentage (TIP) - informs the borrower of the total amount of interest the borrower will pay over the loan term as a percentage of the loan amount-Provides comparisons of payments made and the principal reduction of the loan in the first 5 years-Estimated Cash to Close-Provides info on servicing and delivery of appraisal-Disclosure about the likelihood of future refinance transactions of the subject loan is made-Designated place for borrowers to sign and confirm they have received the LE What two entities created TRID?Dodd-Frank Act and the CFPB -General TILA disclosures must be kept for two years-LE 3 years-CD 5 years TILA Disclosures Creditors must retain records that show compliance with CD requirements and all related documents for must be kept for At least 5 years after consummation Considers the APR accurate if it does not vary above or below the APR initially disclosed by more

than:1/8%(.125%)for regular/traditional1/4 (.25%) for

irregular/non-traditional TILA - Qualified Mortgage Creditors must retain records that show compliance with LE requirements must be kept for

• years

TRID rule does not apply to:-Home Equity Lines of Credit HELOCs-Reverse

mortgages-Mortgages for mobile homes not secured by real estate-Loans from anyone who funds no more than five loans in a calendar year

RESPA covers:1-4 unit Residential Property (owner occupied)

The settlement agent (title agent) is responsible forProviding the statement to the seller When this is issued - it receives a "safe harbor" (legal protection) if the borrower goes into foreclosure-No doc loans (NINA) not allowed-Sets a max DTI of 43 percent-Caps points and fees at 3 percent / points-Loan terms over 30 years is prohibited-Interest only loans not allowed/neg amortization loans not allowed-Prohibits use of teaser rates-Requires the ARMs be underwritten to the max interest rate that can be charged during the first five years of the loan-Prepayment penalties are prohibited

except for certain fixed rate, qualified loans TILA - Ability to Repay What is the purpose of the CFPBto promote financial stability through accountability and transparency Once a complete application is obtained and the borrower has indicated their intend to proceed - initial disclosures must be provided - unless -The applicant withdraws the application-The lender turns down the loan before the 3 business day period Other considerations-Appraisal-Assumption-Homeowner's insurance-Late payment-Loan Acceptance-Refinance-Servicing

Valid change related to the CD-Changes to the loan's APR-Changes to the loan product-The addition of a prepayment penalty MortgageWritten instrument using real property to secure repayment of a debt -Loan calculations-Other disclosures table-Contact info-Confirm Receipt TILA Fannie MaeFederal National Mortgage Association (FNMA)-Created in 1938 as a means to assist the housing sector in the midst of the Great Depression-Largest mortgage investor-Government Sponsored Enterprise (GSE) that acts as a quasi-governmental agency for the purpose of making a secondary market for mortgages What is the purpose of RESPA?To help consumers become better shoppers for settlement services

Primary Market lenders include:-Mortgage Banker-Mortgage Broker-Commercial

Banks-Savings and Loan Associations (Thrifts)-Credit Unions-Finance Companies-Mutual Savings Banks National exam withUST (Uniform State Test)120 questions, scored on 115 What are the four initial disclosures that must be provided at or within 3 business days of application

• Home Loan Toolkit - Know Before You Owe Booklet -

Previously HUD Special Info Booklet (purchases only) (RESPA)2. Loan Estimate (TILA)3. Mortgage Servicing Disclosure Statement (lenders intentions) (RESPA)4. List of HUD approved home counselors (RESPA) Page one of LE: Costs at Closing TableTwo categories: Estimated closing costs and cash to close PrepaidsAny amounts that the consumer will pay in advance of the first scheduled payments-Homeowner's insurance premium (__ months)-MIP (__ months)-Prepaid Interest ($____ per day for __ days @ ___%)-Property taxes (__ months) Ginnie MaeGovernment National Mortgage Association (GNMA)-Created by Congress in 1968 and is apart of HUD-It does NOT purchase or sell loans on the secondary market-Issues GUARANTEES on bond pools that are comprised of government backed loans (FHA, VA, and USDA) Initial CD must be delivered to the borrower 3 business days prior to loan consummation May NOT issue revisionsto the LE because the MLO later discovers technical errors, miscalculations, or underestimation of charges

• Current income or assets2. Current employment status3.

Borrower's credit history4. Monthly payment for the mortgage5. Borrower's monthly payments on other simultaneous mortgage loans6. Monthly payments for other mortgage related expenses7. Other debts of the borrower8.Monthly debt payments compared to the borrower's monthly income (DTI cannot exceed 43%)

TILA - HOEPA

20 hours ofPre-licensing requirements Initial Escrow Payment at ClosingPlacing into a reserve or escrow account for the payment of insurance and taxes

• LE and CD2. CHARM booklet (Consumer handbook on

ARM)3. When your home is on the line booklet (HELOC and REFI)4. Requires the disclosure of the APR. Another word used for APR is Effective Rate TILA Business Day

Goes over all of the loan disclosuresPage five of the CD:

The purpose of TRID:-Help consumers understand their options-Avoid surprises

at closing-Designed to help consumers become more informed shoppers Renewal PeriodNovember 1st - December 31st The creditor (lender) is responsible for Providing the statement to the borrower

Comparisons table-In 5 years: the creditor must disclose the total principal,

interest, PMI, and loan costs paid in the first 60 months of the loan term, and separately disclose the amount of principal that the consumer will have paid off during this period of time-APR-TIP RESPA Section 9-Deals with title insurance-It is illegal for a property seller to require the buyer to use a particular title insurance company as a condition of sale unless the sellers pays for the title insurance and all other title related fees-Allows buyers to sue for an equal amount to three times (treble damages) all charges made for the title insurance What is the violation of RESPA?Fine up to $10,000 and/or imprisonment up to one year A final CD is delivered atLoan consummation

RESPA does not cover:All cash sales, rental property of more than 4 units,

commercial property and property of 25 acres or more (agricultural).NO fee except the ______ is allowed prior to delivering the LE form Credit report fee Page two of the CD:Page three of the CD: RESPA Section 10 Monthly LimitNo more than 1/12th of annual disbursement Availability of termsMust be available 10 business days What are the disclosures that are required to be sent after settlement?

• Annual Escrow Statement (RESPA Section 10)2.

Servicing Transfer Statement (RESPA)-Goodbye Letter (15 days prior to transfer - no penalty for 1st 60 days) The CD generally must contain the ______ and costs of the transaction Actual terms What are the disclosures that are required to be sent before settlement?

• AfBA Disclosure (1%-NOT 10%) (RESPA)2. Closing

Disclosure: 3 days prior to consummation (TILA)

All calendar days except Sundays and legal holidays-Exception to this rule is LE (any day in which the creditor's office is open for business) TILA - Triggering Terms