Regulation Z pre-existing Flashcards

Regulation Z (pre-existing) Flashcards What is a finance charge?cost of consumer credit as a dollar amount- origination fees, draw fees, premiums, etc.What are irregular transactions?1. multiple advances2. irregular payment periods3. irregular payment amounts In general, the APR shall be considered accurate if it does not vary in either direction by not more than

• regular: 1/8 of 1%2. irregular: 1/4 of 1%

10% cumulative tolerancefees paid to a third party if the bank permitted the consumer to shop for a service priver and the consumer chose from the list provided by the bankrecording fees Charges that are NEVER a finance charge: comparable cash transactionslate feesseller's pointsinitial flood determination feemortgage recording feehomeowner's association dues

early TILS are for:reverse mortgages only

general tolerance for more than $1,000not more than $10 and not less than $10 zero tolerancefees paid to the bank, broker, or affiliate and retained by the bank, broker or affiliatefees paid to a third party if the bank did not permit the consumer to shop for a service providertransfer taxeslender credits General tolerance for $1,000 or lessnot more than $5 and not less than $5 closing cost example. example of 10% cumulative tolerance recording fees who gets an early TIL?ONLY reversed mortgages Who do Reg Z not apply to?non-natural personsbusiness, commercial, agriculture, or organizational creditconsumer credit over $58,300 unless secured by real propertystudent loan programs guaranteed by Title IVpublic utility credit, securities or commoditiesmixed purpose loans- what is the PRIMARY purpose?Limitations/prohibitions of HOEPA:1. balloon payment2. negative amortization3. advance payments4. increased interest rate upon default5.rebates6. prepayment penalties7. acceleration of debt8.home improvement contracts9. notice to assignee10.refinancing within one year11. late fee's12. recommending default13. payoff statements14. financing points and fees For variable rate transactions secured by the consumer's principal dwelling more than one year, in which APR may

increase, the following must be included:

• the fact that there is a variable rate feature2. A statement

that disclosures have been provided earlier Couple wants to refinance primary residence with new money to finance their kids boarding school high school education. what applies?

TRID, RECISSION, HOEPA, HPML, ATR/QM

The four items on a final TIL fed box are APRFinance chargeamount financedtotal of payments What is Reg Z subpart E?Home mortgage transactions Drew and Elsa are purchasing their first home. The home purchase loan will be secured by Elsa's parents primary dwelling. The parents will be co-signers on the loan.Yes- secured by primary dwelling In order for a loan to become a HOEPA loan, at least ONE

of the following three things must happen:

• APR exceeds the APOR2. high points or fees3.

prepayment penalty Average Prime Offer RateThe rate offered to the best-qualified borrowers as established by a survey of lenders.For variable rate transactions not secured by the consumer's principal dwelling less than one year, in which

APR may increase, the following must be included:

circumstances in which rate may increaseany limitations on the increaseeffect of an increaseexample of payment terms

TRID rules apply to:all closed end consumer credit transactions secured by real

property do you have to re-disclose for increased appraisal fee or consumer borrower request revision?NO but you lose out on money if you don't What is included on a TILAPRFinance chargeamount financedtotal of paymentsitemization of amount financedpayment schedulevariable ratedemand featuretotal sales priceinsurance and debt cancellationcertain security interest chargessecurity interestlate paymentprepaymentassumption policyrequired depositno guarantee to refinancecontract referenceinterest rate and payment summary What is Reg Z subpart D?Record Retention If you refinance your mortgage with a new bank, what happens to the disclosure financial charges?

• can be understated by no more than 1 percent2. can be

overstated Alison Warner has requested a loan to purchase a bare lot.The lot will secure the loan; however Alison will wait for at least 24 months to begin building her primary residence on the property. None of the loan proceeds will be used for building a dwelling.No ABC Bank is refinancing a construction loan with a new 1st and 2nd mortgage. The property has never been occupied until now by the borrowers. does reg Z apply No no tolerance/unlimited tolerancefees paid to a third party if the bank permitted the consumer to shop for a service provider and the consumer did not choose from the list provided by the bankprepaid interest, property insurance premiums, escrow amountsproperty taxes and other charges paid for a third party for services not required by the bank closing cost example. example of fee's that have unlimited tolerance?services borrower did shop for, pre-paids, initial escrow payment at closing, other Loan estimate: What fee's are ALWAYS a finance charge?points,origination fee,processing fees,wire transfer fee,flood- life of loanflood certificationtax

transcriptverification of employmentverification of deposittitle-courier feestitle-recording service feeprepaid interest

What is Reg Z subpart A?general- definitions, coverage, fees, and finance charges Who does Reg Z apply to?consumers (all natural persons)personal or household purposesfinance charge or payable in more than four installmentsoffering or extension of credit is done regularly

The special information booklet applies to: closed end purchase transactions

The bank originates a loan to purchase land with intent to construct a personal residence in the future. Which applies?

TRID What is Reg Z subpart B?open-end credit Billy Bones applies for a loan at ABC Bank to purchase a houseboat. The houseboat will serve as collateral on the loan. Billy will use the houseboat as his primary residence.No Charges that MAY be a finance charge unless certain

conditions are met:

credit life, disabilityunless that you disclose that insurance is not required, fee or premium for the initial term of coverageconsumer signs or initials an acceptance of coverageproperty insurance premiumsunless you disclose that coverage can be obtained from another party of the consumer's choiceif the coverage comes from the creditor, the premium must also be disclosedreal estate related fees- not fees charged after closingclosing agent fees- if the bank required the servicesecurity interest charges- fees or premium must be itemized and disclosedapplication fee's- whether or not credit is actually extended Annual Percentage Ratestake into account all relevant factors and to provide a uniform measure for comparing the cost of carious credit transactions- will always be higher than your interest rate.Must be disclosed as a single rate only What is Reg Z subpart C?closed-end credit After the initiation of a foreclosure on a customer's house,

the finance charges are accurate if:

• not understated by more than $352. overstated

Three categories within the ability to repay rule:general ATR- burden on bankqualified mortgage- burden on borrowernon-standard- even more burden on borrower closing cost example. Example of fee's that are zero tolerance?origination charges, services borrower did not shop for, state tax/stamps What is Reg Z subpart Fprivate education loans Truth in Lending ActAll individuals shopping for credit could do so as educated consumers.What are the three factors needed to be disclosed to prevent right of rescission?

• APR2. finance charges3. amount financed

true or false. HOEPA and HPML apply to construction loans?false- only to homes.what are the two ways to tell if a real estate tolerance is accurate?

• can't be understate by more than $1002. greater than

the amount required to be disclosed If you do not disclose the three factors and right of recession happens, what does the time period change to?

• days to 3 years