Which of the following Rules Outlines the Regulations for Hoepa

Ultimately, all regulations regarding HOEPA are listed in 12 CFR 1026 and 12 CFR 1024. The CFPB has published final rules for HOEPA by amending these two regulations. A mortgage that is amortized for a longer period than the actual term of the loan can be described as what type of mortgage? Disclosure that makes it easier for a consumer to compare credit options is required under which regime? In response to concerns about unfair and deceptive mortgage origination and servicing practices, the Board of Governors of the Federal Reserve (the “Board”) has issued significant new rules for mortgages,1 effective October 1, 2009, with the exception of the new trust rules. Federal Reserve Chairman Ben S. Bernanke explained that these new rules are “designed to protect consumers from unfair or deceptive acts or practices in mortgage lending, while keeping loans available to qualified borrowers and supporting sustainable home ownership.” 2 Therefore, the most severe prohibitions in the rule are intended to curb bad lending practices that have occurred in the subprime mortgage market; However, certain provisions apply to all consumer mortgages. The answer is that the borrower buys an investment property. The red flag rule requires financial institutions (including mortgage lenders) that hold a consumer account or other account for which there is a reasonably foreseeable risk of identity theft to develop and implement an identity theft prevention program. Signs that indicate possible identity theft include the presentation of suspicious documents and personally identifying information (e.g., an address that does not match any address in the Consumer Report). The purchase of investment properties is not a red flag in itself. Many of the key provisions of the rule relate to higher-priced loans, a new category of mortgages in Regulation Z that includes expanded consumer protection. This new category of credit should not be confused with existing HEPA loans, often referred to as “section 32” loans.

Higher priced loans have lower triggers than HOEPA loans and therefore include more loans. In addition, the rule applies to higher-priced loans for purchase price mortgages, which are excluded from HEPA coverage. But like HEPA, the final rule for higher-priced loans excludes home equity lines of credit (HELOCs), as well as construction loans and reverse mortgages. The last rule also prohibits lenders from structuring a closed, more expensive loan such as an open line of credit to circumvent the rule`s protections. The rule for HOEPA loans remains in place, albeit with some improvements. In addition, the Dodd-Frank Act gave the Consumer Financial Protection Bureau (CFPB) the authority to issue new regulations to amend the HEPA. With this authority, the CFPB created the 2013 HOEPA rule, which covers expensive mortgages and advisory requirements. The advice covers topics such as important mortgage terms and phrases, what kind of budget the consumer has, and whether the borrower can afford the mortgage. Which of the following representations is most specific to representations in mortgage advertising? 5% of the total loan amount for a loan greater than or equal to $20,000. 8% of the total loan amount, or $1,000 (whichever is lower) for loan amounts under $20,000. The following are included in the calculation of points and fees for HOEPA coverage: In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). This new legislation amended TILA and expanded HEPA coverage to include cash mortgages, which are mortgages used to buy a home.

Dodd-Frank has also increased HOEPA coverage with open credit plans. The most well-known example of an open credit plan is a home equity line of credit (HELOC). In 1994, Congress passed HOEPA as an amendment to the Truth In Lending Act (TILA), also known as Regulation Z. The purpose of the law was to stop abusive refinancing practices and tackle closed-end mortgages with high interest rates and fees. A closed home equity loan is a loan that significantly limits the borrower`s ability to repay, renegotiate or refinance their home loan in advance. Which of the following information will you not find on the banknote for an ARM loan? Which of the following measures is intended to ensure that consumers are informed of the nature and costs of the settlement process? Browse the final rules of the annual HOEPA threshold adjustment Suppose a borrower completes an online loan application that includes the six required elements, but never clicks “Submit.” Which of the following applies to the lender`s obligation to issue a credit estimate? Which of the following does NOT apply to a mortgage lender`s financial liability? The answer is, “Can this amount increase after closing?” The first table on page 1 of the final disclosure is the Credit Conditions Table, which lists the same information as the Credit Estimate Credit Terms Table (i.e., loan amount, interest rate, monthly principal amount and interest, and space to indicate whether the product has a prepayment penalty or lump sum payment). This information is updated to reflect the conditions that apply to closing, and the lender must answer the question “Can this amount increase after closing?” for each item. The answer is that a mortgage lender recommends that all borrowers use the title company, which is located in the same building as the mortgage lender, but with which the mortgage lender or the mortgage lender`s corporation has no other relationship. A related relationship exists when one entity controls, is controlled by, or is under common control by another entity. If a settlement service provider refers a borrower to one or more affiliates with which it holds a property or other economic interest, the borrower must receive a statement for related trade agreements (AfBAs) on a separate sheet of paper. The AfBA disclosure informs the borrower, among other things, that he is generally not obliged to use the affiliate and is free to buy from other providers. Bribes and brokerage fees are also prohibited under the RESPA.

Which of the following best describes the order in which payments are applied under the standard trust indenture? The answer is the borrower who is a seller for a company in which he owns 30%. A self-employed borrower is a person who owns 25% or more of a business. Under the S.A.F.E. Act, the accounting responsibilities of an authorized lender include all of the following, except: Which of the following borrowers would be considered self-employed for underwriting purposes? Homes for All considers itself a non-profit organization. In order for its employees to be exempt from S.A.F.E.`s licensing requirements, each of the following conditions must apply to households, except: The Commission will publish the weekly average prime rates on the Federally Regulated Financial Institutions Review Board website. As a first step, the board will base interest rates on the Freddie Mac Primary Mortgage Market Survey (PMMS), which will be published weekly.5 The rules and accompanying commentary provide additional guidance on how to comply with these requirements. For example, there is no violation of the payment credit rule if a service provider`s failure to credit a payment on the day of receipt does not result in a charge to the consumer or a negative credit information report. If the service provider has written requirements that consumers must follow when making payments and accepts a payment outside of those requirements, the service provider has five days from receipt to credit the payment. However, the comment clarifies that all payment requirements must be reasonable, noting, for example, that it makes sense to have a 17-hour cut-off time to accept payments. The commentary also indicates that it would be appropriate to provide such a statement within five days of receipt of a request. The red flag rule identifies all of the following as possible red flags, except: Which of the following is least considered non-public personal information? The answer is that a mortgage lender must always have its own collateral for an amount that reflects the dollar value of loans made in the previous year.

Every mortgage lender must be covered by a guarantee. If the employer is an employee or sole representative of a mortgage licensee, the employer licensee`s surety may be used to satisfy the lender`s bonding requirement. The amount of the guarantee penalty must reflect the dollar amount of the loans granted. If the lender`s licensing state has developed and administered a fund specifically to protect consumers by providing funds for claims arising from violations of state or federal laws and regulations in lieu of a collateral or net worth requirement, the state may instead require the lender to pay a certain amount into the state fund. The answer is Ginnie Mae. The GNMA, also known as Ginnie Mae, is a Crown corporation within the HUD. Its objective is to facilitate home ownership in the United States and increase the supply of credit for housing construction by channelling funds from the securities market to the mortgage market. This is done by securing mortgages issued by private lenders and insured by the FHA or guaranteed by the VA or USDA, which are then invested in mortgage-backed securities and issued by the private party holding them. Important new rules for open advertising The final rule also includes new advertising requirements for home equity lines of credit, which include promotional prices or promotional payments. In particular, if a HELOC advertisement contains a promotional rate or promotional payment amount, the advertisement must (1) include the period during which the promotional price or payment applies; and (2) pricing and payment information applicable at the end of the Promotion Period.