A summary of the mortgage laws you need to memorize to pass the Federal test
You don't need to know the date but it helps to know the order of when they passed
and when CFPB took over
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Regulation B ECOA Equal Credit Op Act
1975 Federal Reserve Fair Housing Act: race/color/religion/national
or/sex/familial status/handicap Prohibited basis: Race/religion/sex/age/public
assistance Self tests ~ 25 months keep records Free copy of appraisal/ copy 3 days before consummation/ Not consummated closed copies 30 days or less Regulation C Home Mortgage Disclosure Act of 1975 HMDA Regulation C requires many financial institutions to annually disclose loan data about the communities to which they provided residential mortgages. LAR reports Loan Application Register low/mod Was under Federal Reserve now after 2011 CFPB COVERED LOANS Fines: $10000 or $500,000 or 1% worth Regulation N MAP Act Mortgage Acts
Protection Advertisements keep 24 months Homeowner’s Protection Act 1998 Cancel PMI Release PMI 78% or date scheduled or refinance Real Estate Settlement Procedures Act (RESPA),
(Regulation X) 1968 Excludes excess of 25 acres/farm/ commercial
includes: 1-4 and 2nd td a-kickbacks b-unearned and splits c-fees not earned
attorney % servicing sold, foreclosure Regulation Z TILA 1968 APR disclosures Dodd Frank Title
X Federal Trade Commission changed to CFBP UDAPP appraisal updated every 2 years OKAY Section 32 and 35 are difficult for me to memorize as I don't do hard money loans. Draw some diagrams to help you remember. Read out loud, sing about: 32 HOEPA only owner-occupied refinances HIGH COST 1994 The CFPB High-Cost Mortgage Amendments to Truth in Lending Act (Regulation Z) 2014 expanding the types of mortgage loans subject to the protections of the Home Ownership and Equity Protections Act (HOEPA), expand tests for HOEPA coverage, and a new prepayment penalty
threshold test on mortgages. Three separate HOEPA threshold tests based on: • The transaction’s annual percentage rate (APR) • The amount of points and fees paid in connection with the transaction • Prepayment penalties you may charge under the loan or credit agreement first mortgage, the interest-rate trigger point: loan’s APR exceeds 8 percent more than the rates on Treasury securities posted on the 15th of the month prior to the application and is of comparable maturity. APOR 1st APR exceeds 6.5 over 2nd APR exceeds 8.5 over 8.5 % points for first-lien loans if dwelling is
personal property and less than $50,000 Prepay more than 36 months or exceeds 2% 1. Total lender points and fees are greater than 5 percent of the total loan amount. percentage includes certain fees such as origination fees, broker fees, processing fees and servicing
setup fees. 2. 5 % of the total loan amount if loan amount is $20,000 or more; or · The lesser of 8% or $1,000 for loan amounts less than $20,000 (adjusted annually); or TRIGGER: fees and points (mortgage-broker fees) borrowers pay at or before closing exceed $547/561 (2007 amount increased) or 8
percent of the total loan amount, whichever is larger. Extra 3 days rescission default interest rate cannot be greater than the initial rate on the promissory note. no more than two regular monthly periodic payments may be paid in advance
from the loan proceeds at the closing. No prepay unless: The lender has verified the borrowers’ gross income through DTI new loan will be 50 percent or less. The money used to prepay the mortgage does not come from and is not affiliated with the current lender. prohibit a prepayment penalty being charged if current lender refinances the mortgage. The
prepayment penalty does not exceed the first five years
of the mortgage. Due-on-demand clauses restricted. no lender may refinance a borrower into a Section 32 mortgage within the first 12 months of the original Section 32 mortgage, unless the refinance is demonstrated to be in the borrower’s
best interest SECTION 35 High priced
HPML
1st lien APR 1.5 higher than APOR Or 2nd APR
3.5 higher than APOR percentage point
benchmarks that characterize HPMLs are: · 1.5 percent. The rate at which an HPML exceeds the prime rate for a first-lien mortgage, which has a principal balance that does not exceed Freddie
Mac’s maximum principal obligation for
purchase. · 2.5 percent. The rate at which an HPML exceeds the prime rate for a first-lien mortgage, which has a principal balance that does exceed Freddie
Mac’s maximum principal obligation for
purchase. · 3.5 percent. The rate at which an HPML exceeds the prime rate for a
subordinate-lien mortgage Freddie Mac purchase eligible HPMLs that are fixed-rate mortgages or adjustable rate mortgages (ARMs) 5/1 with 7/1 or 10/1 terms. These HPMLs cannot be prepayment
penalty mortgages or ARMs with an initial fixed-rate period of less than
seven years. 35 requires impound except for co-op, construction start, bridge less than 12, reverse,
rural less than 50000 Appraisal required 2 appraisals on flips seller acquired the property 90 days (or fewer) before the borrower’s agreement to purchase the property, and the borrower’s agreement price is greater than 10 percent. or seller acquired the property 91 to 180 days before seller’s acquisition price
by more than 20 percent. Loss mitigation more than once Fines: $10000 1 year jail Telephone Consumer Protection Act 1991 from 1934 Communications
Act FCC regulates Fines $1500 per/ Gramm Leach Bliley 1999 Privacy / affiliated parties
consumer customer 2011 under CFPB Fines: lessor of 1 mill or 1% assets 5 years jail/ FACT ACT identity theft red flags covered account risks fraud alerts Fines $100- $1000/ Fair Credit Reporting Regulation V Opt
out medical Regulation P Privacy notices at start and annual
limit share account number 15 USC 6151 – DO NOT CALL Patriot Act FINANCIAL Crimes Enforcement Network Fincen OFAC
Dept Treasury SAR report Categorize the laws Respa is X = REXPA with pneumonic devices REXPA is about time lines Study a little and in the middle of a topic go get a healthy snack or walk around the building. 25 minutes, 5 minute break Cramming isn't the best. days after the class and study every night for two hours. |
