What are the penalties for violation of RESPA/Section 8? Correct Answer: Section 8 of RESPA prohibits referral fees and other forms of kickbacks/fee
... [Show More] splitting. Penalties includes fines of up to $10,000 and up to one year in prison.
Disclosures due within three business days of loan application... Correct Answer: Loan Estimate
Your Home Loan Toolkit
CHARM Booklet
Variable-rate program disclosures
Home equity plan disclosures
Notice of Right to Receive an Appraisal Report
Definition of the term "creditor" Correct Answer: The Equal Credit Opportunity Act (ECOA), and the Fair Credit Reporting Act (FCRA), and the Fair and Accurate Credit Transactions Act (FACTA) all use the same definition of a creditor. A creditor is any person who regularly extends, renews, or continues credit. Loan originators, lenders, and other mortgage professionals are included in this definition.
Transactions reported under HMDA... Correct Answer: Purchases
Refinances
Home improvement loans
Pre-qualifications must also be reported along with their disposition
When a borrower's LTV reaches 80%... Correct Answer: Permitted to request discontinuation of PMI. The Homeowners Protection Act (HPA) sets the requirements for discontinuation of PMI. It is at the lender's discretion to permit discontinuation - the borrower must be current on payments.
An initial privacy notice is due... Correct Answer: At the time that a customer relationship is established. The Gramm-Leach-Bliley Act requires financial institutions (including mortgage brokers) to provide an initial privacy notice "...not later than when you establish a customer relationship..." The initial privacy notice should also be accompanied by the opt-out notice.
HMDA requires loan originators to... Correct Answer: Request information on an applicant's race, ethnicity and sex. The applicant may decline to answer, in which case the loan originator must make a best guess based on visual observation.
A permissible purpose is required... Correct Answer: When obtaining a credit report. Under FCRA, lenders and mortgage professionals must provide the consumer reporting agency with a certification of permissible purpose in order to pull credit. Loan qualification is considered a permissible purpose. [Show Less]