CHCP Regulatory Compliance & Legal Issues 3

Question 1

Under the USA PATRIOT Act, which requirement must financial institutions comply with during real estate closings to combat money laundering?

Accepted Answer

Verify the identity of all parties through a Customer Identification Program (CIP)

Answer

The USA PATRIOT Act requires financial institutions to implement a Customer Identification Program (CIP) to verify the identity of all customers.

Question 2

A closing agent receives a cash payment of $11,000 from a buyer at the closing table. What federal form must be filed?

Accepted Answer

Form 8300

Answer

IRS Form 8300 must be filed for cash payments exceeding $10,000 received in a trade or business transaction, including real estate closings.

Question 3

Which federal agency enforces the Real Estate Settlement Procedures Act (RESPA)?

Accepted Answer

Department of Housing and Urban Development (HUD) / CFPB

Answer

Enforcement of RESPA transferred from HUD to the Consumer Financial Protection Bureau (CFPB) when the CFPB was established under Dodd-Frank in 2011.

Question 4

An affiliated business arrangement (AfBA) disclosure under RESPA must be provided:

Accepted Answer

At or before the time the referral is made

Answer

RESPA requires the AfBA disclosure to be given to the consumer at or before the time of referral so the consumer can make an informed choice.

Question 5

Under the Home Mortgage Disclosure Act (HMDA), what is the primary purpose of collecting loan data?

Accepted Answer

To identify potential discriminatory lending patterns

Answer

HMDA requires financial institutions to report mortgage data to help regulators identify and address discriminatory or predatory lending practices.

(CHCP) Certified Home Closing Professional Practice Test