CHCP Regulatory Compliance & Legal Issues 5

Question 1

Under the Servicemembers Civil Relief Act (SCRA), active-duty military personnel are entitled to which protection regarding mortgages?

Accepted Answer

An interest rate cap of 6% on pre-service mortgage obligations

Answer

The SCRA caps the interest rate at 6% on mortgage obligations incurred before active military service, providing financial relief to servicemembers.

Question 2

A closing agent in a state with an attorney-closing requirement allows a non-attorney to conduct the closing. This may result in:

Accepted Answer

Unauthorized practice of law and potential title insurance invalidity

Answer

In attorney-closing states, allowing a non-attorney to conduct a closing constitutes unauthorized practice of law and can jeopardize the validity of title insurance.

Question 3

Which environmental law requires disclosure of known lead-based paint hazards in homes built before 1978?

Accepted Answer

TSCA Title X (Residential Lead-Based Paint Hazard Reduction Act)

Answer

TSCA Title X, implemented through HUD and EPA regulations, requires sellers and lessors of pre-1978 housing to disclose known lead-based paint hazards.

Question 4

What is the purpose of a 'hold harmless' clause sometimes included in closing documents?

Accepted Answer

To indemnify one party against claims or losses arising from another party's actions

Answer

A hold harmless clause allocates risk by requiring one party to indemnify and protect the other from claims or losses arising from specified actions or conditions.

Question 5

Under state usury laws, what do lenders risk if they charge interest rates exceeding the legal maximum?

Accepted Answer

The loan may be voided and the lender may forfeit interest collected

Answer

Usury violations can result in severe penalties including voiding the loan contract, forfeiture of all interest, and in some states, additional damages to the borrower.

(CHCP) Certified Home Closing Professional Practice Test

(CHCP) Certified Home Closing Professional Practice Test

CHCP Regulatory Compliance & Legal Issues 5