Mortgage Regulations and Compliance Flashcards
7 cards from real CMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Mortgage Regulations and Compliance flashcards as text
Under TRID, what is the waiting period between delivery of the Closing Disclosure and loan consummation?
Answer: 3 business days
Borrowers must receive the Closing Disclosure at least 3 business days before consummation, giving them time to review final loan terms.
A loan officer steers a creditworthy borrower into a subprime loan when they qualified for a prime product. Under fair lending laws, this is an example of:
Answer: Steering
Steering occurs when a lender directs a borrower toward a loan product that is less favorable than what they qualify for, often based on a protected characteristic.
Which Dodd-Frank provision specifically addresses mortgage originator compensation and prohibits compensation based on loan terms?
Answer: Section 1402
Section 1402 of Dodd-Frank amended TILA to prohibit mortgage originator compensation based on loan terms other than the loan amount.
Under Regulation Z's high-cost mortgage (HOEPA) rules, a prepayment penalty is prohibited if the penalty period extends beyond:
Answer: 3 years after consummation
HOEPA prohibits prepayment penalties on high-cost mortgages that extend beyond 3 years from the date of consummation.
The CFPB's Loan Originator Compensation rule prohibits dual compensation, meaning a loan originator cannot receive payment from:
Answer: Both the lender and the borrower on the same transaction
The Loan Originator Compensation rule prohibits originators from receiving compensation from both the consumer and any other person on the same transaction.
Under the flood insurance rules of the National Flood Insurance Act, flood insurance is required when a federally regulated lender originates a loan on a property located in:
Answer: A Special Flood Hazard Area (SFHA)
Mandatory flood insurance purchase requirements apply when a federally regulated lender makes a loan secured by property located in a Special Flood Hazard Area (Zones A or V).
A lender's written appraisal independence policy is required under which regulatory framework?
Answer: The Appraisal Independence Requirements under Dodd-Frank/TILA
Dodd-Frank Section 1472 amended TILA to codify Appraisal Independence Requirements (AIR), prohibiting lenders from improperly influencing appraisers.