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Federal Regulations and Compliance Standards Flashcards

7 cards from real CMC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Federal Regulations and Compliance Standards flashcards as text

  1. Under RESPA, a 'kickback' is defined as any fee, kickback, or thing of value paid for the referral of settlement service business. What is the maximum criminal penalty for a RESPA Section 8 violation?

    Answer: $10,000 fine and up to 1 year imprisonment

    RESPA Section 8 violations carry a criminal penalty of up to $10,000 in fines and up to one year in prison.

  2. The Qualified Mortgage (QM) rule's 'points and fees' cap for loans of $100,000 or more is:

    Answer: 3%

    For loans of $100,000 or more, the QM points and fees cap is 3% of the total loan amount.

  3. Which federal law requires lenders to provide a Loan Estimate within 3 business days of receiving a completed loan application?

    Answer: TRID (TILA-RESPA Integrated Disclosure)

    TRID, which combined TILA and RESPA disclosures, mandates the Loan Estimate be delivered within 3 business days of application.

  4. Under the Servicemembers Civil Relief Act (SCRA), what is the maximum interest rate a lender may charge on a mortgage for an active-duty servicemember?

    Answer: 6%

    SCRA caps mortgage interest rates at 6% per year for servicemembers who entered active duty after taking out the loan.

  5. The Home Mortgage Disclosure Act (HMDA) was enacted primarily to:

    Answer: Detect discriminatory lending patterns and ensure credit is available in communities

    HMDA requires lenders to collect and report loan data to help regulators identify potential redlining and fair lending violations.

  6. A lender charges a borrower $1,200 for a credit report that actually costs $30. Under which law is this most likely a violation?

    Answer: RESPA Section 8 prohibiting fee splitting

    RESPA Section 8 prohibits marking up third-party settlement service fees beyond their actual cost.

  7. The Ability-to-Repay (ATR) rule requires lenders to consider which of the following before extending credit?

    Answer: Eight specific underwriting factors including income, assets, employment, credit history, and monthly payment

    The ATR rule requires lenders to evaluate eight specified factors to verify a borrower's ability to repay the mortgage.

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