Regulatory Compliance & Lending Guidelines Flashcards
7 cards from real CMPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance & Lending Guidelines flashcards as text
The Mortgage Disclosure Improvement Act (MDIA) added a requirement that borrowers must receive the initial Truth-in-Lending disclosure within how many business days of application?
Answer: 3 business days
MDIA requires lenders to provide the initial TIL disclosure within 3 business days of receiving a completed loan application.
Under conventional Fannie Mae/Freddie Mac guidelines, what is the standard maximum debt-to-income (DTI) ratio for a manually underwritten loan without compensating factors?
Answer: 45%
Conventional guidelines generally allow a maximum DTI of 45% for manually underwritten loans, though DU/LP may approve higher DTIs with strong compensating factors.
A lender who steers a creditworthy borrower into a subprime loan when they qualify for a prime product may violate which law?
Answer: The Fair Housing Act and ECOA anti-steering provisions under Regulation Z
Anti-steering provisions under Regulation Z (implementing Dodd-Frank) prohibit steering borrowers toward non-QM or higher-cost loans when they qualify for better products.
Under the Servicemembers Civil Relief Act (SCRA), what is the maximum interest rate a lender can charge on a mortgage taken out before active duty military service?
Answer: 6% per annum
The SCRA caps interest rates at 6% per annum on pre-service obligations, including mortgages, while a servicemember is on active duty.
Which disclosure must a lender provide if the APR on a revised Loan Estimate increases by more than 1/8 of 1% from the initial estimate?
Answer: A revised Loan Estimate, triggering a new 3-business-day waiting period
Under TRID, if a valid changed circumstance causes the APR to increase by more than 1/8%, the lender must issue a revised Loan Estimate and restart the 3-business-day waiting period.
The Private Mortgage Insurance (PMI) Cancellation Act (Homeowners Protection Act) requires automatic termination of PMI when the borrower's LTV reaches what level based on the original amortization schedule?
Answer: 78% LTV
The Homeowners Protection Act requires automatic PMI cancellation when the loan balance reaches 78% LTV based on the original amortization schedule and original property value.
A lender operating in multiple states must comply with which regulation when determining how to handle conflicting state and federal disclosure requirements?
Answer: Federal chartered banks follow OCC preemption rules; state-chartered lenders follow state law unless federally preempted
Federally chartered banks may invoke OCC preemption of state laws under certain conditions, while state-chartered institutions generally must comply with both state and applicable federal requirements.