Practice Test Geeks(CRU) Certified Residential Underwriter Practice Test
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Regulatory Framework & Compliance Flashcards

7 cards from real CRU 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 Framework & Compliance flashcards as text

  1. Which of the following best describes 'reverse redlining' in the context of fair lending?

    Answer: Targeting minority neighborhoods with predatory or unfavorable loan products

    Reverse redlining involves targeting protected class members or minority communities with exploitative, high-cost, or predatory loan products.

  2. Under the Servicemembers Civil Relief Act (SCRA), what interest rate cap applies to pre-service mortgage obligations for active-duty military borrowers?

    Answer: 6%

    The SCRA caps interest rates at 6% per year on mortgage obligations incurred before active-duty service for qualifying servicemembers.

  3. An underwriter is reviewing a loan file where the borrower's income consists entirely of alimony payments. Under ECOA, how must the underwriter treat this income?

    Answer: It must be considered if the borrower chooses to disclose it and it is likely to continue

    ECOA prohibits creditors from discounting or ignoring income from alimony, child support, or separate maintenance if the borrower discloses it and it is reasonably expected to continue.

  4. Which federal law requires financial institutions to establish anti-money laundering (AML) programs and report suspicious activity related to mortgage transactions?

    Answer: USA PATRIOT Act / Bank Secrecy Act

    The Bank Secrecy Act, as amended by the USA PATRIOT Act, requires financial institutions to implement AML programs and file Suspicious Activity Reports (SARs).

  5. Under TRID (TILA-RESPA Integrated Disclosure) rules, how many business days before consummation must the Closing Disclosure be received by the borrower?

    Answer: 3 business days

    TRID requires that borrowers receive the Closing Disclosure at least 3 business days before loan consummation.

  6. A state law prohibits prepayment penalties on all residential mortgages. A federally chartered national bank wishes to include a prepayment penalty in its mortgage contracts. Which principle governs this conflict?

    Answer: Federal preemption allows the national bank to override the state prohibition

    Under the National Bank Act, OCC regulations preempt state consumer financial laws that prevent or significantly interfere with a national bank's exercise of its powers.

  7. Which of the following triggers a new three-business-day waiting period under TRID rules after the Closing Disclosure has been delivered?

    Answer: An increase in the APR above the disclosed rate by more than 1/8 of a percent for a fixed-rate loan

    Under TRID, an APR increase exceeding 1/8 percent (fixed) or 1/4 percent (variable) requires a revised CD and a new 3-business-day waiting period.