CRU Regulatory Framework & Compliance 3

Question 1

Which regulation implements the Truth in Lending Act (TILA) and governs disclosure requirements for residential mortgage loans?

Accepted Answer

Regulation Z

Answer

Regulation Z implements TILA and requires creditors to disclose the cost of credit, including the APR, finance charges, and payment terms.

Question 2

Under HMDA, which institutions are required to collect and report mortgage loan data?

Accepted Answer

Depository and non-depository institutions meeting certain asset and loan volume thresholds

Answer

HMDA coverage extends to both depository institutions and non-depository lenders that meet specific asset size and loan volume thresholds.

Question 3

An underwriter reviewing a loan file notices the property appraisal was ordered by the loan officer who is also the borrower's brother-in-law. This situation most likely violates which regulation?

Accepted Answer

The Appraisal Independence Requirements under Dodd-Frank

Answer

Dodd-Frank's Appraisal Independence Requirements prohibit loan production staff from selecting, retaining, or influencing appraisers to ensure independence.

Question 4

What is the primary purpose of the Flood Disaster Protection Act as it applies to residential underwriting?

Accepted Answer

Requiring borrowers to purchase flood insurance if the property is in a Special Flood Hazard Area

Answer

The FDPA requires lenders to ensure borrowers obtain flood insurance when the property securing the loan is located in a Special Flood Hazard Area (SFHA).

Question 5

Under the ATR/QM rule, which of the following loan types is automatically considered a Qualified Mortgage without meeting the standard DTI and points-and-fees tests?

Accepted Answer

Loans eligible for purchase by Fannie Mae or Freddie Mac (GSE QM)

Answer

The GSE Patch (now transitioned to standard QM) allowed loans eligible for GSE purchase to qualify as QMs without meeting the standard 43% DTI requirement.

(CRU) Certified Residential Underwriter Practice Test

(CRU) Certified Residential Underwriter Practice Test

CRU Regulatory Framework & Compliance 3