Question 1: All of the following, WITH THE EXCEPTION OF?, are examples of finance charges.

• title insurance (Correct answer)
• a loan processing fee
• interest
• points

Correct answer: title insurance

Finance charges are the costs of credit, expressed as a dollar amount, that a consumer pays directly or indirectly to obtain credit. These typically include interest, loan processing fees, and points. Title insurance, while a closing cost, is generally considered a third-party charge for a service that protects the lender and borrower, rather than a direct cost of obtaining the credit itself, and is therefore not typically a finance charge under TILA.

Question 2: Except for, all of the following must be protected by HOEPA?

• closed-end home equity loans
• purchase money mortgages
• reverse mortgages (Correct answer)
• refinances

Correct answer: reverse mortgages

The Home Ownership and Equity Protection Act (HOEPA) provides special protections for "high-cost mortgages," which include certain closed-end home equity loans, purchase money mortgages, and refinances that exceed specific rate or fee thresholds. Reverse mortgages, however, are explicitly exempt from HOEPA's coverage due to their unique structure and purpose.

Question 3: What does "change of circumstance" NOT entail?

• a disaster
• a change in the borrower's monthly income (Correct answer)
• the need for flood insurance
• a change in the loan amount after the Good Faith Estimate has been issued

Correct answer: a change in the borrower's monthly income

A "change of circumstance" under TRID (TILA-RESPA Integrated Disclosure) rules allows a lender to revise a Loan Estimate and reset fee tolerances. These typically involve unforeseen events or new information affecting the loan, such as a disaster or the need for flood insurance. A change in the borrower's monthly income, while impacting qualification, is generally not considered a "change of circumstance" that permits a revised Loan Estimate for tolerance purposes, as income is part of the initial application assessment.

Question 4: The loan estimate must be delivered or mailed to the borrower as soon as a complete application has been received.

• 7 business days after receipt of the application
• 7 calendar days after receipt of the application
• 3 calendar days after receipt of the application
• 3 business days after receipt of the application (Correct answer)

Correct answer: 3 business days after receipt of the application

Under the TILA-RESPA Integrated Disclosure (TRID) rule, lenders are required to provide the Loan Estimate to the borrower within three business days of receiving a complete loan application. This ensures borrowers receive timely and transparent information about their loan terms and costs, allowing them to compare offers effectively.

Question 5: All of the following are protected by the Truth in Lending Act, EXCEPT?

• it provides minimum standards for most residential loans secured by a dwelling
• it gives guidance to a lender on whether they should grant a loan to a borrower (Correct answer)
• it requires all lenders to have uniform set of disclosures
• it requires all lenders to have uniform set of disclosures

Correct answer: it gives guidance to a lender on whether they should grant a loan to a borrower

The Truth in Lending Act (TILA) is primarily a disclosure law designed to protect consumers by requiring lenders to provide clear information about the costs and terms of credit. It sets minimum standards for residential loans and mandates uniform disclosures, but it does not provide guidance to lenders on underwriting decisions or whether to grant a loan; that falls under other regulations like ECOA and the lender's own policies.

Question 6: When must a lender deliver a copy of the appraisal to the borrower?

• 3 days before a loan closes (Correct answer)
• 3 days after the loan is completed
• after a consumer has pain for their appraisal
• 7 days before a loan closes

Correct answer: 3 days before a loan closes

Under the Equal Credit Opportunity Act (ECOA), lenders are required to provide applicants with a copy of their appraisal and all other written valuations developed in connection with an application for credit secured by a first lien on a dwelling. This must be delivered at least three business days prior to loan closing, allowing the borrower time to review it.

Question 7: Which information on a mortgage application CANNOT be omitted by the applicant?

• sex
• ethnicity

Under the Home Mortgage Disclosure Act (HMDA), lenders are required to collect information on an applicant's sex and ethnicity for monitoring purposes. While an applicant has the option to decline providing this information directly, the lender is still obligated to record it based on visual observation or surname if not provided. Therefore, the information itself cannot be entirely omitted from the application record by the lender, even if the applicant chooses not to furnish it.