FREE Mortgage Regulatory Compliance (RESPA, TILA) Questions and Answers

Question 1

Which of the following disclosures is mandated by RESPA and provides an estimate of the costs a borrower is likely to incur at settlement, typically required within three business days of a loan application?

Accepted Answer

Loan Estimate

Answer

Truth in Lending Disclosure (TIL)

Answer

Appraisal Report

Answer

Closing Disclosure

Question 2

Under what circumstance would a lender be permitted to charge a fee to a loan applicant prior to providing the Loan Estimate and obtaining the borrower's intent to proceed?

Accepted Answer

To cover the cost of a credit report

Answer

To expedite the underwriting process

Answer

To secure the interest rate

Answer

To pay for a property appraisal

Question 3

A loan originator refers a borrower to a specific title company with whom the originator has an affiliated business arrangement. Which of the following is REQUIRED by RESPA in this scenario?

Accepted Answer

The loan originator must provide a written Affiliated Business Arrangement Disclosure at or before the time of referral.

Answer

The loan originator must guarantee the lowest possible fees from the affiliated company.

Answer

The loan originator must obtain verbal consent from the borrower for the referral.

Answer

The loan originator must split the referral fee with the affiliated title company.

Question 4

Which of the following is a primary purpose of the Truth in Lending Act (TILA)?

Accepted Answer

To ensure consumers are informed about the true cost of credit.

Answer

To prohibit kickbacks and unearned fees in real estate transactions.

Answer

To regulate the establishment and maintenance of escrow accounts.

Answer

To provide a uniform system for recording property ownership.

Question 5

Under TILA, if an advertisement for a mortgage loan states the interest rate, what other specific disclosure is 'triggered' and must also be included in the advertisement?

Accepted Answer

The Annual Percentage Rate (APR)

Answer

The total amount of principal paid over the life of the loan

Answer

The appraised value of the property

Answer

The minimum credit score required

Question 6

A borrower is refinancing their primary residence. How long is the rescission period, as required by TILA, during which the borrower can cancel the loan without penalty?

Accepted Answer

3 business days

Answer

5 calendar days

Answer

7 calendar days

Answer

10 business days