Mortgage Federal Mortgage-Related Laws Questions and Answers

Question 1

A title company hosts a free dinner for a group of real estate agents.
During the dinner, the title company's representative implies that they expect future business referrals in return for the meal.
Which federal law is MOST LIKELY violated by this arrangement?

Accepted Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Truth in Lending Act (TILA)

Answer

Equal Credit Opportunity Act (ECOA)

Answer

Home Mortgage Disclosure Act (HMDA)

Question 2

Under the Truth in Lending Act (TILA), which of the following advertisement phrases is a 'trigger term' that would require additional disclosures, such as the APR and terms of repayment?

Accepted Answer

"Low down payment of only $5,000"

Answer

"Easy monthly payments"

Answer

"FHA and VA loans available"

Answer

"Great rates available"

Question 3

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction. Which of the following is NOT a protected class under ECOA?

Accepted Answer

Occupation

Answer

Marital Status

Answer

Age

Answer

Receipt of public assistance income

Question 4

A lender approves a mortgage for a borrower based solely on the borrower's high credit score and the property's appraised value, without verifying the borrower's income or current debt obligations. This practice most directly violates the principles of which rule?

Accepted Answer

The Ability-to-Repay (ATR) Rule

Answer

The Homeowners Protection Act (HPA)

Answer

The Fair Credit Reporting Act (FCRA)

Answer

The SAFE Act

Question 5

What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?

Accepted Answer

To require lenders to report data to help identify potential discriminatory lending patterns.

Answer

To set maximum interest rates for high-cost mortgages.

Answer

To provide borrowers with a 3-day right to cancel certain mortgage transactions.

Answer

To regulate the compensation of mortgage loan originators.

Question 6

A borrower is refinancing the mortgage on their primary residence with a new lender. According to the Truth in Lending Act (TILA), they are entitled to a three-day right of rescission. This right of rescission would NOT apply if the borrower was:

Accepted Answer

Purchasing a new primary residence.

Answer

Taking out a Home Equity Line of Credit (HELOC).

Answer

Refinancing their loan with their current lender.

Answer

Obtaining a reverse mortgage.

A title company hosts a free dinner for a group of real estate agents.During the dinner, the title company's representative implies that they expect future business referrals in return for the meal.Which federal law is MOST LIKELY violated by this arrangement?

A title company hosts a free dinner for a group of real estate agents.
During the dinner, the title company's representative implies that they expect future business referrals in return for the meal.
Which federal law is MOST LIKELY violated by this arrangement?