Mortgage Mortgage Federal Laws and Regulations Questions and Answers 3

Question 1

Which federal regulation implements the Truth in Lending Act (TILA) for mortgage transactions?

Accepted Answer

Regulation Z

Answer

Regulation Z, issued by the Consumer Financial Protection Bureau, implements TILA's disclosure requirements for consumer credit transactions including mortgages.

Question 2

Under the Dodd-Frank Act, what is the maximum debt-to-income ratio generally permitted for a Qualified Mortgage (QM)?

Accepted Answer

43%

Answer

The Dodd-Frank Act's Ability-to-Repay rule generally sets a 43% DTI threshold for loans to qualify as Qualified Mortgages under the general QM definition.

Question 3

The Fair Housing Act prohibits mortgage lending discrimination based on all of the following EXCEPT which?

Accepted Answer

Credit history

Answer

Credit history is a legitimate underwriting factor; the Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, and disability.

Question 4

What document must a mortgage lender provide within three business days of receiving a loan application, as required by the TILA-RESPA Integrated Disclosure (TRID) rule?

Accepted Answer

Loan Estimate

Answer

The TRID rule requires lenders to provide a Loan Estimate within three business days of receiving a mortgage application.

Question 5

Under the Gramm-Leach-Bliley Act (GLBA), mortgage lenders are required to provide borrowers with which of the following?

Accepted Answer

An initial privacy notice explaining information-sharing practices

Answer

The GLBA requires financial institutions, including mortgage lenders, to provide customers with a privacy notice describing their information collection and sharing practices.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Mortgage Federal Laws and Regulations Questions and Answers 3