Mortgage Mortgage Federal Lending Regulations Questions and Answers 3

Question 1

Under the Homeowners Protection Act (HPA), at what loan-to-value ratio must a servicer automatically cancel private mortgage insurance (PMI) on a conventional loan?

Accepted Answer

78%

Answer

The HPA requires automatic termination of PMI when the loan-to-value ratio reaches 78% of the original property value based on the amortization schedule.

Question 2

Which regulation implements the Fair Housing Act's prohibition against discriminatory mortgage lending practices?

Accepted Answer

Regulation B

Answer

Regulation B implements the Equal Credit Opportunity Act, which along with the Fair Housing Act prohibits discriminatory lending practices.

Question 3

What is the Qualified Mortgage (QM) rule's general debt-to-income ratio limit under the ability-to-repay requirement?

Accepted Answer

43%

Answer

The general QM definition under the ATR/QM rule originally set a 43% DTI cap, though recent amendments shifted to a price-based approach.

Question 4

Under RESPA, how long does a mortgage servicer have to acknowledge a qualified written request from a borrower?

Accepted Answer

5 business days

Answer

RESPA requires servicers to acknowledge a qualified written request within 5 business days of receipt.

Question 5

Which federal law requires flood insurance for properties in Special Flood Hazard Areas when the mortgage is federally backed?

Accepted Answer

National Flood Insurance Act

Answer

The National Flood Insurance Act requires flood insurance for properties in designated Special Flood Hazard Areas when the loan involves a federally regulated lender.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Mortgage Federal Lending Regulations Questions and Answers 3