Mortgage Mortgage Federal Mortgage-Related Laws Questions and Answers 3

Question 1

What is the maximum period a lender can require a borrower to maintain a PMI escrow cushion under the Homeowners Protection Act?

Accepted Answer

Two months

Answer

One month

Answer

No cushion is allowed

Answer

Six months

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

36%

Answer

41%

Answer

50%

Question 3

Which federal law established the Consumer Financial Protection Bureau (CFPB) with authority over mortgage lending regulations?

Accepted Answer

Dodd-Frank Wall Street Reform and Consumer Protection Act

Answer

Sarbanes-Oxley Act

Answer

Gramm-Leach-Bliley Act

Answer

Federal Housing Enterprises Financial Safety and Soundness Act

Question 4

Under the Truth in Lending Act, a borrower's right of rescission on a refinance of their primary residence lasts how many business days?

Accepted Answer

Three business days

Answer

One business day

Answer

Five business days

Answer

Seven business days

Question 5

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires which of the following?

Accepted Answer

Mortgage loan originators to be registered or licensed through the NMLS

Answer

All mortgage loans to carry fixed interest rates

Answer

Lenders to offer at least three loan product options

Answer

Borrowers to complete homeownership counseling before closing

Question 6

Under the Gramm-Leach-Bliley Act (GLBA), what primary obligation do mortgage lenders have regarding borrower information?

Accepted Answer

They must provide privacy notices and safeguard nonpublic personal information

Answer

They must share all borrower data with credit bureaus monthly

Answer

They must publish borrower default rates annually

Answer

They must obtain borrower consent before running a credit check