Mortgage Federal Laws and Regulations

Question 1

Under RESPA, which practice is prohibited between settlement service providers?

Accepted Answer

Paying or receiving kickbacks for referrals

Answer

RESPA Section 8 prohibits kickbacks and fee-splitting arrangements between settlement service providers for referrals.

Question 2

The Home Mortgage Disclosure Act (HMDA) requires lenders to collect and report data primarily to:

Accepted Answer

Identify possible discriminatory lending patterns

Answer

HMDA data is used by regulators and the public to identify and address discriminatory or predatory lending practices.

Question 3

Which federal law establishes the right of rescission for certain mortgage transactions?

Accepted Answer

TILA

Answer

The Truth in Lending Act (TILA) grants borrowers a three-business-day right to rescind certain non-purchase mortgage transactions.

Question 4

A lender denies a loan application citing the applicant's receipt of public assistance income as the reason. This most likely violates:

Accepted Answer

ECOA

Answer

ECOA prohibits discrimination based on the fact that income derives from a public assistance program.

Question 5

Under Dodd-Frank, which agency has primary supervisory authority over large non-bank mortgage servicers?

Accepted Answer

CFPB

Answer

The Consumer Financial Protection Bureau (CFPB) has supervisory and enforcement authority over large non-bank mortgage servicers under Dodd-Frank.

Mortgage Practice Test