Mortgage Federal Laws and Regulations 4

Question 1

Under the Ability-to-Repay (ATR) rule, a lender must verify a borrower's income using:

Accepted Answer

Reasonably reliable third-party records

Answer

Only the borrower's stated income

Answer

The automated underwriting system output alone

Answer

The borrower's credit score only

Question 2

The Servicemembers Civil Relief Act (SCRA) limits mortgage interest rates for active-duty servicemembers to a maximum of:

Accepted Answer

6%

Answer

3%

Answer

4%

Answer

8%

Question 3

A lender requires a borrower to use a specific title company owned by the lender's affiliate. Under RESPA, this is permissible only if:

Accepted Answer

An affiliated business arrangement (AfBA) disclosure is provided and use is not required

Answer

The title company provides a discount

Answer

The loan is a jumbo loan

Answer

The borrower signs a written waiver

Question 4

Under TILA, the Annual Percentage Rate (APR) differs from the interest rate because it includes:

Accepted Answer

Certain fees and costs of credit

Answer

Homeowner's insurance premiums

Answer

Property tax escrow amounts

Answer

Principal reduction payments

Question 5

Which act prohibits lenders from discriminating based on a neighborhood's racial composition, a practice known as redlining?

Accepted Answer

Fair Housing Act

Answer

RESPA

Answer

TILA

Answer

FIRREA

Question 6

FIRREA was enacted primarily in response to:

Accepted Answer

The savings and loan crisis of the 1980s

Answer

The 2008 mortgage crisis

Answer

Predatory subprime lending in the 1990s

Answer

The Great Depression bank failures

Question 7

Under HMDA, which institution is generally required to report mortgage data?

Accepted Answer

Covered financial institutions meeting asset and location thresholds

Answer

Any business that accepts deposits

Answer

Only federally chartered banks

Answer

All real estate brokerages nationwide