Mortgage Federal Lending Regulations 3

Question 1

Under TILA, the Annual Percentage Rate (APR) must be disclosed to within how many basis points for a regular mortgage transaction?

Accepted Answer

1/8 of 1% (12.5 bps)

Answer

For regular mortgage transactions, TILA requires the APR to be accurate within 1/8 of 1 percentage point (0.125%).

Question 2

Which regulation implements the Real Estate Settlement Procedures Act (RESPA)?

Accepted Answer

Regulation X

Answer

Regulation X is the Federal Reserve/CFPB regulation that implements RESPA, governing settlement services and disclosures.

Question 3

A lender requires a borrower to use a specific title company affiliated with the lender without disclosing the relationship. This most likely violates:

Accepted Answer

RESPA's affiliated business arrangement disclosure requirements

Answer

RESPA requires lenders to disclose affiliated business arrangements and prohibits mandatory use of affiliated settlement service providers.

Question 4

Under the SAFE Act, a state-licensed mortgage loan originator must pass a national test with a minimum score of:

Accepted Answer

75%

Answer

The SAFE Act requires MLOs to pass the NMLS national test with a minimum score of 75% to obtain licensure.

Question 5

HOEPA (Home Ownership and Equity Protection Act) applies to which type of mortgage loans?

Accepted Answer

High-cost home loans exceeding APR and points/fees thresholds

Answer

HOEPA triggers when a loan's APR or points and fees exceed specific thresholds, classifying it as a high-cost mortgage with additional consumer protections.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Federal Lending Regulations 3