Mortgage Federal Lending Regulations 4

Question 1

Under Regulation Z, a refinance on a primary residence gives the borrower a right of rescission period of:

Accepted Answer

3 business days

Answer

Borrowers have three business days after closing, delivery of the Notice of Right to Rescind, or delivery of the required disclosures — whichever is latest — to rescind a non-purchase mortgage on their primary home.

Question 2

A mortgage loan originator who takes a loan application and offers or negotiates terms without holding a license is violating which federal law?

Accepted Answer

The SAFE Mortgage Licensing Act

Answer

The SAFE Act requires all MLOs who take applications and negotiate loan terms to be either state-licensed or federally registered.

Question 3

Under the Gramm-Leach-Bliley Act (GLBA), mortgage lenders must provide a privacy notice to consumers:

Accepted Answer

At account opening and annually thereafter

Answer

GLBA requires financial institutions to deliver an initial privacy notice when a customer relationship is established and annually every year the relationship continues.

Question 4

RESPA Section 8 prohibits which of the following practices?

Accepted Answer

Paying or receiving kickbacks for referrals of settlement services

Answer

RESPA Section 8 specifically prohibits giving or accepting anything of value in exchange for referrals of federally related mortgage settlement services.

Question 5

Under the ATR/QM rule, a Qualified Mortgage generally cannot have a debt-to-income ratio exceeding:

Accepted Answer

43%

Answer

Under the original QM rule, a maximum DTI of 43% was the general limit, though GSE-eligible loans had a temporary safe harbor; new price-based QM rules replaced DTI caps in 2021.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Federal Lending Regulations 4