Mortgage Federal Mortgage-Related Laws 2

Question 1

Under RESPA, within how many business days must a lender provide a Loan Estimate to a borrower after receiving a completed loan application?

Accepted Answer

3 business days

Answer

RESPA (as implemented by TRID) requires lenders to deliver the Loan Estimate within 3 business days of receiving a completed loan application.

Question 2

Which federal law prohibits lenders from paying referral fees or kickbacks to settlement service providers for referring business?

Accepted Answer

RESPA

Answer

RESPA Section 8 specifically prohibits kickbacks and unearned fee arrangements between settlement service providers.

Question 3

The Closing Disclosure required under TRID must be provided to the borrower no later than how many business days before consummation?

Accepted Answer

3 business days

Answer

TRID rules require the Closing Disclosure to be received by the borrower at least 3 business days before loan consummation.

Question 4

RESPA's Section 10 limits the amount a lender can require a borrower to deposit into an escrow account. What is the maximum cushion allowed?

Accepted Answer

Two months' escrow payments

Answer

RESPA Section 10 allows a maximum escrow cushion of two months' worth of escrow payments.

Question 5

Under TILA, what is the right of rescission period for a refinance of a primary residence with a new lender?

Accepted Answer

3 business days

Answer

TILA grants borrowers a 3-business-day right of rescission for non-purchase refinance transactions secured by their primary residence.

Mortgage Practice Test