Mortgage Loan Originator TILA and RESPA Compliance 2

Question 1

Under TILA, a borrower has a right of rescission for how many business days on a refinance of their primary residence?

Accepted Answer

3 business days

Answer

TILA grants borrowers a three-business-day right to rescind a refinance transaction involving their principal dwelling with a new lender.

Question 2

Which RESPA section requires lenders to provide an annual escrow account statement to borrowers?

Accepted Answer

Section 10

Answer

RESPA Section 10 limits the amount lenders may require in escrow accounts and mandates annual escrow account disclosure statements.

Question 3

Under TILA, the 'finance charge' includes all of the following EXCEPT:

Accepted Answer

Hazard insurance premiums paid to insurer of borrower's choice

Answer

Hazard insurance premiums paid to an insurer chosen by the borrower are excluded from the finance charge under TILA.

Question 4

RESPA's affiliated business arrangement (AfBA) disclosure must be provided:

Accepted Answer

At the time of referral to an affiliated service provider

Answer

When a settlement service provider refers a consumer to an affiliate, RESPA requires the AfBA disclosure to be given at the time of that referral.

Question 5

Which TRID form replaced the HUD-1 Settlement Statement?

Accepted Answer

Closing Disclosure

Answer

The Closing Disclosure replaced the HUD-1 Settlement Statement and the final Truth-in-Lending disclosure under the TRID rule effective October 2015.

Mortgage Loan Originator Practice Test