SAFE Regulatory Compliance & Consumer Protection 2 — Questions and Answers
Question 1: Under RESPA, which of the following is NOT considered a permissible kickback or referral fee exception?
- Payments for services actually performed
- Affiliated business arrangement disclosures
- Marketing services agreements paying for referrals only (Correct answer)
- Fees paid to a bona fide employee
Correct answer: Marketing services agreements paying for referrals only
RESPA prohibits paying for referrals alone; marketing services agreements that compensate solely for referrals are illegal kickbacks.
Question 2: The Equal Credit Opportunity Act (ECOA) requires a lender to provide an adverse action notice within how many days of taking adverse action on a completed credit application?
- 10 days
- 20 days
- 30 days (Correct answer)
- 45 days
Correct answer: 30 days
ECOA requires creditors to notify applicants of adverse action within 30 days of receiving a completed application.
Question 3: Which federal law requires lenders to provide borrowers with an escrow account statement at least once a year?
- Truth in Lending Act (TILA)
- Real Estate Settlement Procedures Act (RESPA) (Correct answer)
- Home Mortgage Disclosure Act (HMDA)
- Gramm-Leach-Bliley Act (GLBA)
Correct answer: Real Estate Settlement Procedures Act (RESPA)
RESPA requires servicers to provide annual escrow account statements detailing deposits, disbursements, and any shortages.
Question 4: A borrower's right to rescind a mortgage transaction under TILA applies to which type of loan?
- A purchase money mortgage on a primary residence
- A refinance on a primary residence with a new lender (Correct answer)
- A vacation home refinance
- A commercial property loan
Correct answer: A refinance on a primary residence with a new lender
TILA's three-day right of rescission applies to refinance transactions on a primary residence when the lender is not the original purchase money lender.
Question 5: Under the Bank Secrecy Act (BSA), mortgage companies must file a Suspicious Activity Report (SAR) within how many days of detecting suspicious activity?
- 15 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
Mortgage companies must file a SAR within 30 calendar days of the initial detection of facts that may constitute a basis for filing.
Question 6: Which disclosure under TILA/RESPA Integrated Disclosure (TRID) rules must be provided within three business days of receiving a mortgage loan application?
- Closing Disclosure
- Loan Estimate (Correct answer)
- HUD-1 Settlement Statement
- Truth-in-Lending Statement
Correct answer: Loan Estimate
Under TRID, the Loan Estimate must be delivered or placed in the mail within three business days of receiving a completed application.
Question 7: The Fair Housing Act prohibits discrimination in residential real estate transactions based on all of the following EXCEPT:
- Religion
- National origin
- Income level (Correct answer)
- Familial status
Correct answer: Income level
Income level is not a protected class under the Fair Housing Act, which covers race, color, religion, sex, national origin, disability, and familial status.
SAFE Regulatory Compliance & Consumer Protection 2
Under RESPA, which of the following is NOT considered a permissible kickback or referral fee exception?