SAFE TILA and RESPA Regulations 3

Question 1

Under RESPA, what is the maximum cushion a lender may maintain in an escrow account?

Accepted Answer

Two months' escrow payments

Answer

RESPA limits escrow cushions to a maximum of two months' worth of escrow payments to prevent over-collection by servicers.

Question 2

A borrower receives a Closing Disclosure with a higher interest rate than shown on the Loan Estimate. This change triggers a new waiting period if the APR increases by more than:

Accepted Answer

0.25% for fixed-rate loans

Answer

A Closing Disclosure re-disclosure and new three-day waiting period are required if the APR increases by more than 0.25% for fixed-rate loans (or 0.25% for irregular transactions).

Question 3

Which RESPA provision requires lenders to provide borrowers with an Annual Escrow Account Disclosure Statement?

Accepted Answer

Section 10

Answer

RESPA Section 10 governs escrow accounts and requires servicers to provide annual escrow account statements to borrowers.

Question 4

Under TILA, which of the following is included in the Finance Charge calculation?

Accepted Answer

Credit life insurance premium when required by the lender

Answer

If the lender requires credit life insurance as a condition of the loan, its premium must be included in the Finance Charge under TILA.

Question 5

A settlement service provider gives a MLO a referral fee for sending clients their way. Under RESPA, this is:

Accepted Answer

Prohibited regardless of disclosure

Answer

RESPA Section 8 prohibits kickbacks and referral fees for the referral of settlement services regardless of disclosure or state law.

(SAFE) Certified Secure and Fair Enforcement Mortgage Loan Originator Practice Test

(SAFE) Certified Secure and Fair Enforcement Mortgage Loan Originator Practice Test

SAFE TILA and RESPA Regulations 3