Download Mortgage Lending Quiz: Test Your Knowledge of Consumer Financial Protection and more Cheat Sheet Real Estate Management in PDF only on Docsity!
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1. The CFPB has oversight authority over privacy regulations. All of the following are privacy regulations,
except:
TILA RESPA Integrated Disclosure Reg Z The correct answer Regulation P of the Gramm-Leach-Bliley Act Fair Credit Reporting Act Regulation V Your answer was incorrect Red Flags Rule
The total cost of the transaction must be disclosed to the borrowers at least three days before closing. The Closing Disclosure is thedisclosure that meets this requirement and must state the final terms and costs of obtaining the loan and settling the transaction. No estimates are permitted on the Closing Disclosure.
2. Title X of the Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB). The CFPB
has five main roles. Which of the following roles is NOT a role of the CFPB?
Provides financial service providers information on registration and submission, regulatory guidance, and compliance resources
Your answer was incorrect
financial laws.^ Responsible for protecting consumers by holding financial service providers accountable through enforcement of federal consumer Collects information and publishes research about many areas of the consumer financial marketplace. Provides resources to assist financial service providers in making informed financial decisions. The correct answer
The CFPB provides consumer education resources to assist consumers in making informed financial decisions.
3. The Fair and Accurate Credit Transactions Act (FACTA) protects consumers' identity by limiting the ways
businesses and financial institutions can share consumer information, specifying requirements for information
privacy, accuracy, and disposal. Which part of FACTA requires financial institutions to have a written program
to detect, prevent and mitigate identity theft?
Fair Debt Collection Practices Red Flags Rule Your answer was correct Fair Credit Billing Truth in Lending
The Red Flags Rule is part of FACTA that requires many businesses and financial institutions to implement a written Identity Theft PreventionProgram designed to detect the warning signs of identity theft in their daily operations.
4. Which statement about Ginnie Mae is FALSE?
Ginnie Mae provides liquidity and stability to the housing finance system. Ginnie Mae guarantees payment of principal and interest on non-government insured or guaranteed loans. Your answer was correct Ginnie Mae ensures mortgage lenders have the necessary funds to provide loans to customers. Ginnie Mae is government-owned and managed by HUD.
Ginnie Mae guarantees investors the timely payment of principal and interest on mortgage-backed securities backed by federally insured orguaranteed loans (mainly loans insured by the FHA or guaranteed by the VA).
5. Which federal agency regulates mortgage lending?
The Federal Deposit Insurance Corporation (FDIC) All the choices have a role in regulating mortgage lending The correct answer The Consumer Financial Protection Bureau (CFPB) Your answer was incorrect Office of the Comptroller of the Currency (OCC)
Mortgage lending is one of the most highly regulated industries in the US. All the choices named, and more, have a regulatory role in theindustry.
6. Which of the following is a Government Sponsored Enterprise?
Fannie Mae Your answer was correct The Department of Veterans Affairs The Federal Housing Administration Ginnie Mae
The Department of Veterans Affairs is a federal government agency. The Federal Housing Administration and Ginnie Mae are both parts of theDepartment of Housing and Urban Development and therefore government agencies as well.
7. As property rights and title to property are potentially affected by marital status, it is necessary to know
marital status as a part of taking a mortgage loan application. However, fair lending law prohibit discrimination
based on marital status. Which is the following questions is the acceptable way of inquiring about marital
status?
Are you legally married or divorced? What is your current marital status? Have you been previously married? Are you married, unmarried, or separated? Your answer was correct
Asking the question in this way will provide you with the information you need to determine the applicant's legal ability to convey property rights, but will not indicate any bias or violation of Fair Lending Laws.
11. Which of the entities or individuals described is NOT involved in the primary mortgage market?
The correct answer
A mortgage examiner who takes a random sample of mortgage files and audits them to ensure compliance with federalregulations.
Your answer was incorrect
A mortgage broker that assists the borrower in response to loan decisions and participates in closing, but does not fund or service the mortgage. An online bank with no physical offices who solicits and collects mortgage loan applications through a web-site. An independent mortgage banker using funds borrowed from a warehouse lender to close loans.
A mortgage examiner is fulfilling a regulator role and is not a participant in either the primary or secondary mortgage market.
12. Who oversees institutions that accept deposits from customers?
The Federal Reserve Board The Securities and Exchange Commission The Office of the Comptroller of the Currency The Federal Deposit Insurance Corporation Your answer was correct
The Federal Deposit Insurance Corporation (FDIC) is a government-created corporation that insures funds deposited in U.S. banks and thrift institutions. The FDIC is responsible for managing failed banks, ensuring consumer protections, and evaluating the stability and safety offinancial institutions. The institutions the FDIC oversees are considered [BOLD depository] institutions because they accept deposits from customers.
13. Which Title of the Dodd-Frank Act provides authority to enforce federal consumer laws against
non-depository covered persons, establishes the Consumer Financial Protection Bureau (CFPB), and
provides for improved financial disclosures?
Title XI Title X Your answer was correct Title IX Title XIV
Title X Consumer and Financial Protection Act provides authority to enforce federal consumer laws against non-depository covered persons,establishes the Consumer Financial Protection Bureau (CFPB), provides for improved financial disclosures, and integrates mortgage disclosures under the Truth in Lending Act and the Real Estate Settlement Procedures Act, among other things.
14. Consider borrower Hashir, whose family originates from India, although Hashir was born and raised in the
United States. He decided to buy a home closer to the university where he teaches economics. The loan
officer began asking Hashir questions about his national origin, even though the loan officer had paperwork
that proved Hashir was an American citizen and not an immigrant. What law was the lender most likely
violating?
Title X of the Dodd-Frank Act The SAFE Act Home Owners Protection Act Fair Housing Act Your answer was correct
Race, color, national origin, religion, sex, familial status, and disability are protected under the Fair Housing Act. The lender asking questionsabout Hashir's national origin is prohibited when making lending decisions. Since the lender already knew Hashir was an American citizen, it was not necessary to inquire about his immigration status.
15. The Federal Reserve Act of 1913 created the Federal Reserve System, allowed banks to make real estate
loans, and implemented a system that allowed the U.S. government to influence interest rates. Typically, early
mortgage loans consisted of all of the following except:
A balloon payment Your answer was incorrect A large down payment Renegotiating the loan annually A long-term loan The correct answer
Early mortgage loans were typically short-term, included a large down payment, and borrowers often had a balloon payment. It was notunusual for borrowers to renegotiate their loans every year.
16. Which of the following is not a component of the CFPB's compliance role
Your answer was incorrect
Provide an Amicus program helps make sure consumer financial protection status and regulations are interpreted by thecourts correctly and consistently.
The correct answer
Provide oversight and regulation to the mortgage secondary market to ensure a consistent and highly functional exchange of capitalbetween primary and secondary mortgage market participants.
Provide resources such as guides and videos to help entities understand, implement, and comply with Bureau rules. Provide supervisory resources on matters such as including how their regional offices conduct examinations and assess compliance, supervisory highlights to share key examination findings, and policy guidance, including compliance bulletins andjoint-agency memoranda.
The CFPB does not regulate the secondary market. It oversees transactions between primary market lenders and consumers.
17. Which Title of the Dodd-Frank Act seeks to improve the availability of mortgage credit that is responsible
and affordable by amending the Truth in Lending Act, the Equal Credit Opportunity Act, and other consumer
financial laws to prevent mortgage-related abuses?
Title XIV The correct answer Title XI Title X Title IX Your answer was incorrect
Title XIV Mortgage Reform and Anti-Predatory Lending Act establishes minimum qualifying standards, establishes penalties for irresponsiblelending, and requires documentation and verification of a borrower's ability to pay, among other things.
21. HUD sponsors housing counseling agencies throughout the country to provide advice on buying a home,
renting, foreclosure avoidance, credit issues, and reverse mortgages. When consulting with a borrower, what
is the first step a HUD counselor is required to do?
Assess the client's income, debts, and expenses. Initiate a client action plan. The correct answer Record specific, measurable, and dated client actions. Gather client and counselor data. Your answer was incorrect
When consulting with a borrower, HUD counselors are required to initiate and create a client action plan, which begins with client data, then the initial assessment, and finally, client and counselor initial action steps.
