Flashcards
60 free cards across the five exam sections, each one cited to the source it rests on. Reveal the back on any card. A free account keeps your place.
Twenty five months from the date the creditor notifies the applicant of action taken or of incompleteness, because Regulation B sets that retention period for consumer credit applications.
Thirty days after receiving the completed application, because Regulation B requires notice of the approval, the counteroffer or the adverse action within that period.
Not less than 15 days before the effective date of the transfer, so the borrower learns where to send payments before the new servicer takes over the loan. Where the transfer follows termination for cause, bankruptcy or receivership of the servicer, the notice may come up to 30 days after the transfer.
Not later than the third business day after the creditor receives the consumer's application, so the clock runs from receipt of the application and not from any later underwriting step.
No later than three business days before consummation, because the rule sets a receipt deadline and not a mailing deadline. A transaction secured by a timeshare interest is excepted and needs receipt only by consummation.
Until midnight of the third business day after the last of consummation, delivery of the rescission notice, or delivery of all material disclosures, because the clock only starts once all three have happened.
More than 6.5 percentage points above the average prime offer rate for a comparable transaction, because that spread is the first-lien rate trigger. The trigger is 8.5 points where the dwelling is personal property and the loan amount is less than $50,000.
An annual percentage rate 1.5 or more percentage points above the average prime offer rate for a comparable transaction as of the date the rate is set, because that is the spread the definition requires.
No, because compensation to a loan originator may not be based on a term of the transaction, and the interest rate is such a term.
Thirty calendar days from initial detection, extended to no more than 60 calendar days where no suspect has been identified, because the rule allows one further 30 days to identify a suspect.
A fine of not more than $10,000 or imprisonment for not more than one year, or both, because the statute makes a section 8 violation a criminal offense and not only a civil one.
The date the principal balance is first scheduled to reach 78 percent of the original property value, because the statute reads that date off the initial amortization schedule and ignores the balance actually outstanding.
Taking a residential mortgage loan application and offering or negotiating terms of a residential mortgage loan for compensation or gain, because the definition requires both limbs rather than either one alone.
Any mortgage product other than a 30-year fixed rate mortgage, because the statute defines the term by exclusion rather than by any feature of the product itself.
Either a registration as a registered loan originator or a license and registration as a state-licensed one, obtained and maintained annually, plus a unique identifier. The statute requires both before an individual may engage in the business of a loan originator.
Any felony in the 7-year period before the application, and a felony involving fraud, dishonesty, breach of trust or money laundering at any time before that date, so an old fraud felony still disqualifies.
At least 20 hours, which must include at least 3 hours of federal law and regulations, 3 hours of ethics, and 2 hours on lending standards for the nontraditional mortgage product marketplace.
A score of not less than 75 percent correct answers, because the statute states the pass standard as a proportion of the questions, so anything below that line fails.
Federal law allows 3 consecutive retakes, and each one must occur at least 30 days after the preceding test, so the wait runs from the date of that test.
At least 6 months, because the statute requires an individual who has failed 3 consecutive tests to wait that long before taking the test again.
A gap of 5 years or longer, since the statute requires a retake after a lapse that long and excludes any period the individual spent as a registered loan originator.
At least 8 hours a year, which must include at least 3 hours of federal law and regulations, 2 hours of ethics, and 2 hours on lending standards for the nontraditional mortgage product marketplace.
$25,000 for each act or omission, so a course of conduct made of several violations can carry several penalties. The 2010 Dodd-Frank amendment moved the power to the Bureau of Consumer Financial Protection and left the figure unchanged.
120 days after the individual submits the application, because the period runs to the earliest of that date, a withdrawal, a denial or notice of intent to deny, or the grant of a state license. Temporary authority covers only applications made since the 2018 federal amendment took effect.
A monthly sum equal to one twelfth of the total annual escrow payments the servicer reasonably anticipates paying from the account, plus a cushion no greater than one sixth of the estimated total annual payments, because the section caps what a borrower can be required to deposit.
A residential structure of one to four units, attached to real property or not, because the definition also covers a condominium unit, a cooperative unit, a mobile home and a trailer used as a residence.
It is a closed-end consumer credit transaction secured by the consumer's principal dwelling on which the annual percentage rate (APR) may increase after consummation. The notices themselves do not apply to an ARM with a term of one year or less.
At least 60 and no more than 120 days before the first payment at the adjusted level is due, so the borrower sees the new rate and payment before the money is owed. The floor drops to 25 days for an ARM with uniformly scheduled rate adjustments every 60 days or more frequently, and for an ARM originated before January 10, 2015 whose loan contract computes the adjusted rate and payment from an index figure available less than 45 days before the adjustment date.
At least 210 and no more than 240 days before the first payment at the adjusted level is due, unless that payment falls within the first 210 days after consummation, when the disclosures are given at consummation.
The maximum interest rate that may be imposed during the term of the obligation, because the rule requires a stated ceiling whenever the annual percentage rate (APR) may increase after consummation on closed-end credit or during the plan on open-end credit.
At least one borrower must occupy within 60 days of signing the security instrument and intend to continue occupancy for at least one year, under the handbook's August 14, 2019 revision. A 203(k) rehabilitation product may set a different length of time to occupy.
FHA Handbook 4000.1, p. 161 Reference document, not law.
A score at or above 580, in the handbook's August 14, 2019 revision, because a borrower scoring between 500 and 579 is limited instead to a maximum loan to value (LTV) of 90 percent.
FHA Handbook 4000.1, p. 179 Reference document, not law.
On the first day of the first month beginning after the borrower becomes current on the payments, so the automatic termination is delayed by arrears rather than lost.
Cover for the term of the loan in an amount at least equal to the outstanding principal balance or the maximum limit available under the Act, whichever is less, since the loan may not otherwise be made, increased, extended or renewed.
The proposed monthly housing expense must not exceed 29 percent of repayment income, the principal, interest, taxes and insurance (PITI) ratio the handbook sets in its May 2025 revision.
USDA Handbook HB-1-3555, p. 188 Reference document, not law.
Only where the purchase price exceeds the reasonable value of the property, and then for the difference in cash from the borrower's own resources, or where the loan is a graduated payment mortgage (GPM).
VA Lenders Handbook 26-7, p. 98 Reference document, not law.
At settlement or within 45 calendar days of settlement, because the servicer must run an escrow account analysis first on any account required as a condition of the loan.
Not later than the seventh business day before consummation, which is an outside deadline on top of the one that runs from receipt of the application. It does not apply to a transaction secured by a consumer's interest in a timeshare plan.
Only after the consumer has received the Loan Estimate (LE) and told the creditor of an intent to proceed, because the bar reaches the creditor and any other person alike.
Charges for third-party services and recording fees, because the 10 percent test is applied to the aggregate of those charges. The creditor must also have permitted the consumer to shop for the third-party service, and that charge must not be paid to the creditor or an affiliate.
No later than four business days before consummation, because a revised LE may not be issued on or after the day the creditor provides the Closing Disclosure (CD).
An inaccurate annual percentage rate (APR), a change of loan product, and the addition of a prepayment penalty, because only those three require corrected disclosures on the original timing.
The consumer's name, income and social security number, the property address, an estimate of the property value and the loan amount sought, because the disclosure clock only starts once all six have been submitted.
All calendar days except Sundays and the named federal legal public holidays, because that precise count replaces the general business day definition wherever those timing rules apply.
Two copies each, or one copy each where the notice is delivered in electronic form, since the notice must be on a separate document that identifies the transaction.
Within 20 calendar days of receiving the notice the creditor must return any money or property given in connection with the transaction and act to terminate the security interest.
No, because a residential mortgage transaction is the first of the transactions expressly listed as ones the right to rescind does not apply to.
It is the ratio of the consumer's total monthly debt obligations to the consumer's total monthly income, because that is the figure the creditor must consider where it uses DTI rather than residual income.
No. That paragraph allows only three uses: weighing either for a pertinent element of creditworthiness in a judgmental system, using age as a predictive variable in a credit scoring system with no negative value for an elderly applicant, and using age to favor an elderly applicant.
Any material misrepresentation about a term of a mortgage credit product in a commercial communication, because the rule catches an implied claim as squarely as a stated one.
Only after the homeowner has signed a written agreement with the loan holder or servicer setting out the relief the provider obtained, so nothing may be charged up front.
Not within one year of extending the first one, unless the refinancing is in the consumer's interest, and an assignee holding or servicing the loan is bound for the rest of that same year.
No, because the rule bars a creditor or mortgage broker from recommending or encouraging default on an existing loan or debt that the high-cost mortgage will refinance.
Directing the consumer into a transaction because the creditor pays the originator more there than on the other transactions offered, unless that consummated transaction is in the consumer's interest.
They must come from a significant number of the creditors the originator regularly does business with, and options must be presented for each type of transaction the consumer expressed an interest in.
A felony in a domestic or military court in the preceding seven years, and one involving fraud, dishonesty, a breach of trust or money laundering at any time. Expunged and pardoned convictions do not disqualify, so neither bar reaches them.
Causing the value assigned to that dwelling to rest on any factor other than the independent judgment of the person preparing valuations, because the rule reaches an attempt as much as an act and names coercion, extortion, inducement, bribery, intimidation, compensation, instruction and collusion as the routes.
Refer the matter to the appropriate state agency, because the rule requires a referral wherever the failure to comply is material.
Indicating any preference, limitation or discrimination on a protected basis, because an indicated intention to discriminate breaks the rule even where nobody acts on it.
Obtaining another person's customer information by a false statement to an officer, employee or agent of the institution or to a customer of it, or by producing a document known to be forged, counterfeit, lost, stolen or false, because the attempt alone is a violation.
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