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Consumer protection statute that was first enacted in 1974. The CFPB Reg X, implements
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WHat does RESPA do?
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MLO - CHAPTER 4
TILA-RESPA Integrated Disclosures
| Question | Answer |
|---|---|
| Consumer protection statute that was first enacted in 1974. The CFPB Reg X, implements | The Real Estate Settlement Procedures Act (RESPA) |
| WHat does RESPA do? | ensures that consumers throughout the nation are provided with helpful info about the cost of mortgage settlement process and protection from unnecessarily high settlement charges |
| What directed the CFPB to integrate the mortgage loan disclosures under TILA and sections 4 and 5 of RESPA | Dodd Frank Wall Street Reform and Consumer Act |
| The amendments in the CFPB's final rule referred to as ________________ are applicable to covered, closed end mortgage loans for which a creditor receives an application | "TILA-RESPA Disclosure Rule" or TRID |
| The TRID rule mandates the use of two disclosures: | - Initial Truth-in-Lending disclosure and the RESPA Good Faith Disclosure combined into the new Loan Estimate (LE) -Final Truth-in-Lending disclosure and the HUD-1 combined into new Closing Disclosure (CD) |
| TILA-RESPA Rule does NOT apply to | - HELOCs -reverse mortgages -mortgages secured by mobile home or not real property - fewer that 5 a year no interest loans |
| Loans subject to TILA but not RESPA are subject to TILA-RESPA rule's integrated disclosure requirements | Construction only (do get an LE now) loans by vacant land or more than 25 acres |
| The Loan Estimate form must be provided by either the broker or creditor up | receipt of application |
| An application is defined as the submission of 6 pieces of information: | 1. name 2. income 3. address 4. loan amount 5.estimate of value 6. social security number |
| What kind of days are used for timing requirements of TRID? | business days -- general and rescission |
| The Loan Estimate must be delivered or placed in the mail to the consumer no later than the _________________ after the creditor receives the consumer's application for a loan | third business day (general definition) |
| Other than for transactions secured by a consumer’s interest in a timeshare plan, the Loan Estimate must be delivered or placed in the mail no later ____________ before consummation. | than the seventh business day (rescission definition) |
| If the applicant withdraws their loan application, the creditor does NOT have to provide the __________ | loan estimate |
| if the applicant resubmits the loan application then the creditor must comply with the rules and send a LE within | 3 business days of resubmission |
| What is considered a bonafide personal financial emergency? | foreclosure |
| The creditor may not impose any of these fees on a consumer in connection with a loan application before they agree to proceed: | - application fee - appraisal fee -underwriting fee - other fees imposed on consumer |
| Intent to proceed can include: | oral communication after LE or signing pre printed form anything other than silence |
| Zero Tolerance charges are: | - fees paid to creditor, broker, or affiliate - fees paid to an unaffiliated third-party if the creditor did not permit the consumer to shop for the service -transfer taxes |
| in addition to the LE, the creditor must provide within 3 business days ______________-- | a written list of services for which the consumer can shop |
| the consumer shopping list must: | - identify at least one available settlement service provider for each service - state the consumer may choose a diff provider of that service |
| if the consumer chooses a third party service on that list __________________- | the charge is not subject to a tolerance limitation |
| Charges for third-party services and recording fees paid by or imposed on the consumer are grouped together and subject to a ____ cumulative tolerance | 10% |
| For certain costs or terms, creditors are permitted to charge consumers more than the amount disclosed on the Loan Estimate without any tolerance limitations. These charges are | - prepaid interest -a service not on the list - charges paid to third party services not required |
| What are the events TRID sets that justify a revised Loan Estimate? | - increased settlement charges - consumer eligibility - revisions requested by consumer - rate locks after initial loan estimate - expiration of LE - construct loan |
| Changed circumstances that occur after the Loan Estimate is provided to the consumer cause an estimated charge to increase more than is permitted under the TILA-RESPA | increased settlement charges |
| examples of increased settlement charges: | - natural disaster - estimate of title is no longer value bc they go out of business - new info not relied on when LE was provided is discovered |
| changed circumstances that occur after the LOE is provided to the consumer that affect the consumer's eligibility for the terms for which the consumer applied or the value of the security for the loan | consumer eligibility |
| example of consumer eligibility | -creditor relied on consumers representation to the creditor of a $90,000 annual income, but UW determines that their income is only $80,000 - 2 people applied but now one is unemployed |
| consumer grants a power of attorney authorizing a family member to consummate the transaction on the consumer’s behalf, and the creditor provides revised disclosures reflecting the fee to record the power of attorney -- is an example of what? | revisions requested by the consumer |
| If the consumer indicates an intent to proceed with the transaction more than 10 business days after the Loan Estimate was delivered or placed in the mail to the consumer, a creditor may use a revised Loan Estimate. | Expiration of Loan Estimate |
| Because the CB must be received by the consumer no later than _______ before consummation, this means the consumer must receive a revised Loan Estimate no later than four ___________ prior to consummation. | three business days (rescission definition) four business days (rescission definition) |
| Intent to transfer servicing of the loan includes: | - intent to transfer immediately after consummation -intent to transfer anytime throughout life of loan - intent to transfer to a subsidiary or affiliate |
| For loans that require a Loan Estimate and that proceed to closing, creditors must provide a final disclosure reflecting the actual terms of the transaction; it is called the | Closing Disclosure |
| The Closing Disclosure integrates and replaces the | HUD-1 and final TIL |
| Closing Disclosure generally must contain ______ and ________ | the actual terms and cost of the transaction |
| Who is responsible for the CD? | the creditor |
| When must the consumer receive the CD? | no later than 3 business days (rescission def) before consummation |
| 3 Changes that occur before consummation that require a new three-business-day waiting period | 1. Disclosed APR becomes inaccurate 2. Loan Product Changes 3.A prepayment penalty is added |
| For changes that occur in the 30-day period after consummation, a new disclosure must be delivered no later than ______ days | 30 calendar |
| Creditors must provide a revised Closing Disclosure to correct non-numerical clerical errors and document refunds for tolerance violations no later than _______ days after consummation | 60 calendar |
| Was designed to help consumers understand the nature and cost of real estate settlement services | Special Information Booklet (Your Home Loan Tool Kit) |
| Creditors must provide a copy of the _____________ to consumers who apply for a consumer credit transaction secured by real property. | special information booklet pursuant to Section 5 |
| When do you not have to give consumers a special information booklet? | when refinancing or on second mortgage ? |
| must be provided prior to canceling an escrow account to any consumers for whom an escrow account was established in connection with a closed-end consumer credit transaction, except for reverse mortgages | Escrow Closing Notice |
| The _______ disclosure is required for a closed-end consumer credit transaction secured by a dwelling or real property, other than a reverse mortgage | post-consummation partial payment |
| TRID Record Retention Requirements Closing Disclosure Forms | 5 years after consummation |
| TRID Record Retention Requirements Loan Estimate Forms | 3 years after consummation |
| TRID Record Retention Requirements Escrow Cancellation Notice | 2 years from notice |
| TRID Record Retention Requirements Partial Payment Policy | 2 years from notice |
| The TILA-RESPA rule applies to most closed-end consumer credit transactions secured by real property but does not apply to ______. | Reverse Mortgages |
| The TRID rule requires that the consumer receive the ______ no later than three business days before consummation. | Closing Disclosure |
| A creditor may not impose any fee on a consumer in connection with the consumer’s application for a mortgage transaction until the consumer has received the Loan Estimate and has indicated ______ with the transaction. | Intent to Proceed |
| The creditor may not provide a revised _______ on or after the date that the creditor provides the consumer with the Closing Disclosure. | Loan Estimate |
| The Loan Estimate must be delivered or placed in the mail no later than the seventh business day before ______. | Consummation |
| The Loan Estimate must be delivered or placed in the mail to the consumer no later than the third business day after the creditor or mortgage broker receives the consumer’s ______ for a mortgage loan | application |
| The _____ is responsible for ensuring that the consumer receives the Closing Disclosure form no later than three business days before consummation. | creditor |
| Creditors must provide a copy of the _______ to consumers who apply for a consumer credit transaction secured by real property. | Special Information Booklet |
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