NMLS Exam Prep: Federal Mortgage Laws and Regulations Quiz

The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination based on certain personal characteristics or conditions. The correct answer includes the protected categories under ECOA.

It is important to count the income of a pregnant woman even if she plans to return to work after maternity leave, as it is a part of her overall financial situation.

In a mortgage loan transfer, it is essential for both the transferor and transferee to notify the borrower 15 days prior to the date of transfer. This ensures that the borrower is informed of the change in ownership or servicing of the loan.

A Loan Estimate includes various components related to the terms and costs of the loan, along with projections, comparisons, and other considerations. It does not include personal financial details or property-specific information.

The correct components of a loan application consist of specific sections related to borrower information, financial details, property information, declarations, acknowledgments, military service, demographic data, and loan originator information. The incorrect answers provided do not align with the standard components of a loan application form.

The Closing Disclosure components include specific details related to the loan, payments, costs at closing, cash to close calculation, transaction summaries, disclosures, and contact information. Escrow terms, insurance details, and pre-approval process are not typically part of the Closing Disclosure.

Kickbacks are prohibited in transactions covered by RESPA to prevent illegal or unethical practices in real estate transactions. Giving or receiving kickbacks can result in severe penalties.

According to ECOA regulations, an Appraisal report must be given to the borrower at least 3 business days prior to closing to ensure transparency and allow for any necessary adjustments.

The correct sources of income under ECOA include public assistance income, part time employment, social security, pensions, annuities, alimony, child support, and separate maintenance. Unemployment benefits, investment income, and lottery winnings are not typically among the acceptable sources of income according to ECOA guidelines.

An Adverse Action Notice should include specific information such as the name and address of the lender, the name and address of the Federal Agency that administers compliance for the lender, a description of the action taken (e.g. denial), and a specific reason for the denial.

The correct answer specifies the thresholds for APR changes that require re-disclosure for both fixed and adjustable rate transactions. The incorrect answers provide variations in percentages, but the correct thresholds are .125% for fixed rate and .250% for adjustable rate transactions.

APR Tolerance for re-disclosure is dependent on whether the transaction is regular or irregular, with the tolerance being .125% (1/8 of 1%) for regular transactions and .25% (1/4 of 1%) for irregular transactions.

Discrimination based on the receipt of public income is prohibited by law to ensure equal treatment for all individuals, regardless of their sources of income.

Appraisers are professionals who are entitled to earn a fee for their services as they provide an unbiased valuation of a property.

The correct answer is 10% cumulative tolerance, meaning any increase beyond 10% on Section C Fees + Government Recording fees on a loan estimate would not be allowed.

The APR includes fees directly related to the loan application and approval process, not other types of fees like late payment fees or property taxes.

The correct answer includes costs like Origination Charges, Services the borrower cannot shop for, and Transfer Taxes which have no tolerance limits per TRID regulations.

USDA, VA, and FHA loans are assumable with lender's approval, meaning that the new borrower can take over the existing loan with the same terms and conditions. Conventional, Jumbo, and Home Equity loans typically do not have this feature.

RESPA (Real Estate Settlement Procedures Act) mandates escrow limits to be 2 months plus $50 for tax and insurance payments. This ensures that lenders do not require excessively high escrow amounts from borrowers.

FICO Scores typically range from 300 to 850, with different ranges for conforming and non conforming scores depending on the lending criteria.

Finance fees typically include charges directly associated with the loan financing process, such as interest, points, and mortgage insurance. The incorrect answers provided include fees that are commonly associated with financing or obtaining a mortgage.

The correct answer is 10 business days from when the Loan Estimate is provided. This timeframe allows consumers to review and compare loan offers before making a decision.

The correct answer is 7 Business Days because it allows sufficient time for the borrower to review the loan terms and make an informed decision before the loan closes.

The Community Reinvestment Act requires banks to provide loans in communities where they collect deposits to help ensure fair access to credit for all individuals, regardless of their location or socioeconomic status.

In the Loan Estimate (LE), Lender's Admin costs are typically covered under Section A as Origination fees. While other fees mentioned in Sections B, C, and D may also be associated with the loan process, they are not specifically designated for Lender's Admin costs.

GFE refers to Good Faith estimate, commonly used in relation to HELOCs and Reverse Mortgages.

A Chapter 7 bankruptcy typically remains on a credit report for 10 years, impacting the individual's credit history and ability to obtain credit during that time period.