MLO Ethics Practice Q's
Which is not a triggering term according to TILA, requiring additional disclosing in advertising? "360 easy payments" "$3,000 down" "Pay only $800 per month" "100% VA financing available"
"100% VA financing available - Generic statements that do not state specific loan information are exempt from additional disclosing of referencing specific information concerning loan terms.
Under Regulation Z, which advertisement would require full disclosure of credit terms? "Affordable rates available" "Assume loan at 8% interest" "VA financing" "Low down payment"
"Assume loan at 8% interest" - Regulation Z requires that once you state any type of credit terms in advertising, such as 8% interest, you must disclose all finance charges and total annual percentage rate (APR).
In a real estate ad for mortgage financing, which statement is permissible if no other information is given? "Interest rate only 9%!" "Monthly payment only $400!" "Liberal terms available to qualified buyer." "Two thousand dollars down."
"Liberal terms available to qualified buyer." - The Truth in Lending Act requires that advertising with certain triggers about the loan terms include more complete information about the loan. A generic statement would not trigger the need for additional disclosure.
Mortgage broker Kelly was accused of paying a kickback to a title company and to the real estate agent who referred her. According to RESPA, what is the maximum criminal penalty that can be imposed? $24,000 $10,000 $20,000 $30,000
$20k - The fine per kickback can be as much as $10,000 per incident, which means that Kelly could be facing a fine of up to $20,000 ($10,000 for each of the two violations).
Which would not be considered a RESPA violation? A lender gives you a travel mug with their logo on it. An MLO pay for all the advertising for a real estate agent to keep for referrals. A title company rents a desk to close your loans at $150 per closing. Your primary lender takes you on a weekend golf trip, all expenses paid, if you close 10 loans in a month with them.
A lender gives you a travel mug with their logo on it. - A thing of minimal value used in the course of sales such as pens, mementos, coffee cups hats, etc. is permissible, but the other three arrangements could be considered violations of RESPA. To violate RESPA, the thing of value does not have to be money.
Mortgage broker Dave knew that his customer worked at a factory that was two weeks away from closing, but in his eagerness to close the deal, he decided to ignore that fact. This might be considered an example of: constructive fraud. actual fraud. good business. negligent misrepresentation.
Actual Fraud - If Dave made the decision to ignore a critical fact that he had prior knowledge of, he could be accused of actual fraud due to the fact that he knew.
Under the Fair Housing Act, which activity is NOT deemed illegal? blockbusting redlining steering adverse action
Adverse Action - Adverse action, such as denying a loan, is not illegal if the borrower is not credit-worthy. Blockbusting, redlining, and steering are always illegal in every circumstance.
George, a mortgage broker, devised fictional borrowers to obtain loans on non-existent properties, and then set up custodial accounts for escrow payments to create the appearance of a legitimate business. George is committing a mortgage fraud scam known as identity theft. flipping. an air loan. a silent second.
An air loan - Air loans scams involve loansloan on properties that do not actually exist. Often, a broker creates fictional borrowers and properties, opens accounts for payments, and maintains custodial accounts for escrow payments.
Which participant in the loan process would be most likely to overvalue a property? loan originator title company employee attorney appraiser
Appraiser - An appraiser who has been tasked with giving an opinion of a property's value could inflate that value as part of a mortgage fraud scheme.
ECOA requires a mortgage loan originator to inquire about a customer's marital status in a specific way. Which is the correct way to ask? Are you married or single? What is your marital status? Are you single, married or widowed? Are you married, unmarried, or separated?
Are you marries, unmarried, or separated?
Inducing owners to sell homes by suggesting the neighborhood's ethnic or racial composition is changing, with the implication that property values will decline, is flipping. counseling. blockbusting. redlining.
Blockbusting - Blockbusting, also known as panic selling, is prohibited under the federal Fair Housing Act.
When an appraiser "gives a mortgage loan originator what's needed" on the appraisal report, the consumer usually ends up: refinancing the property. not being able to sell the property. borrowing too much on the property. paying more discount points at closing.
Borrowing too much on the property - The cooperation between the appraiser and the loan originator in "giving what's needed" on the appraisal report leads to the consumer borrowing too much, - meaning, one where the amount owed on the property exceeds the property's value.
What word best describes a group of participants working together to commit single acts of mortgage fraud? discernment collusion omission representation
Collusion - Collusion is when a group of participants for example, appraisers, title companies, real estate agents, mortgage brokers or lenders, or even lawyers all work together to commit single acts of fraud.
ABC Bank charges unreasonable prepayment penalties to: -discourage consumers with poor credit from applying for a mortgage loan. -discourage payoff of highly profitable loans. -ensure that borrowers pay off their loans early. -penalize borrowers who make payments prior to the monthly due date.
Discourage payoff of highly profitable loans - Unreasonable prepayment penalties may lock borrowers into abusive loans that cannot be easily refinanced when their credit scores improve. Prepayment penalties may be thousands of dollars and require payment as long as five years into the loan; therefore, lenders discourage payoff of the highly profitable loan.
Which of these federal regulations specifically prohibits discrimination in lending? ECOA HOEPA FCRA RESPA
ECOA - The Equal Credit Opportunity Act (ECOA) is a federal law that ensures that all consumers are given an equal chance to obtain credit.
Which of these federal regulations specifically prohibits discrimination in lending? HOEPA FCRA ECOA RESPA
ECOA - The Equal Credit Opportunity Act (ECOA) is a federal law that ensures that all consumers are given an equal chance to obtain credit.
MLO Sarah knows that the primary source of income for the customer sitting across from her is public assistance, so she tells him to not waste his time applying. Sarah has violated what law? TILA ECOA HMDA CRA
ECOA - Under the Equal Credit Opportunity Act, a borrower whose source of income if public assistance is entitled to undergo the same loan process as anyone else.
Who investigates mortgage fraud in the United States? Mortgage Bankers Association FBI local officials HUD
FBI - The FBI investigates matters relating to fraud, theft, and embezzlement occurring within or against the national or international financial community.
What law prohibits discrimination in the sale and rental of a residential property on the basis of race, color, religion, handicap, sex, familial status or national origin? Equal Credit Opportunity Act Community Reinvestment Act Fair Housing Act Home Owners Equity Protection Act
Fair Housing Act - The Fair Housing Act prohibits discrimination against renting and selling property.
What federal legislation requires that all printed advertising include the Equal Housing Opportunity logo? Truth in Lending Act Fair Credit Reporting Act Fair Housing Act Equal Credit Opportunity Act
Fair Housing Act - The Fair Housing Act requires that the Equal Housing Opportunity logo be displayed in all printed material and the term "equal housing lender" must be used when broadcast over the airwaves.
What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves? Equal Credit Opportunity Act Truth in Lending Act Fair Housing Act Fair Credit Reporting Act
Fair Housing Act - The Fair Housing Act requires the use of the phrase "equal housing lender" in all broadcast advertising and the use of the Equal Housing Opportunity logo in all print ads.
What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves? Fair Housing Act Fair Credit Reporting Act Truth in Lending Act Equal Credit Opportunity Act
Fair Housing Act - The Fair Housing Act requires the use of the phrase "equal housing lender" in all broadcast advertising and the use of the Equal Housing Opportunity logo in all print ads.
What does Fannie Mae call the process of purchasing existing properties with the intention of immediately reselling the property for a profit? flipping refinancing straw buying assuming a mortgage
Flipping - Fannie Mae considers this activity flipping. This can be legal or illegal depending on how it is done.
Misrepresentation or concealment of material facts due to negligence is: collusion. steering. flipping. fraud.
Fraud - Fraud is intentional or negligent misrepresentation or concealment of material facts. Fraud also includes actively concealing information and making false or misleading statements.
William changes his W-2 in an effort to win approval for his loan application to buy a new condo. What is this considered? fraud for profit and property fraud for principle fraud for a friend fraud for profit
Fraud for profit and property - When a borrower commits fraud in an effort to obtain ownership of a property, this is considered fraud for property. This could also be considered profit and property if equity is gained.
What federal legislation specifically addresses the sharing of non-public information between financial institutions? Equal Credit Opportunity Act Truth in Lending Act Gramm-Leach-Bliley Act Fair Credit Reporting Act
Gramm-Leach-Bliley Act - The Gramm-Leach-Bliley Act sets specific guidelines for the sharing of confidential non-public information between financial institutions.
Who usually commits mortgage fraud? industry insiders consumer borrowing money government officials investors
Industry Insiders - The increased reliance by financial institutions and others on third-party mortgage brokers has resulted in mortgage fraud at a high level, especially fraud committed by company insiders.
The most common fraudulent action on the part of the appraiser is: stealing appraiser identities. under-valuing properties. inflating value. falsifying MLS data.
Inflating value - Inflating the value of the property is the most common fraudulent action on the part of the appraiser. The appraiser gives the MLO "what is needed" on the appraisal, without regard to the property's actual market value.
What does not fall under the jurisdiction of Title VIII of the Civil Rights Act? purchase of existing housing new construction installment loan for a vehicle rental housing
Installment loan for a vehicle - The Fair Housing Act, Title VIII of the Civil Rights Act, governs all forms of housing, but not any type of personal property.
The difference between actual fraud and constructive fraud is that actual fraud: requires the commission of a crime. is prohibited. is intentional. involves negligence.
Is intentional - Constructive fraud is generally due to negligence, while actual fraud requires an intent to misrepresent or conceal material facts which are known. Both are prohibited.
According to the Interagency Guidance on Nontraditional Mortgage Products inducing influencing a borrower to repeatedly refinance a loan in order to charge points and fees, although a net tangible benefit could have been achieved in a single transaction, is an example of predatory lending. This practice is commonly known as loan flipping. redlining. blockbusting. steering.
Loan flipping
What type of scam entails homeowners who are encouraged to refinance their property over and over until little or no equity remains? reverse equity loan flipping extreme lending property skimming
Loan flipping - In a loan flipping scam a type of equity skimming homeowners are encouraged to keep refinancing their property. Each time they refinance, they are charged points and closing costs, along with other fees. And each time, the equity gets smaller.
Ted, a mortgage broker, convinced Alice to refinance her home again, promising her a lower interest rate. Afterwards, Alice realized no benefit. In fact, her interest rate went up. This lending practice is known as property flipping. loan flipping. home flipping. equity flipping.
Loan flipping - Loan flipping involves refinancing over and over again, usually with no benefit to the borrower in terms of lowering the interest rate or saving fees. The borrower is promised benefits that never materialize. Since the lender profits every time a loan is made, there is no incentive for the lender to recommend otherwise. Often, the refinancing actually raises the interest rate to the borrower.
A perpetrator sends an official-looking letter to a borrower saying that the borrower's loan has been sold and the unsuspecting borrower then sends the mortgage payment to the address indicated on the letter and the thief makes off with the money. Which fraud scam is this? deed scam disappearing second air loan mail fraud
Mail fraud - The property will eventually go to foreclosure because the loan payments are never actually applied to the mortgage loan. Since the perpetrator used the mail, it is considered mail fraud. None of the other fraud schemes fit.
During a telephone application, David states he has 10% down to work with to buy a home in the mountains. He may use it occasionally as he loves to ski, but plans to use it for weekly rentals when he is not there. The MLO can only offer 75% LTV for a rental property, but 90% for a vacation/second home. The MLO decides to call this property a second home on the application. What type of fraud is this? fraud in inducement material omission fraud by deception material misstatement
Material misstatement - Mark has made a material misstatement on behalf of David by stating that the home will be used for purposes other than as disclosed during the telephone application.
It is unlawful to discriminate in lending practices by refusing to grant a loan or altering the terms of a loan because of a borrower's: source of down payment funds via gift from minority parents membership in a protected class occupancy status of a single borrower Employment status or continuance or income
Membership in a protected class - The ECOA, also known as Regulation B, prohibits discrimination in granting credit to people based on sex, age, marital status, race, color, religion, national origin, or receipt of public assistance.
Fred forgets to send out some required disclosures due to a change in circumstance in the required time frame. He backdates them before he delivers them to the borrower. What type of fraud is this? material misstatement fraud by deception misrepresentation material omission
Misrepresentation - Backdating documents or dates of signatures is a form of misrepresentation.
Mortgage broker Carrie was eager to finish up with a customer so that she could make her massage appointment. She was sure that the terms of the loan were right for the customer, but still, the customer felt pressured to sign papers without feeling as though he truly understood all of the terms. This might best be described as: actual fraud. constructive fraud. negligence. mortgage fraud.
Negligence - Negligence is breach of legal duty resulting from carelessness, recklessness, or incompetence. Carrie's actions, while not fraudulent, probably contribute to the public's distrust of the mortgage industry.
Cory is planning to purchase his first home, and his real estate agent said that he must use a specific lender or else face having his loan denied due to his shaky credit record. Is this a legal practice? -Yes, as long as the agent discloses her affiliation with the lender. -Yes, since this is the only lender who will make the deal work. -No, it is illegal to steer a buyer to a lender with the impression that using the creditor is required. -Yes, only certain lenders will loan to higher-risk borrowers.
No, it is illegal to steer a buyer to a lender with the impression that using the creditor is required. - Unfortunately, in many mortgage fraud scams, the buyer is unsophisticated in seeking financing, and may have credit issues that make lending more challenging. The buyer may be told this is the only chance for a home purchase when, in fact, it is a scam. Buyers may choose any lender they want for a purchase transaction.
Frank intentionally withheld information that would disqualify him from obtaining a loan. Frank has committed mortgage fraud as a result of: conspiracy. collusion. omission. misrepresentation.
Omission - Omission is when someone intentionally omits or withholds important information that would disqualify him or her from obtaining a loan.
What is another name for blockbusting, an illegal activity, according to the Fair Housing Act? discrimination steering redlining panic selling
Panic Selling - Blockbusting is also known as panic selling. This is when a homeowner panics due to someone causing fear regarding changes in the neighborhood, which leads them to thinking they need to sell before the neighborhood "goes down."
At closing, buyer Steve sees that the lender changed the agreed upon terms of the loan without prior disclosure, but Steve felt he had no choice but to continue with the loan or lose the ability to purchase the house. This could be an example of: affinity marketing. predatory lending. loan flipping. negative amortization.
Predatory lending - Uncommunicated changes or changes without a valid cause could be an example of predatory lending.
Loans that take advantage of poorly informed consumers through excessively high fees, misrepresentation of loan terms, and frequent refinancing that does not benefit the borrower is: illegal underwriting. predatory lending. mortgage lending. ineffective lending.
Predatory lending - Predatory lending involves loans that take advantage of ill-informed consumers through excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the borrower, and other prohibited acts.
Which is an example of steering? Agent Tom tells homeowners that their property values will drop when a Puerto Rican family moves in. Mortgage banker Brad refuses to make loans for a particular inner city neighborhood. Seller Oscar tells his listing agent to find only Caucasian buyer prospects. Property manager Amy suggests Jake would be happier in a more diverse building.
Property manager Amy suggests Jake would be happier in a more diverse building. - Steering relates to buyers or renters and is defined as channeling prospective buyers or renters to or away from specific neighborhoods.
Which federal legislation prohibits kickbacks and referral fees? RESPA FCRA TILA ECOA
RESPA - The Real Estate Settlement Procedures Act (RESPA) specifically prohibits kickbacks, referral fees, and fee splitting.
The Civil Rights Act of 1866 prohibits discrimination based on: age. race. marital status. disability.
Race - The Civil Rights Act of 1866 prohibits discrimination based on race. There are no exceptions to this law.
What is not a protected class recognized by the Fair Housing Act? disability receipt of income from a public source national origin familial status
Receipt of income from a public source - Receipt of income from a public source is covered by ECOA, but is not mentioned in the Fair Housing Act.
Which is not an indicator of predatory lending? requiring mortgage insurance requiring credit insurance raising the interest rate if a payment is late changing loan terms at the closing
Requiring mortgage insurance - It's common to require mortgage insurance when the borrower makes less than a 20% down payment. The other examples could signal predatory lending. Credit insurance is different than mortgage insurance, and always prohibited to be included as part of a mortgage loan.
Which is least likely to be an indicator of predatory lending? charging excessive prepayment penalties falsifying loan documents requiring mortgage insurance increasing interest charges on late loan payments
Requiring mortgage insurance - Requiring mortgage insurance does not indicate predatory lending.
Jane completed an application for a home loan at XYZ Mortgage Company. She provided them with bank statements, pay stubs, tax returns, and a current mortgage statement. XYZ also pulled her credit report. According to the Gramm-Leach-Bliley Act, which is most likely to be public information? sales price of her current house gross taxable income savings account number credit score
Sales price of her current house - Of these choices, the price that Jane paid for her current home is the information most likely to be public, if you assume that her mortgage was recorded in the public records. Even so, her credit score, taxable income, and savings account number are certainly private and should be protected.
Channeling prospective buyers or tenants to a particular neighborhood based on race, religion, or national origin is an illegal practice known as: blockbusting. redlining. counseling. steering.
Steering - Steering is an illegal practice that may never be done in order to maintain or change the character of neighborhoods.
Mortgage broker Gary works with his appraiser friend to get an inflated value on a house. He then recruits his cousin Bob, who has great credit, to apply for a mortgage on the property, even though Bob is moving to Belize and has no intention of paying off the loan. In this case, Bob could be considered a ________ buyer. forged colluded straw mock
Straw - Someone who purchases a home under fraudulent pretenses for someone else without the intention of ever occupying or making payments is a straw buyer.
The late payment charged, or method of computation used for a late payment charge, is required to be disclosed under: ECOA. TILA. FCRA. HMDA.
TILA - A late payment fee is a true cost of credit and, therefore, must be disclosed to the consumer under the Truth in Lending Act.
If an appraiser intentionally underestimates an appraisal value for the purpose of keeping the values in that area low, that appraisal would be violating which law? TILA Fair Housing Act Equal Credit Opportunity Act Fair Credit Reporting Act
TILA - TILA requires an appraiser to evaluate an appraisal based upon a fair assessment. Appraiser conduct is generally regulated by TILA / Reg Z, whereas equal lending of credit would be governed by ECOA. Intentionally underestimating a property value ly deflates the values of the community.
A consumer calls to ask about a loan product. How does TILA require you to quote an interest rate to him? the interest rate only TILA does not address the quoting of interest rate the annual percentage rate only the APR as well as the interest rate
The APR as well as the interest rate - The Truth in Lending Act requires that the APR be quoted along with the interest rate.
The Fair Housing Act requires lenders to display what in all branch offices? a summary of the Fair Housing Act a list of rights under the Fair Housing Act a business brochure the Equal Housing Opportunity Logo
The Equal Housing Opportunity Logo - The Fair Housing Act requires the displaying of the Equal Housing Lender Poster, which indicates to the public that the lender is in compliance with the Act.
The Financial Privacy Rule is part of what federal act? Truth in Lending Act Dodd-Frank Act Housing and Economic Recovery Act of 2008 Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act includes a provision known as the Financial Privacy Rule.
The Gramm-Leach-Bliley Act is more formally known as the Housing and Economic Recovery Act of 2008. Fair and Accurate Credit Transaction Act. Home Ownership and Equity Protection Act. Financial Modernization Act of 1999.
The Gramm-Leach-Bliley Act is officially titled the Financial Modernization Act of 1999.
What information would be exempt from the privacy requirement of the Gramm-Leach-Bliley Act? a bank customer's account balance the loan amount that appears on a recorded mortgage a consumer's credit score a loan originator gets from the credit bureau income information a consumer includes in a credit application
The loan amount that appears on a recorded mortgage - Information that the company believes to be lawfully public - such as mortgage loan information in a jurisdiction where that information is publicly recorded - is not restricted by the Gramm-Leach-Bliley Act.
To address the problem of property flipping, appraisers must analyze the transfer history of a property for the previous: -three months. -three years for the subject property; one year for the comparable properties. -one year. -eighteen months.
Three years for the subject property; one year for the comparable properties - Appraisers are required to analyze the purchase contract, current listing, and recent prior sales for the past three years. As well, the URAR form asks for research of the subject's transfers from three years prior to the effective date of the appraisal.
The federal Fair Housing Act is also known as the State Civil Rights Law. the Civil Rights Act of 1866. Title VIII. the ECOA.
Title VIII - The federal Fair Housing Act of 1968 is also known as Title VIII of the Civil Rights Act.
Who is exempt from complying with the Fair Housing Act? mortgage brokers appraisers title companies lenders
Title companies - All institutions and persons who engage in the business of selling, brokering, appraising, or lending money on real property must comply with the Fair Housing Act. Title companies do no fall into this category.
Seller Frank knows that he has an outstanding lien on his property, so he pays one of the parties to the transaction to ignore it. Who did Frank most likely involve in his mortgage fraud scheme? title company buyer real estate agent appraiser
Title company - The title company typically researches the status of a title including all public records and liens against it. If the title company intentionally leaves the lien off the title report, the other parties to the transaction may have no knowledge about it and, therefore, be innocent of any attempted fraud.
If any triggering terms are used in an ad, all disclosures must be made EXCEPT: total of closing costs. terms of repayment. APR. amount or percentage of down payment.
Total costs of closing - When triggering terms are used in an ad, TILA requires the disclosure of amount of the down payment, terms of loan repayment, and annual percentage rate. The total closing costs are not required to be stated in the ad.
A for-profit MLO who claims to be a "counselor" in an ad about loan modification would be in violation of what law? Fair Lending Act Home Ownership and Equity Protection Act Truth in Lending Act Fair and Accurate Credit Transaction Act
Truth in Lending Act - The Truth in Lending Act addresses advertising by creditors, including mortgage loan originators, and use of the term "counselor" by a for-profit entity is specifically prohibited.
Which question or concern is not specifically underwritten for a loan file? Is the collateral sufficient to secure the proposed mortgage loan? What is the history of the performance of properties sold in this geographic area? Does the loan transaction conform to lender loan policy? Have the applicants demonstrated the ability and willingness to repay the proposed mortgage?
What is the history of the performance of properties sold in this geographic area? - It is illegal for lenders to consider the loan performance of specific geographic locations. They must lend to credit-worthy and qualified borrowers; to do otherwise might be considered redlining.
Which of the following questions could not be considered as being discriminatory against a protected class when asked of a buyer? What type of house are you looking for? What church do you attend? How many family members will be living with you? Do you have children?
What type of house are you looking for? - Choices A, B, and C could be alleged to be discriminatory in that they might be used to single out individuals on the basis of familial status or religion, both of which are protected classes.
Which of these situations would not violate ECOA? Your customer's last name is Patel and you observe, "That's Indian, right?" A pregnant customer is sitting at your desk and two children who came in with her are in your office. You ask her, "Do you think this is your last child?" While looking at your customer's pay check stubs, you see that child support is being paid and ask, "Do you pay child support, alimony, or separate maintenance?" Your customer's income information include aid to dependent children from the state. You ask, "Are you sure you want to include this as part of your income on this application? It won't look good."
While looking at your customer's pay check stubs, you see that child support is being paid and ask, "Do you pay child support, alimony, or separate maintenance?" - You would not be in violation of ECOA for asking a question that is on the loan application. The other questions, even if asked out of politeness or curiosity, would violate ECOA.
Broker Tom advertises low interest rates and includes the accurate APR. However, when qualified applicants come in, Tom tells them that the smarter loan for them would be one with a slightly higher rate and more fees. Did Tom do anything wrong? Yes, Tom violated UDAP laws by making false statements in advertising. Yes, Tom could be accused of using a bait and switch tactic to earn more. No, he included the accurate APR as required by the Truth in Lending Act. No, he was simply finding the best product for his customer.
Yes, Tom could be accused of using a bait and switch tactic to earn more. - While Tom did include the real APR in the ad, he most likely used that low rate to lure people in, then convinced them to accept different terms, which earned him more commission. This is an example of an illegal bait and switch tactic.
Which is not a requirement of the Safeguards Rule of the Gramm-Leach-Bliley Act? protect against the unauthorized access or use of consumer information in ways that could result in substantial harm or inconvenience to customers protect against any anticipated threats or hazards to the security of consumer records ensure the security and confidentiality of customer records allow consumers to add their phone numbers to a list that prohibits unauthorized calls
allow consumers to add their phone numbers to a list that prohibits unauthorized calls - The Gramm-Leach-Bliley Act requires financial institutions to maintain safeguards to protect customer information, but that does not include maintaining a do not call list.
The Privacy Rule requires that financial institutions provide the consumer with a Consumer Privacy Policy disclosure: annually as long as the relationship continues or before sharing non-public personal information. at closing only. each time the servicing of the loan is transferred. each time the Consumer Privacy Policy is revised.
annually as long as the relationship continues or before sharing non-public personal information. - According to the Gramm-Leach-Bliley Act, this disclosure is required to be provided annually as long as the relationship continues.
Real estate agent Ike tells mortgage broker Tina that he will send her all of his clients if she'll give him $100 for each loan she closes. Although Tina turns him down, she does decide to send Ike tickets to a football game to thank him for referring his clients any way and he accepted them. According to Section 8 of RESPA, neither are in violation. only Ike is in violation since he initiated a kickback scheme. both are in violation since any gratuity could be considered a kickback. only Tina is in violation because she sent a gift.
both are in violation since any gratuity could be considered a kickback. - RESPA considers anyone who initiated, paid, or accepted a kickback to be in violation.
What type of loans is involved in the air loan scheme? FHA VA conventional non-existent
non-existant - An air-loan scheme involves non-existent loans and no collateral loans; for example, as in a mortgage-fraud scheme in which a mortgage loan originator invents a property and a borrower in order to earn profits on completed loan transactions by defrauding lenders.
Which is least likely to be an example of illegal flipping? -purchasing and remodeling a house and selling it for quick profit -an inflated appraisal -a group of sellers and buyers changing ownership of one property among them -a series of sales and quick resales
purchasing and remodeling a house and selling it for quick profit - Purchasing and remodeling a house and then selling it for a quick profit is an appropriate use of flipping, which is perfectly legal. The illegal side of flipping is when colluding parties profit from the sale of property with an illegally inflated appraisal that supports a loan. It may involve a series of sales and quick resales, with one property and a group of sellers and buyers changing ownership among them.
If a lender refuses to lend in a specific area because it is inhabited by a protected class (e.g., racial minorities), the lender would be guilty of: fraud. redlining. steering. blockbusting.
redlining - Redlining is when a lender refuses to lend because of the demographics of where the property is located and not the borrower's credit worthiness.
If you ask your obviously pregnant female borrower how many children she intends to have, you will be in violation of: no federal law. the Home Mortgage Disclosure Act. the ECOA. the Civil Rights Act of 1866.
the ECOA - The ECOA makes it illegal for lenders to consider the borrower's child-bearing intentions.
In a fraud for property scheme, it is likely that: a group of individuals is colluding to gain from the scheme. the borrower doesn't intend to repay the loan. illegal property flipping occurs. the borrower seeks land ownership.
the borrower seeks land ownership - In fraud for property, it is likely that the only perpetrator is the borrower who seeks housing and/or cash from the loan. In addition, this fraud involves a single loan in which the borrower intends to repay.
The Fair Housing Act does NOT require that the Equal Housing Opportunity logo be displayed on: websites. the promissory note. advertisements. business brochures.
the promissory note - The Fair Housing Act requires that the Equal Housing Opportunity logo be displayed on all printed promotional material, NOT on the actual loan closing documents.
