Real Estate - Section 17
Which Act Provided rental assistance to prevent homelessness
ARRA
Stimulus package created as a response to the economic crisis
American Recovery & Reinvestment Act (ARRA): 2009
Called the "stimulus package," its goals were to create and save jobs, spur economic activity, and increase accountability and transparency in government spending.
American Recovery and Reinvestment Act (ARRA), 2009
Alternatives to foreclosure include deed in lieu of foreclosure, short sale, or ______.
Bankruptcy
A bank makes public the results of a federal agency review. This describes which Act?
CRA
Requires financial institutions to invest in the communities they serve
CRA
Requires lenders to invest in development and rehabilitation of the communities they serve
CRA
What's the acronym for the legislation that requires financial institutions to invest in the communities they serve?
CRA
The ______ was a response to the practice of redlining and was enacted in 1977.
Community Reinvestment Act
Created in response to the practice of redlining (lenders' refusal to finance housing in specific minority-based neighborhoods).
Community Reinvestment Act (CRA): 1977
Prohibits lenders from denying credit to applicants on the basis of protected class status
ECOA
Agency created by HERA that regulates and manages the finances of the government-sponsored entities Fannie Mae and Freddie Mac.
Federal Housing Finance Agency (FHFA)
Which of the following is an acceptable ad based on Regulation Z? Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points. Get a low interest rate of 4.75% on a monthly payment of $900. Get a low interest rate of 4.75%, with 85% loan to value. Get a low interest rate of 4.75% with as little as 3% down.
Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.
Allows review of lending data to evaluate where mortgages are given and where they are not
HDMA
The ______ Act was legislation aimed primarily at addressing the effects of the subprime mortgage crisis.
Housing and Economic Recovery
o Designed to address the subprime mortgage crisis. o Provisions included the SAFE Mortgage Licensing Act and the Mortgage Disclosure Improvement Act.
Housing and Economic Recovery Act (HERA): 2008
What's the purpose of the Equal Credit Opportunity Act?
It requires lenders to make credit equally available to all creditworthy applicants, regardless of the applicant's protected class status.
What type of foreclosure requires the lender to file a lawsuit to initiate a foreclosure sale
Judicial
Both the Housing and Economic Recovery Act and the American Recovery and Reinvestment Act funded a program called the ______ program, which provided emergency assistance grants to states to purchase and redevelop foreclosed and abandoned homes and residential properties.
Neighborhood Stabilization
One of the programs spurred by HERA which gave emergency assistance grants to states to purchase and redevelop foreclosed and abandoned homes and residential properties.
Neighborhood Stabilization Program (NSP),
Eliminates illegal referral fees among settlement service providers
RESPA
Tilly is applying for a loan so she can buy the home of her dreams. She protects herself by making sure she understands the facts and her responsibilities regarding a mortgage. Meanwhile, TILA protects Tilly by ___________.
Requiring lenders to make full disclosure of the terms and conditions in any offers of credit
This foreclosure alternative results in proceeds insufficient to cover the amount the borrower owes and has to be negotiated with the lender.
Short sale
Requires lenders to make full disclosure of the terms and conditions of credit
TILA
created in response to the practice of redlining.
The Community Reinvestment Act (CRA)
A "homes for sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true? The ad is in compliance with TILA because condominiums aren't covered under Regulation Z. The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms. The ad is not in compliance because TILA requires all financing terms to be stated if the APR is stated. The ad is not in compliance with TILA because it mentions financing without including all of the terms of the financing.
The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms.
In South Carolina, who conducts the foreclosure sale? Where does this sale take place?
The county sheriff conducts the sale at the courthouse in the county where the property is located. Sales usually take place on the first Monday of each month (or Tuesday when Monday is a holiday) starting at 11 a.m. and closing no later than 5 p.m.
What is a deficiency judgment?
The mortgagee goes after the mortgagor for the amount owed and not covered by an auction sale.
The borrower has equitable title, but the lender or trustee holds legal title to the property. Does this describe Lien Theory or Title Theory?
Title theory
What is the purpose of The Equal Credit Opportunity Act (ECOA)?
to make credit equally available to all credit-worthy applicants. ECOA prohibits creditors from discriminating against protected classes or asking for certain types of information.
What is the purpose of The Community Reinvestment Act (CRA)?
to meet the needs of their communities by investing in development and rehabilitation efforts, especially those that enable low- and moderate-income individuals and families to afford a home.
What is the purpose of the Consumer Financial Protection Bureau (CFPB)?
to promote fairness and transparency for mortgages, credit cards, and other consumer financial products and services
What is the purpose of The Home Mortgage Disclosure Act (HMDA) of 1975?
to provide the public and elected officials with sufficient information to enable them to determine whether financial institutions are fulfilling their obligations to serve the housing needs of the communities and neighborhoods in which they're located. o HMDA requires many financial institutions to maintain, report, and publicly disclose information about mortgages. o This helps public officials make decisions and policies, and it reveals lending patterns that could be discriminatory.
Which act Created tax credits for financing low-income housing construction
ARRA
Recovery act that includes SAFE and MDIA
HERA
South Carolina is a ______ theory state.
Lien
Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act?
No; commercial and business loans are exempt from RESPA requirements.
Alternative to foreclosure where The borrower pays all amounts owed (and possibly the entire loan amount).
Repayment
Periodically, the lender is reviewed by a federal financial agency, such as the Comptroller of the Currency, the Federal Reserve's Board of Governors, the FDIC, or the Office of Thrift Supervision. This is thanks to what law?
The Community Reinvestment Act (CRA)
The American Recovery and Reinvestment Act provided mortgage assistance to ______.
Wounded servicemen and servicewomen
What type of foreclosure Doesn't involve a lawsuit; power of sale clause protects a lender's right to foreclose
non-judicial
It may be used if the deed of trust includes a power-of-sale clause.
non-judicial foreclosure process
In South Carolina, A notice of foreclosure sale is provided to the borrower and published for at least ___ consecutive weeks leading up to the foreclosure sale.
3 consecutive weeks
If there aren't any objections within ___ months following the foreclosure sale date, the sale is finalized, and the deed is transferred to the new owner.
3 months
If borrowers don't request an intervention within ___ days, the foreclosure process continues.
30 days
If the lender is going to seek a deficiency judgment, additional bids may be accepted for ___ days in a process called upset bidding.
30 days The highest bidder at the end of the 30 days is the winner.
According to the MDIA, Lenders must allow applicants at least ___ business days to review the Loan Estimate, and a minimum of ___ business days to review the Closing Disclosure form.
7; 3
Brittany and Mac received a credit of $8,000 for the home they purchased in June 2009. Which Act is represented in this scenario?
ARRA
Lt. Derek Lee was wounded in Iraq, and the fallout from that event made it hard for his family to make mortgage payments. He received mortgage assistance that prevented a foreclosure. Which Act is represented in this scenario?
ARRA
This act, which provides oversight and regulation to agencies and their roles, was an effort to balance the potential for a too-powerful federal government.
Administrative Procedure Act: 1946
This is the legal process of discharging or restructuring a borrower's debts.
Bankruptcy
Some borrowers may qualify for a foreclosure intervention. What are the requirements?
Borrower lives on the property. Property is borrower's primary residence.
foreclosure alternative where the borrower surrenders the deed to the lender.
Deed in lieu of foreclosure
The Truth in Lending Act requires lenders to make certain ______ to consumers.
Disclosures
Which act created the Consumer Financial Protection Bureau (CFPB)?
Dodd-Frank Act
Response to the financial crisis that started in 2007. Intended to create stricter regulation of the financial services industry.
Dodd-Frank Wall Street Reform & Consumer Protection Act
A lender extends credit to a Muslim applicant and to an equally creditworthy Protestant applicant. This describes which Act?
ECOA
A lender sends a mortgage applicant a copy of the appraisal for the property being purchased. This describes which Act?
ECOA
Lists protected classes against whom lenders may not discriminate when making credit unavailable
ECOA
What's the acronym for the legislation that prohibits lenders from denying credit to applicants on the basis of their protected class status?
ECOA
Which of these factors contributed to the economic crisis? Easier credit increased the number of subprime mortgages. Fannie Mae's efforts increased homeownership rates. People generally believed that housing prices would continue to rise. The SEC relaxed capital requirements on investment firms. HUD required lenders to make more subprime loans.
Easier credit increased the number of subprime mortgages. Fannie Mae's efforts increased homeownership rates. People generally believed that housing prices would continue to rise. The SEC relaxed capital requirements on investment firms. (EXPLANATION: HUD may have taken actions that contributed to relaxed lending restrictions, but it did not require lenders to make subprime loans.)
What is the CFPB's three-pronged approach to its mission of consumer protection?
Education, Enforcement, Research - Education, through plain-English notices such as "Know Before You Owe" publications for mortgagors, credit borrowers, and consumers obtaining student loans. - Enforcement, through rule-making, supervision, and enforcement of federal consumer financial protection laws, and restricting unfair, deceptive, or abusive acts or practices against consumers. - Research, through response and investigation of consumer complaints, researching consumer behavior, and monitoring financial markets for new risks to consumers.
Dawn was "under water" on her mortgage, but her lender allowed her to refinance using the HOPE for Homeowners program. Which Act is represented in this scenario?
HERA
Tracey navigates to the FHFA website to review recent audits of Fannie Mae and Freddie Mac. Which Act is represented in this scenario?
HERA
Which Act Included the Mortgage Disclosure Improvement Act
HERA
Which Act Included the SAFE Mortgage Licensing Act?
HERA
A bank publicly discloses information about the mortgages it granted. This describes which Act?
HMDA
Requires financial institutions to report their mortgage data
HMDA
South Carolina's predatory lending law is called ______.
High Cost and Consumer Home Loan Act
Requires documentation to show that lenders are serving the housing needs of their communities.
Home Mortgage Disclosure Act (HMDA): 1975
Who must follow the requirements of The Equal Credit Opportunity Act (ECOA)?
Lenders and real estate professionals who arrange financing
The borrower holds legal and equitable title, and the lender has a lien against the property. Does this describe Lien Theory or Title Theory?
Lien Theory
In addition to reducing settlement costs, RESPA helps protect the consumer by requiring clarity around settlement fees. The borrower in a real estate transaction must receive certain disclosures. What are the two names of the disclosure forms related to RESPA?
Loan Estimate Closing Disclosure
foreclosure alternative where The borrower works with the lender to restructure or change the terms of the existing loan.
Loan modification
This act prohibits lenders from charging anything other than a credit report fee prior to disclosing the terms of the loan.
MDIA
This act stipulates that the only advance fee that a creditor can charge a borrower (before disclosing the terms of the loan) is a credit report fee.
MDIA (MORTGAGE DISCLOSURE IMPROVEMENT ACT)
This act amends TILA to require specific timing related to disclosures that give consumers time to think about the loan they're about to obtain.
MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA)
Tilly is a high school teacher who's decided to purchase a home nearer to the school where she works. She looks through a "Homes for Sale" magazine to see if there are any homes she can afford, and she sees a listing for a cute two-bedroom with a fenced yard big enough for both of her dogs! The price is a little high, but the ad excitedly proclaims, "Financing available!" Does TILA require that Tilly see additional terms of credit with this ad?
No "Financing available" doesn't count as a specific credit offer, so you're right; this ad isn't required to provide any additional credit information. If the ad had listed a specific credit term, then all the relevant credit terms would also have to be stated in the ad.
Are there currently any federal or South Carolina laws in place to protect tenants of residential properties going through foreclosure?
No The federal Protecting Tenants at Foreclosure Act of 2009 went into effect at a time when foreclosures were high. & expired in 2014
Eliminates kickbacks and referral fees among settlement service providers to make settlement more understandable and affordable for consumers.
Real Estate Settlement Procedures Act (RESPA): 1974
The Equal Credit Opportunity Act (ECOA) is also known as Regulation ___.
Regulation B
Tilly's lender explains to her that ____________ requires that she be provided with a disclosure statement within three days of receiving her loan application.
Regulation Z if you hear a lender talking about Regulation Z, you should understand that the lender likely means the rules surrounding the Truth in Lending Act.
The ____ Act sets a minimum standard for licensing and registering mortgage loan originators (MLOs).
SAFE
This act sets minimum standards for licensing of mortgage loan originators.
SAFE
When implemented, ____ should allow consumers to conduct research, obtain unbiased professional information, and make informed decisions when choosing lending professionals.
SAFE
___ helps consumers make an informed choice about the lending professionals they use.
SAFE
Zack and April are purchasing a home. They apply to three different lenders and review the Loan Estimates they receive. Each form includes a field identifying the National Mortgage Licensing System ID number for the lender. What is the act that requires this licensing identification to be available to consumers?
SAFE Act
Ray is in a bit of a predicament. He owes more on his mortgage than his property is worth, but can no longer afford the payments. He receives permission from his lender to sell the property for less than what he owes. What is this an example of?
Short sale
a response to discriminatory practices by lenders that made credit unavailable to people or offered less favorable terms based on protected class status, and not on their credit-worthiness.
The Equal Credit Opportunity Act (ECOA)
What 3 Laws were enacted by Congress as a result of discriminatory practices?
The Equal Credit Opportunity Act (ECOA) The Home Mortgage Disclosure Act (HMDA) The Community Reinvestment Act (CRA)
One of the programs spurred by HERA which aimed to stabilize the housing market by preventing foreclosures and helping subprime borrowers refinance into more affordable fixed-rate mortgages. - The program encouraged lenders to write down principal loan balances to a maximum of 96.5% of the home's new appraised value (since home values had fallen for many of these properties). - The Federal Housing Administration (FHA) was authorized to insure up to $300 billion in new 30-year fixed rate mortgages for this purpose.
The HOPE for Homeowners program
created when it became clear that some financial institutions had contributed to the decline of certain geographic areas by failing to provide adequate home financing to qualified applicants with reasonable terms and conditions.
The Home Mortgage Disclosure Act (HMDA) of 1975
created to address the subprime mortgage crisis.
The Housing and Economic Recovery Act of 2008 (HERA)
creates a level playing field for real estate licensees and protects consumers from increased costs due to illegal kickbacks and referral fees among settlement service providers.
The Real Estate Settlement Procedures Act (RESPA)
Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document?
To detail the estimated closing costs for Lawrence's loan
Regulation Z codifies the rules of the ______.
Truth in Lending Act
Part of the Consumer Credit Protection Act, this requires full disclosure of the terms and conditions of credit.
Truth in Lending Act (TILA): 1968
A lender seeks to recoup the difference from the mortgagor when the foreclosure sale isn't enough to pay off the mortgage lien and any associated fees.
deficiency judgment
South Carolina uses a ___ foreclosure process.
judicial
South Carolina uses a ____ as its security instrument and is a lien theory state.
mortgage