PSI Broker Exam Prep - Financing & Credit Laws & Rules. Exam Review Paper. Rated A+

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PSI Broker Exam Prep - Financing & Credit Laws & Rules. Exam Review Paper. Rated A+ Truth in Lending Act (TILA) -✔-1968, requires lenders to disclose credit terms and conditions when advertis... ing triggers loan terms, so as not to mislead consumers Trigger terms -✔-ads that would require the full disclosure of all terms include down payment, payment amount, # of payments, & interest rate Regulation Z -✔-requires mortgage lenders to follow TILA disclosure requirements for real estate advertisements that include credit terms Real Estate Settlement Procedures Act (RESPA) -✔-1974, consumer protection statute designed to protect homebuyers from unscrupulous lending and settlement practices Dodd-Frank Wall Street Reform Act of 2010 -✔-handed RESPA responsibility to the Consumer Protection Finance Bureau (CFPB) Licensees are prohibited from -✔-paying or receiving a fee, kickback, or anything of value based on referring customers or clients to a settlement service provider Equal Credit Opportunity Act (ECOA) of 1974 -✔-prohibits lenders from making credit unavailable or offering less favorable terms based on protected class status vs. creditworthiness What are the protected classes? -✔-race, color, religion, national origin, sex, marital status, or income source What does the CFPB regulate? -✔-enforces regulations that prohibit lenders from funding higherpriced mortgage loans without regard for a borrower's ability to repay the loan Qualified mortgage -✔-a loan category that has certain affordability features; certain loan attributes are prohibited What loan attributes are prohibited with a qualified mortgage? -✔--interest only loans or interest-only periods on a loan -Negative amortization -Balloon payments that are required at the end of a loan term to pay the loan off -loan terms of more than 30 years TILA/RESPA Integrated (TRID) disclosures -✔-RESPA requires lenders provide written disclosure to help to make estimated and final settlement costs clear and fair to consumers Loan Estimate (LE) -✔-lenders provide this to applicants within 3 business days of loan application What does the loan estimate do? -✔-provides buyers with the costs they are likely to pay at settlement and discloses the mortgage loan specifics, such as key features, costs and risks Closing Disclosure (CD) -✔-lenders must provide at least 3 business days before closing, provides final loan details, including loan terms, projected monthly payments, fees and other closing costs Predatory lending -✔-unfair or abusive lending to buyers. take advantage of consumers to increase their debt while financing risky loan [Show More]

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