Term
| What are YSP's referred to as? |
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Definition
| Borrower credits and they reduce the borrower settlement charges. |
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Term
What is the double compensation?
How is it prohibited? |
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Definition
| LO can only receive compensation from one source for one transaction. |
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Term
What is steering?
How is it prohibited? |
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Definition
LO cannot "steer" a borrower to a particular product in order to increase compensation.
The "Final Rule" provides safe harbor defines where an LO can offer multiple options. |
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Term
| What are "Markups & Up Charges"? |
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Definition
| When a settlement provider increases the charges of another settlement provider and retains the fees. |
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Term
| What does TILA /regulation Z prohibit? |
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Definition
Misleading Advertisements:
Fixed rates & payments
Misleading comparisons
Misrepresentation about gov programs
Misrepresentation about gov endorsements
Use of current lenders name
Claims of debt elimination
misleading use of "counselor" for debt
Misleading foreign language Ads |
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Term
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Definition
Gramm-Leach-Bliley Act
Financial modernization act
Title V |
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Term
| What is ECOA and who does it protect? |
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Definition
Equal Credit Opportunity Act.
Promote availability of credit to all regardless of race, color, religion, national origin, sex, marital status, age. |
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Term
| What does Title XIV subtitle F of Dodd Frank do? |
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Definition
Protect the appraiser by prohibiting:
- Coercion, bribery, any action to influence the appraiser
- Appraisers (and their company)from having a financial interest in the property
- Extension of credit by a creditor that knows there's been a violation of the prohibition on coercion or prohibition of conflicts of interest. |
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Term
| What does the final rule protect? |
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Definition
2010 Interim "Final Rule" applies to "any person" performing valuation services. It forbids interference the judgement of the appraiser (or person preparing the valuation)
It prohibits:
- Coercion (no attempt to directly or indirectly influence)
- Misrepresentation (materially misrepresent value of home )
- Conflict of Interest (prohibit appraisal by owners or interested parties) |
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Term
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Definition
| The material intentional misstatement, misrepresentation or omission relied upon by an underwriter, or lender to fund, purchase, or insure a loan. |
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Term
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Definition
| borrowers inflated income and enhanced info on low/no doc loans. Illegal |
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Term
| What is predatory lending? |
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Definition
Real estate agents & MLO's encourage a consumer to purchase a home based on an inflated appraisal or steering him to high cost mortgage products
- Criminal action |
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Term
| What is industry insider Fraud? |
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Definition
| Conspiratorial actions of members of the mortgage industry to use lending transactions as a means to get funds from lenders via fraudulent loans. |
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Term
| What are some of the tactics used by fraudsters? |
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Definition
-inflated appraisals
-property flipping
-Straw buyers (allow use of their PII to buy a property -fraud)
-Straw sellers (falsely claim ownership)
-Air loans (fictitious borrower obtains loan secured w/ fake property)
-ID theft (use others PII to secure loan)
-Sale or assignment of a sales contract (sell over valued contract)
-Cursory inspections (unload inflated property w/little no inspection) |
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Term
| How can ID be verified to prevent ID theft? |
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Definition
Verify ID:
- verify SSN with SSA
- Credit histories consistent with applicants age
- Doc's should be clear and readable
- Co-borrowers use of nicknames not related to actual name on app |
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Term
| How can Documents be verified to prevent Fraud? |
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Definition
- Compare signatures
- Verify address's
- Track chain of custody for verifications
- Look for watermarks on pay stubs, bank statements & W2's
- compare earnings to public job sites
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Term
| What items can be validated to stop fraud? |
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Definition
Identity
Documentation
Appraisals
Sales contract (scratch outs)
Credit report (compare CR to Application)
Common sense Test (Does it add up) |
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Term
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Definition
The uniform Standards of Professional Appraisal Practice.
1989. |
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Term
| What does an underwriter do? |
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Definition
| He provides a layer of checks and balances between LO and Loan funding. Verifies that applicant and property information meets the program requirements for the requested loan. |
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Term
| What are underwriting common red flags? |
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Definition
Red Flags
- Loan Application
- Credit Report
- Employment & Income
- Appraisal |
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Term
| What Act deals with Appraisals, appraisal reviews and Appraiser communication? |
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Definition
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Term
| Which act is responsible for assuring borrowers receive accurate information about their credit? |
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Definition
| Fair Credit Reporting Act |
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Term
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Definition
| The National Mortgage Licensing System & Registry |
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Term
| What are the 3 C's of credit qualification? |
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Definition
capacity - refers to your ability to repay the debt
character - honesty and reliability
capital - valuable assets such as real estate with which to repay debt if income is unavailable |
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Term
| What statement is required if an Adverse Action is received? |
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Definition
| ECOA Notice that prohibits discrimination against credit applicants |
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Term
| Two primary arguments about the duties of a mortgage broker revolve around weather or not ________is/are applied |
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Definition
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Term
With regard to fiduciary duties the borrower is the_____
and the broker is the ______ |
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Definition
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Term
| How are service release premiums earned? |
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Definition
| Lenders or servicers who release their right to service a loan in exchange for a premium. |
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Term
| What legislation regulates proper management of escrow accounts? |
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Definition
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Term
| What is a mortgage fraud database that seeks to ID industry insiders likely to participate in fraud schemes? |
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Definition
| MARI - Mortgage Asset Research Institue |
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Term
| What is the Consumer mortgage awareness group? |
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Definition
| A website that provides info to consumers about mortgage; terminology, products and programs. It is a repository for names and contact information of mortgage proffesionals |
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Term
| What are credit life premiums? |
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Definition
| a practice predatory lenders use to increase profits. |
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Term
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Definition
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