AR MLO cheat sheet

RESPA Section 8 prohibits fees, kickbacks, or things of value for referrals of settlement service business; penalties include treble damages and fines.

TILA/Regulation Z requires disclosure of the APR, finance charge, amount financed, and total of payments within 3 business days of application.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CRA rights.

HMDA (Regulation C) requires reporting of application, origination, and purchase data for covered loans and institutions above volume thresholds.

TRID requires the Loan Estimate within 3 business days of application and the Closing Disclosure at least 3 business days before consummation.

SAFE Act requires MLOs to be licensed or registered, pass a national test, complete pre-licensure education, and submit to criminal background checks.

Flood Disaster Protection Act mandates flood insurance for properties in SFHAs with federally related loans and requires escrow for certain loans.

Fair Housing Act prohibits discrimination in sale, rental, and financing of dwellings based on protected classes including familial status and disability.

Regulation Z ability-to-repay requires verification of income, assets, debts, and consideration of residual income and debt-to-income ratio.

The Arkansas Securities Department, through its Mortgage Division, licenses mortgage bankers, brokers, and loan originators under the Arkansas Residential Mortgage Licensing Act.

Arkansas licensees must maintain a surety bond; the bond amount is set by statute and scales with the licensee's loan volume or number of originators.

Arkansas Mortgage Loan Originator license requires pre-licensing education, passage of the SAFE test, and sponsorship by a licensed mortgage banker or broker.

Arkansas law requires licensees to notify the Commissioner of changes in control, name, or principal place of business within statutory timeframes.

The Arkansas Home Loan Protection Act restricts high-cost home loans, limiting prepayment penalties and prohibiting certain terms such as balloon payments.

Licensee records must be maintained and made available to the Arkansas Securities Department for examination; retention is generally 3 years.

Arkansas requires mortgage loan originators to complete annual continuing education consistent with SAFE Act requirements (8 hours, including 1 hour of AR law).

Unlicensed mortgage lending activity in Arkansas is subject to civil penalties and cease-and-desist orders issued by the Securities Commissioner.

DTI = total monthly debt obligations divided by gross monthly income; conventional guidelines typically cap at 43-50% depending on program.

LTV = loan amount divided by appraised value or purchase price (lesser of the two); CLTV includes all liens on the property.

Front-end ratio measures housing expense only; back-end ratio includes housing plus all recurring debts.

FHA loans allow lower credit scores and higher DTI with mortgage insurance; conventional loans may require PMI above 80% LTV.

VA loans typically require no down payment and no monthly mortgage insurance but carry a funding fee unless exempt.

USDA loans target rural areas, require income limits, and often feature 100% financing with guarantee fees.

A rate lock commits the lender to a specified interest rate for a set period; extension fees apply if the lock expires before closing.

Underwriting evaluates the three Cs: credit, capacity (income and DTI), and collateral (appraisal and LTV).

Escrow/impound accounts collect property taxes and insurance monthly; RESPA limits escrow cushions to 1/6 of annual disbursements.

Occupancy fraud occurs when a borrower misrepresents intent to occupy a property as a primary residence to obtain better terms.

Income fraud includes falsified pay stubs, altered tax returns, and undisclosed or inflated employment; verify with third-party sources.

Straw buyer schemes involve using a nominee to obtain financing for a hidden beneficiary; a red flag for mortgage fraud.

Red flags include sudden changes in employment, unusual down payment sources, and inconsistent application data across documents.

The Fair Credit Reporting Act (Regulation V) gives consumers rights to dispute inaccurate credit information and requires permissible purpose for pulls.

GLBA requires financial institutions to safeguard nonpublic personal information and provide privacy notices.

The Dodd-Frank Act prohibits unfair, deceptive, or abusive acts or practices (UDAAP) in consumer financial products.

Suspicious Activity Reports (SARs) must be filed with FinCEN for suspected mortgage fraud; tipping off the subject is prohibited.

Ethical duties include confidentiality, avoiding conflicts of interest, and disclosing compensation and affiliate relationships.

NMLS is the nationwide licensing system; MLOs must maintain an active NMLS record and renew annually by December 31.

SAFE Act annual renewal requires 8 hours of continuing education, including 3 hours of federal law, 2 hours of ethics, and 2 hours of non-traditional mortgage lending.

Licensees must report changes to NMLS within statutory timeframes, including name changes, criminal history, and regulatory actions.

The NMLS Consumer Access website allows consumers to verify an MLO's license status and employment history.

Records retention for mortgage loan files is generally 3 years after the loan is paid off or the application is denied, per federal and state rules.

A mortgage loan originator may only originate for one licensed entity at a time and must be sponsored by that entity.

Compliance management includes monitoring, testing, training, and auditing to ensure adherence to federal and state requirements.

Failure to maintain licensing or complete CE can result in fines, suspension, or permanent loss of licensure.