FL MLO flashcards
FL MLO · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- RESPA Section 8
- Prohibits giving or receiving anything of value for referrals of settlement service business and prohibits unearned fee splits; violations can lead to fines and imprisonment.
- Loan Estimate timing
- The lender must deliver or mail the Loan Estimate within three business days after receiving an application, and the borrower must receive it no later than four business days before consummation.
- Right of rescission
- TILA gives the borrower three business days to cancel a refinance or home equity line secured by the principal dwelling; purchases and investment properties are excluded.
- ECOA adverse action notice
- A creditor must notify an applicant of adverse action within thirty days after receiving a completed application, stating reasons or how to request them.
- HMDA reporting rule
- Regulation C requires covered mortgage lenders to collect and report data on applications, originations, and purchases, including borrower race, ethnicity, sex, and loan pricing.
- HOEPA high-cost trigger
- A loan is high-cost if the APR exceeds the average prime offer rate by 6.5 points for a first lien or 8.5 for a subordinate lien, or points and fees exceed 5 percent for loans of $20,000 or more.
- Flood insurance requirement
- Regulated lenders must require flood insurance on improved structures in Special Flood Hazard Areas, at least equal to the lesser of the loan balance or maximum available coverage.
- SAFE Act licensing
- Mortgage loan originators must be licensed or registered, complete education, pass a test, submit fingerprints, and meet character and fitness standards before originating loans.
- LTV formula
- Loan-to-value equals the loan amount divided by the lesser of the purchase price or appraised value; combined LTV includes all liens secured by the property.
- DTI formula
- Debt-to-income equals total monthly debt payments divided by gross monthly income; the back-end ratio includes housing plus all recurring debts.
- PITI components
- Principal, interest, taxes, and insurance are the four parts of a typical monthly housing payment; taxes and insurance are often held in escrow.
- PMI cancellation at 80%
- A borrower may request cancellation of borrower-paid private mortgage insurance when the loan balance reaches 80 percent of the original value based on the amortization schedule.
- ARM interest rate caps
- Adjustable-rate mortgages have initial, periodic, and lifetime caps that limit rate increases; the fully indexed rate equals the index value plus the lender's margin.
- Discount point definition
- One discount point equals one percent of the loan amount and is paid at closing to reduce the interest rate and the monthly payment.
- Lender versus owner title
- Lender's title insurance protects the mortgagee up to the loan balance, while owner's title insurance protects the buyer's equity against covered title defects.
- Six application pieces
- Borrower name, income, Social Security number, property address, estimated property value, and loan amount; receipt triggers Loan Estimate timing and disclosure duties.
- Appraisal independence rule
- Lenders and loan originators may not coerce or improperly influence appraisers, and the borrower must receive a copy of the appraisal promptly.
- Closing Disclosure timing
- The borrower must receive the Closing Disclosure at least three business days before consummation; certain changed terms require a revised disclosure and a new waiting period.
- HPML escrow requirement
- A first-lien higher-priced mortgage loan requires an escrow account for property taxes and insurance unless a specific regulatory exemption applies.
- Rate lock agreement
- A rate lock sets a specified interest rate for a stated period and must disclose the expiration date, cost, and any float-down option.
- Pre-qualification versus pre-approval
- Pre-qualification estimates borrowing capacity from unverified information, while pre-approval follows credit and income review and carries more weight with sellers.
- Mortgage fraud red flags
- Common indicators include inflated income or appraisals, occupancy misrepresentation, straw buyers, undisclosed second liens, and sudden changes in transaction terms.
- ECOA prohibited bases
- Race, color, religion, national origin, sex, marital status, age, and receipt of public assistance are protected; the Fair Housing Act adds familial status and disability.
- Steering in lending
- Directing borrowers toward less favorable loan products or terms because of a prohibited characteristic violates fair lending laws and can trigger enforcement action.
- Affiliated business disclosure
- RESPA requires a written disclosure of an affiliate relationship and estimated charges; the borrower is not required to use the affiliated settlement service provider.
- Advertising trigger terms
- An advertisement stating a rate, payment, or finance term must disclose the APR and other required terms, and must include the originator's NMLS license number.
- GLBA privacy obligations
- The Gramm-Leach-Bliley Act requires financial institutions to provide privacy notices and safeguard nonpublic personal information, with opt-out rights for certain sharing.
- SAFE pre-licensing hours
- At least twenty hours of NMLS-approved pre-licensing education, including three hours of federal law, three hours of ethics, and two hours of nontraditional mortgage products.
- Annual continuing education
- Licensed mortgage loan originators complete at least eight hours of NMLS-approved continuing education each year, including federal law, ethics, and nontraditional mortgage topics.
- State regulator authority
- The state mortgage regulator may examine licensee records, issue subpoenas, impose fines, suspend or revoke licenses, and order consumer restitution.
- License renewal through NMLS
- Mortgage loan originator licenses renew annually through NMLS; late renewal may require reinstatement, additional fees, and satisfaction of continuing education.
- Unlicensed origination prohibition
- Taking applications or negotiating loan terms without a valid license is prohibited and can result in civil penalties, criminal prosecution, and loss of eligibility to be licensed.