Federal Mortgage-Related Laws and Regulations
Domain 1 covers the federal statutes behind every disclosure, denial, and fee in a mortgage file: TILA/Reg Z and RESPA/Reg X with the TRID integration, ECOA/Reg B, the Fair Housing Act, HMDA, the SAFE Act, RESPA Section 8, GLBA privacy, and the ATR/QM rules. The exam favors timing, tolerance, and adverse-action scenarios over pure definitions.
Disclosure timing under TRID
- The creditor must deliver or mail the Loan Estimate no later than three business days after receiving an application - six pieces of information: name, income, Social Security number, property address, estimated value, loan amount.
- The consumer must receive the Loan Estimate no later than seven business days before consummation.
- The consumer must receive the Closing Disclosure no later than three business days before consummation.
- A revised Loan Estimate triggered by a valid changed circumstance must be received no later than four business days before consummation.
Tolerances sit in buckets: zero tolerance for fees paid to the creditor or its affiliate, a 10 percent cumulative limit for services the consumer can shop for, and no limit for items such as prepaid interest and escrow deposits.
Credit and fair lending
Under ECOA/Reg B the creditor must send an adverse action notice within 30 days of a completed application and a notice of incompleteness within 30 days. Reg B protected classes add marital status, age, and public-assistance income to the Fair Housing Act list. The SAFE Act supplies the licensing framework: pre-licensure education, the national test with uniform state content, a unique identifier, and annual continuing education.
Worked example
An application arrives Tuesday, January 7. The Loan Estimate must be mailed or delivered by Friday, January 10. A changed circumstance later pushes the APR beyond tolerance and a revised Loan Estimate is issued; consummation is set for Friday, January 24. Counting back four business days - Thursday the 23rd, Wednesday the 22nd, Tuesday the 21st, then Friday the 17th because Monday the 20th is a federal holiday - the borrower must receive the revised estimate by Friday, January 17.
Traps that cost marks
- Using the general business-day definition (offices open for substantially all business) for the seven-day and three-day waiting periods; those use the precise definition, meaning every day mail is delivered.
- Assuming any re-disclosure restarts a waiting period the borrower already completed.
- Treating a disclosed referral fee as a cure for a RESPA Section 8 violation; disclosure alone is not a safe harbor.
- Confusing a counteroffer with a denial - the counteroffer triggers different timing and content rules.