Federal Mortgage-Related Laws
This domain covers the federal statutes - and the regulations that implement them - that set the ground rules for every residential mortgage transaction: disclosure timing, fair lending, anti-kickback, servicing, and ability to repay. Expect roughly one in four scored items here, and expect them to be precise about days and thresholds.
The statute-to-regulation map
- RESPA → Regulation X (12 CFR 1024). Section 8 bars fees for referral of settlement business; Section 6 governs servicing transfers and escrow limits; the AfBA requires disclosure when an affiliate performs a settlement service.
- TILA → Regulation Z (12 CFR 1026). APR and finance charge, right of rescission (three business days on refinances of a principal dwelling - not on purchases), loan originator compensation rules, ATR/QM, HPML escrow.
- ECOA → Regulation B. Thirty days to issue adverse action; cannot discourage applicants; must supply a copy of any appraisal relied on.
- Homeowners Protection Act. PMI cancels on borrower request at 80% of original value, automatically at 78%.
- Others: Fair Housing Act, HMDA/Regulation C, Flood Disaster Protection Act, GLBA privacy, SAFE Act.
TRID timing that gets tested
Loan Estimate no later than three business days after application; a revised LE must be received four business days before consummation; the Closing Disclosure must be received three business days before consummation. Zero-tolerance fees change only on a valid changed circumstance.
Worked example. Application taken Monday. The LE goes in the mail Wednesday - timely, because the deadline is the third business day after application and mailing a day earlier satisfies it. But closing is set for the following Friday and a rate lock change moves the APR on the prior Tuesday; a revised LE mailed that Tuesday is not received four business days before consummation, so closing must move.
Traps. Swapping the three-day CD waiting period with the four-day revised-LE rule; assuming disclosure cures a Section 8 kickback; applying TRID to HELOCs and reverse mortgages, both exempt.