Federal Mortgage-Related Laws
Federal Mortgage-Related Laws
This domain tests how well you know the federal statutes and regulations that shape a mortgage application from first disclosure to post-closing records. Questions are usually scenario-based: a fact pattern asks which notice applies, when it must be delivered, or what conduct is prohibited. You need statute names, regulation letters, timing rules, and the regulator’s purpose-not just definitions.
The core map
- TILA/Reg Z: APR and finance charge disclosure; right of rescission on refinances and HELOCs; ability-to-repay/qualified mortgage standards; loan originator compensation limits.
- RESPA/Reg X: Good Faith Estimate replaced by Loan Estimate; Closing Disclosure; escrow account rules; Section 8 anti-kickback prohibition.
- ECOA/Reg B: adverse action notices, appraisal copy, spousal signature limits, prohibition on discrimination.
- HMDA/Reg C: collect and report application, borrower, and pricing data.
- SAFE Act: state licensing through NMLS and unique identifier.
- Fair Housing Act: protected classes in housing-related transactions.
- FCRA and GLBA: permissible purpose for credit reports; privacy notices and safeguards.
- Flood Disaster Protection Act: flood determination, notice, and insurance when collateral is in a special flood hazard area.
Worked example
A consumer submits a complete application on Monday. The Loan Estimate must be delivered or placed in the mail no later than three business days after application-Thursday, assuming no intervening federal holiday. If the loan is a refinance, the borrower also gets a three-business-day right of rescission after consummation. For a Friday closing, the Closing Disclosure must be received by Tuesday, because the three-business-day waiting period counts Wednesday, Thursday, and Friday.
Traps that cost marks
- Treating “business day” as one universal definition; Reg Z uses different definitions for the Loan Estimate, Closing Disclosure, and rescission.
- Confusing a revised Loan Estimate with a Closing Disclosure.
- Assuming Section 8 bans only cash kickbacks; it also covers things of value for referrals.
- Missing that ECOA adverse action notice generally is due within 30 days after a completed application.