NE MLO cheat sheet

RESPA covers federally related mortgage loans and prohibits any fee, kickback, or thing of value exchanged for the referral of settlement service business (Section 8).

TILA/Reg Z rescission gives the borrower three business days to cancel a refinance or home equity loan secured by the principal dwelling; purchase-money loans carry no rescission right.

TRID timing: Loan Estimate within 3 business days after application; Closing Disclosure at least 3 business days before consummation; a revised LE is required at least 4 business days before consummation when the APR moves outside tolerance.

APR accuracy tolerance is plus or minus one-eighth of 1% for regular transactions and one-quarter of 1% for irregular transactions such as ARMs with multiple advances.

ECOA/Reg B requires a notice of action taken within 30 days of a completed application and specific, accurate reasons for adverse action.

SAFE Act minimums: 20 hours of pre-licensing education, a national test with a 75% passing score, 8 hours of annual continuing education, and criminal background and credit checks.

HMDA/Reg C requires covered lenders to collect and report loan-level data including ethnicity, race, sex, age, and pricing to detect discrimination and monitor credit needs.

The Flood Disaster Protection Act requires flood insurance for improved property in a Special Flood Hazard Area when the loan is federally related; escrow is generally required for higher-priced mortgage loans.

GLBA requires privacy notices and safeguards for nonpublic personal information; FCRA requires a permissible purpose before a credit report may be pulled.

LTV equals loan amount divided by the lesser of appraised value or purchase price; CLTV includes all liens secured by the property.

Monthly payment on an amortizing loan: P = L x [i(1+i)^n] / [(1+i)^n - 1], where i is the monthly interest rate and n is the number of payments.

DTI equals total monthly debt payments divided by gross monthly income; the housing ratio counts only principal, interest, taxes, and insurance.

Borrower-requested PMI cancellation is available at 80% LTV based on original value; automatic termination occurs at 78% LTV or the midpoint of the amortization term.

FHA loans allow 3.5% down at a 580 minimum FICO and carry a 1.75% upfront mortgage insurance premium plus an annual premium.

VA loans offer 100% financing, require a VA funding fee, and do not require monthly mortgage insurance.

On an ARM, the fully indexed rate equals index plus margin; caps limit the initial adjustment, periodic adjustments, and lifetime increase.

RESPA limits escrow cushions to one-sixth of the annual total of escrow items, roughly two months of payments.

One discount point equals 1% of the loan amount and generally lowers the note rate; origination fees are separate charges.

An application is taken when the lender receives the borrower's name, income, Social Security number, property address, estimated value, and loan amount, which triggers TRID disclosures.

The Loan Estimate must be delivered or placed in the mail within 3 business days of application and received by the borrower no later than 7 business days before consummation.

The Closing Disclosure must be received at least 3 business days before consummation; the 3-day clock restarts if the APR increases by more than one-eighth of 1%.

A rate lock must be confirmed in writing with the rate, expiration date, and cost of the lock, and changes require redisclosure.

Self-employed borrowers typically require two years of tax returns, a 4506-C for IRS transcripts, and a year-to-date profit and loss statement.

Occupancy fraud occurs when a borrower claims a primary residence for an investment property to obtain a lower rate; it is a common red flag.

Advertising must include the NMLS ID, use Equal Housing Lender where applicable, and disclose the APR whenever a rate is quoted.

Under ECOA the borrower must receive a copy of the appraisal at least 3 business days before closing unless the borrower waives the timing.

RESPA Section 8 bars any thing of value given or received in exchange for referrals of settlement service business, including marketing services agreements that function as kickbacks.

UDAAP prohibits unfair, deceptive, or abusive acts or practices in consumer financial products; proof of intent to deceive is not required.

ECOA, the Fair Housing Act, and HMDA bar discrimination based on race, color, religion, national origin, sex, familial status, disability, age, or receipt of public assistance.

Steering is directing a borrower to a loan with less favorable terms or higher cost when a better option exists and can violate fair lending law and UDAAP.

Loan flipping and equity stripping are predatory practices that repeatedly refinance a loan or lend against equity without regard to ability to repay.

Nonpublic personal information may be shared only for permissible purposes and must be safeguarded under GLBA.

A conflict of interest, such as an ownership interest in a title company, must be disclosed to the borrower and may be restricted by state law.

State MLO licenses are managed through NMLS and generally renew annually by December 31, with late fees and possible reinstatement after that date.

SAFE Act continuing education is 8 hours annually: 3 hours federal law and regulation, 2 hours ethics including fraud, 2 hours non-traditional mortgage lending, and 1 hour general.

Pre-licensing education is 20 hours: 3 hours federal law, 3 hours ethics, 2 hours non-traditional mortgage lending, and 12 hours general mortgage knowledge.

The national SAFE Act test requires a score of 75% to pass; states may add a separate state-specific test component.

State regulators may require a surety bond, minimum net worth, and a licensed branch manager for each licensed branch.

Unlicensed mortgage activity is prohibited; MLOs must display their unique NMLS identifier on business cards, websites, and advertisements.

State examinations and investigations can result in license suspension, revocation, fines, and restitution, and MLOs must respond to regulator inquiries.