Federal mortgage-related laws and regulations
Federal mortgage-related laws and regulations tests the statutes and implementing regulations that shape origination: disclosure timing, fair lending, privacy, and anti-kickback rules. Expect scenario questions that turn on dates and definitions.
Core rules
- TILA/Reg Z governs closed-end credit disclosures and the APR; it also gives a three-business-day right of rescission for refinances and home equity loans secured by a principal dwelling, not for purchases.
- RESPA/Reg X prohibits Section 8 kickbacks and unearned fee splits, limits escrow cushions, and requires servicing-transfer disclosures.
- TRID integrates the Loan Estimate and Closing Disclosure: LE within three business days after application; revised LE generally four business days before consummation; CD at least three business days before consummation.
- ECOA/Reg B requires notice of action within 30 days of a completed application and specific adverse-action reasons.
- HMDA, SAFE Act, GLBA, FCRA, and flood rules add data reporting, licensing, privacy, and insurance requirements.
- ATR/QM requires verification of repayment ability and limits points and fees for QM status.
Worked example
A consumer submits a complete application on Monday. The LE must be delivered or placed in the mail by Thursday: Tuesday is day 1, Wednesday day 2, Thursday day 3. The lender may not collect fees before delivery except a bona fide credit report fee. If the loan is a refinance of the principal dwelling, rescission applies; if it is a purchase, it does not.
Traps
Counting the application day as day 1; applying the specific business-day definition, which excludes Sundays and federal holidays, to LE delivery instead of the general definition; assuming a disclosed referral fee is lawful; treating purchase loans as rescindable.