NJ MLO cheat sheet

TILA/Reg Z requires disclosure of APR, finance charge, amount financed, and total payments before consummation; rescission applies to certain refinances and HELOCs on a principal dwelling, not to purchases.

Loan Estimate: must be delivered or mailed within 3 business days after application and received no later than 7 business days before consummation.

Closing Disclosure: consumer must receive it at least 3 business days before consummation; changes to loan terms or certain fees can require a revised CD and a new waiting period.

ECOA/Reg B prohibits discrimination based on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of rights; adverse action notice is generally required within 30 days.

HMDA/Reg C requires collection and reporting of applicant demographics, loan purpose, amount, and action taken; covered institutions report under asset and volume thresholds.

Fair Housing Act protected classes are race, color, religion, sex, national origin, familial status, and disability.

SAFE Act: MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education and 8 hours of annual continuing education, pass a test, and submit fingerprints.

BSA/AML: currency transactions over $10,000 generally require a CTR; suspicious activity may require a SAR.

GLBA privacy: financial institutions must provide initial and annual privacy notices and opt-out rights for sharing nonpublic personal information with nonaffiliates.

LTV = loan amount divided by the lesser of the sales price or appraised value, expressed as a percentage.

DTI = total monthly debt payments divided by gross monthly income; it includes the proposed housing payment plus recurring debts.

PMI: borrower-requested cancellation generally at 80% original LTV; automatic termination generally at 78% of original value based on the amortization schedule.

Points: 1 point = 1% of the loan amount; discount points reduce the interest rate, while origination points compensate the lender or broker.

PITI = principal, interest, taxes, and insurance; escrow accounts collect these payments.

ARM: fully indexed rate = index + margin; caps limit initial, periodic, and lifetime rate increases.

Fixed-rate amortization: the payment is constant; the interest portion declines and the principal portion rises over time.

Government loans: FHA is insured with mortgage insurance premiums; VA is guaranteed with no down payment for eligible veterans; USDA is for rural areas with income limits.

Lien priority is generally first to record, first in priority; subordination agreements can change priority.

For Loan Estimate purposes, an application includes borrower name, income, Social Security number, property address, estimated value, and loan amount.

Pre-qualification uses unverified information; preapproval generally involves verified credit, income, and assets.

A rate lock fixes the interest rate for a set period; the agreement should state expiration and extension or float-down terms.

An automated underwriting system evaluates credit, capacity, and collateral against investor guidelines and returns findings and conditions.

RESPA tolerance: 0% for lender-controlled fees, 10% cumulative for certain third-party fees, and unlimited tolerance for changed circumstances.

The Closing Disclosure must be received at least 3 business days before consummation; changed circumstances can require re-disclosure and a new waiting period.

Verification documents commonly include pay stubs, W-2s, tax transcripts, verification of employment, verification of deposit, and credit report.

Record retention: Regulation Z generally 2 years; Regulation B generally 25 months; HMDA generally 3 years.

The MLO must include the NMLS unique identifier on applications, solicitations, and business cards.

RESPA Section 8 prohibits giving or receiving fees, kickbacks, or things of value for referrals of settlement services.

Bona fide service exception: payment must be for actual services, reasonable in value, and not based on referral volume.

Steering is directing a borrower toward a less favorable loan for compensation; it is prohibited.

Fair lending: apply the same standards to all applicants; disparate treatment is intentional, while disparate impact arises from a neutral policy.

UDAAP prohibits unfair, deceptive, or abusive acts or practices; intent is not required for a violation.

Mortgage fraud red flags include altered documents, inflated income, straw buyers, undisclosed debt, and pressure to close quickly.

Confidentiality: nonpublic personal information such as credit reports and tax returns requires a permissible purpose or consumer authorization.

Advertising must be accurate, include the NMLS ID, avoid misleading APR or payment claims, and use the Equal Housing logo in housing ads.

The New Jersey Department of Banking and Insurance regulates mortgage bankers, brokers, correspondents, servicers, and mortgage loan originators under the Residential Mortgage Lending Act.

Licensed mortgage loan originators must be sponsored by a licensed mortgage entity and registered in NMLS; individuals cannot originate independently.

New Jersey's Home Ownership and Equity Protection Act, N.J.S.A. 46:10B-22 et seq., imposes extra limits and disclosures on high-cost home loans.

New Jersey residential foreclosure is a judicial process; the Fair Foreclosure Act requires a notice of intention at least 30 days before filing.

Mortgage priority is generally determined by recording with the county clerk; the first recorded mortgage has priority over later liens.

Residential closings in New Jersey typically involve attorneys, a title search, and title insurance.

MLO licenses renew annually through NMLS; continuing education must be completed before renewal.

NJDFI may examine licensed entities and require books and records; violations can lead to license suspension or revocation.