Federal Mortgage-Related Laws
Federal Mortgage-Related Laws
This domain tests the federal statutes and regulations that govern mortgage origination. Questions focus on disclosure timing, prohibited practices, fair lending, and the MLO's licensing obligations.
Core rules
- RESPA / Regulation X: Section 8 prohibits fees, kickbacks, or things of value for referrals of settlement-service business. Section 9 restricts seller-paid title insurance. Section 10 limits escrow deposits.
- TILA / Regulation Z: Requires a Loan Estimate within three business days after application and a Closing Disclosure at least three business days before consummation. It also contains ability-to-repay/qualified mortgage standards, high-cost mortgage rules, and loan originator compensation limits.
- ECOA / Regulation B: Prohibits discrimination based on protected characteristics and generally requires adverse action notices within 30 days.
- HMDA / Regulation C: Requires covered institutions to collect and report mortgage data.
- SAFE Act: Requires MLO licensing, NMLS registration, and use of the unique identifier.
Worked example
A borrower submits a complete application on Tuesday. The lender's office is open Monday-Friday. The Loan Estimate must be delivered or placed in the mail no later than Friday, counting Wednesday, Thursday, and Friday as the three business days. If the lender waits until Monday, it has missed the timing rule unless a valid changed circumstance supports a revised disclosure.
Traps
Confusing the three-business-day Loan Estimate rule with the three-business-day Closing Disclosure waiting period. Collecting fees before the borrower indicates intent to proceed, other than permitted credit report fees. Treating a disclosed referral fee as lawful. Assuming ECOA adverse action timing matches RESPA servicing notice timing.