Federal Mortgage-Related Laws
What this domain tests
This domain tests whether you can apply the federal statutes and implementing regulations that govern disclosure, fair lending, privacy, and anti-kickback conduct-not merely name them.
TILA/RESPA disclosure timing
- Loan Estimate (LE): deliver or place in the mail no later than 3 business days after receipt of the application. A revised LE is permitted only on a valid changed circumstance and must be received no later than 4 business days before consummation.
- Closing Disclosure (CD): the consumer must receive it at least 3 business days before consummation. For CD timing, "business day" means all calendar days except Sundays and federal holidays.
- Right of rescission: 3 business days after consummation for covered refinances and HELOCs secured by a principal dwelling.
- RESPA Section 8: no fee, thing of value, or split charge for the referral of settlement-service business; marketing services agreements can violate the rule if payment is really for referrals.
Fair lending and adverse action
ECOA/Reg B requires notice of adverse action within 30 days of a completed application, with specific reasons or a statement of the right to request them. HMDA requires collection and reporting of applicant data, including government monitoring information. The SAFE Act requires MLO licensing and use of the unique NMLS identifier.
Worked example
An application arrives Monday. The lender mails the LE Thursday-timely, because mailing on day 3 satisfies the rule. Later, a changed circumstance triggers a revised LE that is mailed Wednesday before a Friday closing. The revision fails: the consumer must receive it 4 business days before consummation, and mailing adds presumed receipt days. The fix is to redisclose and move the closing.
Traps
- Using the CD definition of business day for LE timing.
- Collecting any fee beyond a bona fide credit-report fee before the consumer expresses intent to proceed.
- Letting loan officer pay vary with the transaction's terms or conditions.