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OH MLO: Federal Mortgage-Related Laws

OH MLO · Work through your exam, one topic at a time.

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Federal Mortgage-Related Laws

Federal mortgage law is cumulative: one transaction can trigger SAFE Act licensing duties, RESPA settlement-service rules, TILA disclosure and rescission rules, ECOA adverse-action rules, and HMDA data reporting. The exam asks you to identify which statute governs a fact pattern, who must act, and by when.

Core rules

  • SAFE Act: MLOs must be state-licensed or federally registered, meet education, testing, and CE requirements, and use their unique identifier on loan documents and advertising. Licensing is not authority to originate in every state without proper authority.
  • RESPA: Section 8 bans fees or things of value for referrals of settlement-service business; disclosure does not cure a kickback. Section 9 bars sellers from requiring a particular title company. Section 10 limits escrow cushions. Servicing-transfer notices are required.
  • TILA: Requires APR and finance-charge disclosure, ability-to-repay analysis, and loan-originator compensation limits. For a covered refinance or HELOC on a principal dwelling, the borrower has a 3-business-day right to rescind.
  • ECOA/Regulation B: Prohibits discrimination in credit, requires adverse-action notice generally within 30 days, and restricts requiring a spouse signature.
  • HMDA/Regulation C: Requires covered institutions to collect and report loan data; it is not a consumer disclosure.

Worked example

A loan officer agrees to pay a real estate agent $500 for each mortgage referral and discloses the payment as a marketing fee on the Loan Estimate. The payment is still a RESPA Section 8 violation because it is for a referral, not for goods or services actually performed. Disclosure does not convert a kickback into a lawful fee. If the same file is denied, ECOA adverse-action notice timing is a separate issue.

Traps

Do not confuse HMDA reporting with a borrower-facing notice. Do not treat TILA rescission as applying to a purchase-money mortgage. Do not assume disclosure cures RESPA referral fees. SAFE Act registration and state licensing are not interchangeable.