PA MLO cheat sheet

RESPA Section 8 bars giving or accepting any fee, kickback, or thing of value for the referral of settlement service business on a federally related mortgage loan; payment must be for goods or services actually performed, at fair market value, and not duplicative.

Regulation X/TRID: the Loan Estimate must be delivered or mailed within 3 business days of application and received no later than 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

TRID tolerance buckets: 0% for lender origination charges, fees for services the consumer cannot shop for, and transfer taxes; 10% cumulative for recording fees and lender-required services the consumer can shop for but does not; unlimited for prepaids, escrow, and borrower-selected providers.

TILA right of rescission: 3 business days after consummation to cancel a refinance or HELOC secured by the borrower's principal residence; purchase-money loans, business-purpose loans, and second homes are not rescindable.

ECOA/Regulation B: adverse action notice within 30 days of a completed application (or of a counteroffer the applicant does not accept), stating the action taken and the reasons or how to request them.

HMDA/Regulation C: covered lenders record and report application, origination, and purchase data by loan type, purpose, occupancy, race, ethnicity, sex, age, and income to the public LAR.

Ability-to-Repay (Regulation Z): the creditor must consider eight factors - income/assets, employment status, monthly payment on the covered loan, payments on simultaneous loans, other mortgage-related obligations, debts/DTI, credit history, and residual income.

Flood Disaster Protection Act: improved property in a Special Flood Hazard Area on a federally related loan requires flood insurance of at least the lesser of the outstanding balance or the maximum NFIP coverage; HPMLs also require escrow of premiums.

HOEPA high-cost triggers include total points and fees exceeding 5% of the total loan amount for loans at or above the adjusted threshold (a lesser percentage or dollar cap for smaller loans), a high APR test, and a prepayment-penalty test.

LTV = loan amount ÷ the lesser of the sales price or appraised value; CLTV = the sum of all liens on the property ÷ appraised value, used when a second lien or piggyback structure exists.

Monthly P&I = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the note rate divided by 12 and n is the amortization term in months; taxes, insurance, and MI are added to get PITI.

FHA: 3.5% minimum down payment at a 580 or higher decision score, upfront mortgage insurance premium of 1.75% of the base loan amount (financed), and annual MIP paid monthly based on term and LTV.

VA: 0% down for full-entitlement eligible veterans; a funding fee that varies by down payment and first versus subsequent use, waived for veterans with a service-connected disability; no monthly mortgage insurance.

USDA Rural Development: 100% financing to income-eligible borrowers in eligible rural areas, with a guaranteed upfront fee financed into the loan plus an annual fee.

The conforming loan limit is the maximum loan amount sellable to Fannie Mae or Freddie Mac, set annually by FHFA and varied by county; loans above the limit are non-conforming (jumbo).

ARM structure: fully indexed rate = index + margin; caps are quoted as initial adjustment, periodic adjustment, and lifetime cap; a teaser or discounted start rate is below the fully indexed rate.

Borrower-paid PMI on a conforming first lien must terminate automatically at 78% LTV on the original amortization schedule, and the borrower may request cancellation at 80% LTV with good payment history.

Six pieces of information constitute an application under TRID: borrower name, Social Security number, income, property address, estimated property value, and loan amount; the Loan Estimate is then due within 3 business days.

Core documents: Form 1003 Uniform Residential Loan Application, Form 1008 Uniform Underwriting and Transmittal Summary, Form 1004 URAR appraisal, credit report, income and asset documentation, and title commitment.

Self-employed income is documented with 2 years of business and personal tax returns; qualifying income is derived from Schedule C, K-1s, and Form 1120-S/1065 analysis, adding back non-cash deductions such as depreciation.

Credit: each borrower's representative score is the middle of three bureau scores; when two or more borrowers apply, the lower (not average) representative score determines pricing and eligibility.

Rate lock: a commitment holding a specified rate for a set period; the lock must extend past the expected closing date, and a delay beyond the lock may trigger an extension fee or repricing to market.

Appraiser independence prohibits the MLO from selecting, influencing, or compensating the appraiser; the applicant must receive a copy of the appraisal promptly and no later than 3 business days before consummation.

Fraud red flags include occupancy misrepresentation (primary-residence claim for a rental intent), straw buyers, altered or typed W-2s and bank statements, undisclosed debt, silent second liens, and value inflation through inflated comparables.

Pre-closing review: compare the final Closing Disclosure line by line against the Loan Estimate, refund any tolerance violation at consummation, and confirm that changed circumstances were documented when disclosures were re-issued.

RESPA Section 8 and state law prohibit undisclosed compensation; a marketing services agreement is permissible only when it pays fair market value for actual, independently verifiable services and not for referral volume.

Fair lending distinguishes disparate treatment (intentional differential treatment of a protected class) from disparate impact (a facially neutral policy with a disproportionately adverse effect).

Prohibited practices include steering a borrower to a costlier or riskier product than they qualify for, redlining by geography, discouraging applicants, and pressuring borrowers into unsuitable terms.

The Fair Housing Act prohibits discrimination based on race, color, religion, sex (including sexual orientation and gender identity), national origin, familial status, and disability.

GLBA obligations: deliver privacy notices, safeguard nonpublic personal information, and do not disclose it to third parties without authorization or a permitted exception.

Fraud reporting: a financial institution files a Suspicious Activity Report with FinCEN; the MLO must not disclose or 'tip off' the subject of the report.

Conflicts of interest must be disclosed and managed; the MLO owes good faith and fair dealing, must not accept undisclosed gifts or compensation, and must never submit documentation they know to be altered or false.

SAFE Act pre-licensing: at least 20 hours of education, including 3 hours of federal law and regulation, 3 hours of ethics (including fraud and consumer protection), 2 hours of non-traditional mortgage lending standards, and the remainder per state requirement.

Annual continuing education: at least 8 hours, including 3 hours of federal law and regulation, 2 hours of ethics, 2 hours of non-traditional mortgage lending, and the remaining hours per state requirement; completed by December 31.

Testing: the NMLS national test with Uniform State Content, plus a state-specific test component where required; the passing scaled score is 75.

Licensure follows the consumer: an MLO must hold a license in each state where the borrower's property is located, and the NMLS unique ID must appear on advertising where state law requires.

Annual renewal runs November 1 through December 31 in NMLS; if education or renewal is not completed, the license lapses and the individual may not originate until reinstated.

Temporary Authority to Operate allows an eligible MLO moving to a new state to originate for up to 120 days while the new application is pending, provided the prior state license is in good standing.

Licensure prerequisites include FBI criminal background check, authorization for a credit report, and disclosure of administrative or regulatory actions; certain felonies are disqualifying for a defined period.

NMLS Consumer Access is a free public database where consumers verify license status, employment history, regulatory actions, and complaints filed against an MLO or company.