Shared Flashcard Set

Details

NMLS - WS Ethics
Ethics study items
33
Real Estate & Planning
Professional
12/17/2013

Additional Real Estate & Planning Flashcards

 


 

Cards

Term
What are YSP's referred to as?
Definition
Borrower credits and they reduce the borrower settlement charges.
Term
What is the double compensation?
How is it prohibited?
Definition
LO can only receive compensation from one source for one transaction.
Term
What is steering?
How is it prohibited?
Definition
LO cannot "steer" a borrower to a particular product in order to increase compensation.
The "Final Rule" provides safe harbor defines where an LO can offer multiple options.
Term
What are "Markups & Up Charges"?
Definition
When a settlement provider increases the charges of another settlement provider and retains the fees.
Term
What does TILA /regulation Z prohibit?
Definition
Misleading Advertisements:
Fixed rates & payments
Misleading comparisons
Misrepresentation about gov programs
Misrepresentation about gov endorsements
Use of current lenders name
Claims of debt elimination
misleading use of "counselor" for debt
Misleading foreign language Ads
Term
What is GLB AKA?
Definition
Gramm-Leach-Bliley Act
Financial modernization act
Title V
Term
What is ECOA and who does it protect?
Definition
Equal Credit Opportunity Act.
Promote availability of credit to all regardless of race, color, religion, national origin, sex, marital status, age.
Term
What does Title XIV subtitle F of Dodd Frank do?
Definition
Protect the appraiser by prohibiting:
- Coercion, bribery, any action to influence the appraiser
- Appraisers (and their company)from having a financial interest in the property
- Extension of credit by a creditor that knows there's been a violation of the prohibition on coercion or prohibition of conflicts of interest.
Term
What does the final rule protect?
Definition
2010 Interim "Final Rule" applies to "any person" performing valuation services. It forbids interference the judgement of the appraiser (or person preparing the valuation)
It prohibits:
- Coercion (no attempt to directly or indirectly influence)
- Misrepresentation (materially misrepresent value of home )
- Conflict of Interest (prohibit appraisal by owners or interested parties)
Term
What is mortgage fraud?
Definition
The material intentional misstatement, misrepresentation or omission relied upon by an underwriter, or lender to fund, purchase, or insure a loan.
Term
What are liar loans?
Definition
borrowers inflated income and enhanced info on low/no doc loans. Illegal
Term
What is predatory lending?
Definition
Real estate agents & MLO's encourage a consumer to purchase a home based on an inflated appraisal or steering him to high cost mortgage products
- Criminal action
Term
What is industry insider Fraud?
Definition
Conspiratorial actions of members of the mortgage industry to use lending transactions as a means to get funds from lenders via fraudulent loans.
Term
What are some of the tactics used by fraudsters?
Definition
-inflated appraisals
-property flipping
-Straw buyers (allow use of their PII to buy a property -fraud)
-Straw sellers (falsely claim ownership)
-Air loans (fictitious borrower obtains loan secured w/ fake property)
-ID theft (use others PII to secure loan)
-Sale or assignment of a sales contract (sell over valued contract)
-Cursory inspections (unload inflated property w/little no inspection)
Term
How can ID be verified to prevent ID theft?
Definition
Verify ID:
- verify SSN with SSA
- Credit histories consistent with applicants age
- Doc's should be clear and readable
- Co-borrowers use of nicknames not related to actual name on app
Term
How can Documents be verified to prevent Fraud?
Definition
- Compare signatures
- Verify address's
- Track chain of custody for verifications
- Look for watermarks on pay stubs, bank statements & W2's
- compare earnings to public job sites
-
Term
What items can be validated to stop fraud?
Definition
Identity
Documentation
Appraisals
Sales contract (scratch outs)
Credit report (compare CR to Application)
Common sense Test (Does it add up)
Term
What is USPAP?
Definition
The uniform Standards of Professional Appraisal Practice.
1989.
Term
What does an underwriter do?
Definition
He provides a layer of checks and balances between LO and Loan funding. Verifies that applicant and property information meets the program requirements for the requested loan.
Term
What are underwriting common red flags?
Definition
Red Flags
- Loan Application
- Credit Report
- Employment & Income
- Appraisal
Term
What Act deals with Appraisals, appraisal reviews and Appraiser communication?
Definition
HOEPA
Term
Which act is responsible for assuring borrowers receive accurate information about their credit?
Definition
Fair Credit Reporting Act
Term
What is the NMLS
Definition
The National Mortgage Licensing System & Registry
Term
What are the 3 C's of credit qualification?
Definition
capacity - refers to your ability to repay the debt
character - honesty and reliability
capital - valuable assets such as real estate with which to repay debt if income is unavailable
Term
What statement is required if an Adverse Action is received?
Definition
ECOA Notice that prohibits discrimination against credit applicants
Term
Two primary arguments about the duties of a mortgage broker revolve around weather or not ________is/are applied
Definition
law of agency
Term
With regard to fiduciary duties the borrower is the_____
and the broker is the ______
Definition
Principle
agent
Term
How are service release premiums earned?
Definition
Lenders or servicers who release their right to service a loan in exchange for a premium.
Term
What legislation regulates proper management of escrow accounts?
Definition
Regulation X
Term
What is a mortgage fraud database that seeks to ID industry insiders likely to participate in fraud schemes?
Definition
MARI - Mortgage Asset Research Institue
Term
What is the Consumer mortgage awareness group?
Definition
A website that provides info to consumers about mortgage; terminology, products and programs. It is a repository for names and contact information of mortgage proffesionals
Term
What are credit life premiums?
Definition
a practice predatory lenders use to increase profits.
Term
What is MBS
Definition
Mortgage Back Security
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