#1
Which regulatory body oversees mortgage lenders in the United States?
Consumer Financial Protection Bureau (CFPB)
ExplanationCFPB ensures regulatory compliance and consumer protection in mortgage lending.
#2
In the context of mortgages, what does PMI stand for?
Private Mortgage Insurance
ExplanationPMI protects lenders against borrower default.
#3
What is the role of the Federal Housing Administration (FHA) in the mortgage industry?
To provide mortgage insurance and promote homeownership
ExplanationFHA facilitates access to homeownership by providing mortgage insurance.
#4
What does the acronym CFPB stand for in the context of mortgage regulations?
Consumer Financial Protection Bureau
ExplanationCFPB oversees mortgage regulations and consumer protection.
#5
What is the purpose of the Truth in Lending Act (TILA) in mortgage transactions?
To ensure fair lending practices and transparency
ExplanationTILA mandates transparency and fairness in mortgage lending.
#6
Which of the following is a key component of the Home Mortgage Disclosure Act (HMDA)?
Requiring lenders to disclose information about home loan applicants
ExplanationHMDA mandates disclosure of mortgage applicant data to promote fair lending.
#7
What does the term 'amortization' refer to in the context of mortgages?
The gradual repayment of a mortgage loan through scheduled payments
ExplanationAmortization refers to the systematic repayment of mortgage principal and interest.
#8
Which federal law prohibits discrimination in housing and mortgage lending based on race, color, religion, sex, or national origin?
Fair Housing Act
ExplanationFair Housing Act prohibits discrimination in housing and lending.
#9
What is the purpose of the Escrow Account in a mortgage transaction?
To ensure payment of property taxes and insurance
ExplanationEscrow accounts ensure timely payment of taxes and insurance premiums.
#10
What does the term 'Loan-to-Value (LTV)' ratio represent in mortgage lending?
The ratio of the loan amount to the appraised value of the property
ExplanationLTV ratio indicates the percentage of the property's value financed by the loan.
#11
What is the primary purpose of the Qualified Mortgage (QM) rule?
To ensure borrowers have the ability to repay their loans
ExplanationQM ensures borrowers can afford mortgage payments.
#12
What is the significance of the Consumer Financial Protection Bureau (CFPB) in relation to mortgage regulations?
It enforces fair lending practices and protects consumers in financial transactions, including mortgages
ExplanationCFPB safeguards consumers and ensures fair practices in mortgage transactions.
#13
What is the purpose of the Homeowners Protection Act (HPA)?
To limit the requirement of private mortgage insurance (PMI)
ExplanationHPA regulates the cancellation of PMI to protect homeowners.
#14
In the mortgage application process, what is a prepayment penalty?
A fee imposed on borrowers for paying off their mortgage before a specified date
ExplanationPrepayment penalty is a fee for early mortgage repayment.
#15
What is the primary purpose of the Dodd-Frank Wall Street Reform and Consumer Protection Act in relation to mortgages?
To ensure fair lending practices and protect consumers
ExplanationDodd-Frank Act aims to prevent predatory lending and protect mortgage consumers.
#16
Which federal law requires lenders to provide borrowers with a Loan Estimate and a Closing Disclosure during the mortgage application process?
Real Estate Settlement Procedures Act (RESPA)
ExplanationRESPA mandates disclosure of loan terms to borrowers.