Deck 15: Government Regulation of Real Estate Closings

Question 1

Violations of RESPA can impose both civil and criminal penalties.

Answer 1

True

Question 2

A loan made on a shopping center by a federal bank is subject to RESPA.

Answer 2

False

Question 3

A commercial loan secured by a borrower's home requires Truth-in-Lending disclosures.

Answer 3

False

Question 4

The cost of credit in a dollar amount is known as the amount financed on a Truth-in-Lending
Disclosure Statement.

Question 5

The Truth-in-Lending Act places limitations on the amount of money a lender can escrow for taxes and insurance.

Question 6

A commercial loan secured by a shopping center is subject to Truth-in-Lending disclosures.

Question 7

The cost of credit in a dollar amount is known as the finance charge on a Truth -in-Lending
Disclosure Statement.

Question 8

A loan to a corporation is not subject to Truth-in-Lending.

Question 9

The term amount financed on a Truth-in-Lending Disclosure Statement includes the loan amount less prepaid finance charges.

Question 10

Unearned fees are prohibited under RESPA.

Question 11

Truth-in-Lending disclosures must be made within three days after the closing of the loan.

Question 12

The cost of credit as a yearly rate is known as the amount financed.

Question 13

Truth-in-Lending disclosures must be made prior to the closing of the loan.

Question 14

Kickbacks of less than $500 are permitted under RESPA.

Question 15

Under RESPA a seller may require a certain title insurance company.

Question 16

A loan to finance the purchase or transfer of 25 or more acres is exempt fro m RESPA.

Question 17

RESPA places limitations on the amount of money a lender can escrow for taxes and insurance.

Question 18

The Uniform Settlement Statement (HUD-1) is required by the federal Truth-in-Lending Act.

Question 19

A loan to a corporation is subject to Truth-in-Lending.

Question 20

The Uniform Settlement Statement (HUD-1) is required by RESPA.

Question 21

An ARM disclosure must be made within three business days after a variable interest rate loan is closed.

Question 22

An adjustment notice under the ARM disclosure regulations must be sent at least once each year during which an interest rate adjustment is made.

Question 23

Truth-in-Lending Disclosure Statements must be signed by both the creditor and the borrower.

Question 24

If a transaction is rescinded, the security interest becomes void as of the time of rescission.

Question 25

ARM disclosures must be made at the time an application form is provided to a consumer or before the consumer pays a nonrefundable fee for the loan, whichever is earlier.

Question 26

The total number of payments to be made must be disclosed on a Truth-in-Lending Disclosure
Statement.

Question 27

A loan, secured by a shopping center, which has a variable rate of interest is subject to the
ARM disclosure requirements.

Question 28

The period to rescind a rescindable transaction is five business days.

Question 29

Truth-in-Lending provides that a creditor must only give one copy of the notice of right to rescind to each consumer who is entitled to rescind the transaction.

Question 30

RESPA provides for a right of rescission on certain loans.

Question 31

A bank cannot use its own prime lending rate as an index for the adjustment in interest r ate.

Question 32

A variable rate that is tied to an index must be readily available and verifiable by the consumer.

Question 33

Loan discount points would be considered prepaid finance charges.

Question 34

A creditor must give four copies of the notice of right to rescind to a husband and wife whose home is being secured by a loan.

Question 35

Truth-in-Lending provides a right of rescission to a consumer when their principal dwelling is encumbered by a loan.

Question 36

The cost of credit as a yearly rate is known as the annual percentage rate.

Question 37

Under no circumstances may a consumer waive the right to rescind a rescindable transaction.

Question 38

The period to rescind a rescindable transaction is three business days.

Question 39

A creditor must disclose on a Truth-in-Lending Disclosure Statement any charges imposed for late payments.

Question 40

On a loan secured by a principal residence of a husband and wife, both would have to agree to rescind the transaction.

Question 41

HOEPA permits a lender to charge a 5% fee in the event the loan is paid in full ahead of schedule.

Question 42

HOEPA regulates high interest-rate residential loans.

Question 43

HOEPA prohibits any penalty or excess charge assessed against a borrower who pays the loan in full ahead of schedule.

Question 44

HOEPA regulates subprime commercial lending.