Questions a mortgage lender should never ask
Sexual orientation. Disabilities. Family expansion plans (a lender can ask how many children you currently have and their ages, but it can't ask if you plan to have more or discriminate based on familial status) Political or religious beliefs.
Mortgage lending companies, mortgage brokers, and loan officers may be considered loan originators. The rules prohibit dual compensation and steering practices that do not benefit borrowers, as well as prohibit compensating loan originators based on the terms of a mortgage transaction.
In order to comply with HMDA, a loan originator may ask a borrower about each of the following EXCEPT what? Religion may not be asked about, since it is in no way included in government monitoring under the guidelines of the Home Mortgage Disclosure Act (HMDA).
Prohibited Payments to Loan Originators: Payments by Persons other than the Consumer. The Board's Rules prohibited any person from paying compensation to a loan originator for a particular transaction if the consumer pays the loan originator's compensation directly (dual compensation).
The rule prohibits a creditor or any other person from paying, directly or indirectly, compensation to a mortgage broker or any other loan originator that is based on a mortgage transaction's terms or conditions, except the amount of credit extended.
HOME MORTGAGE DISCLOSURE ACT. HMDA, as implemented by Regulation C, 12 C.F.R. part 1003, requires specified depository and nondepository financial institutions to collect, record, report, and disclose certain information on applications, originations, and purchases of covered loans.
Lenders are not permitted to ask any questions that would discourage an applicant. Further, government regulations prevent mortgage lenders from denying loans based on race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
Mortgage lenders are also legally allowed to ask about an applicant's ethnicity and marital or divorce status. One question a lender may ask is whether you are part of a lawsuit. Lenders are not allowed to ask if you are planning to start a family or ask about the status of your health.
In addition, the QM provisions protect members from unduly risky mortgages by prohibiting certain features such as negative amortization and interest-only periods, and loan terms longer than 30 years.
Explanation: The statement that is NOT true about the financial responsibility of a mortgage loan originator is (D) A mortgage loan originator must always have his or her own surety bond in an amount that reflects the dollar value of loans originated in the previous year.
Prohibits a loan originator from receiving compensation based upon the profitability of a transaction or pool of transactions. Simply put, a loan originator cannot receive bonus compensation based on a particular type of mortgage product.
Any questions about your race, ethnicity and gender cannot be used as a reason to approve or deny your credit application. Creditors have to provide equal information to all borrowers throughout the entire transaction.
A creditor such as a lender may ask about the number and ages of your dependents. A lender may also ask about dependent-related financial obligations or expenses. However, a lender may do so only if the creditor asks for this information without regard to sex or marital status (or any other prohibited basis).
Mortgage lenders should base their lending decisions on objective financial criteria, such as credit history, income, employment status, and debt-to-income ratio. Questions about personal characteristics, gender identity, or sexual orientation are considered invasive and unrelated to a borrower's creditworthiness.
We recommend that you avoid asking applicants about personal characteristics that are protected by law, such as race, color, religion, sex, national origin or age.
The financial exception allows a creditor to obtain and use medical information as long as the information is the "type of information routinely used in making credit edibility determination, such as information relating to debts, expenses, income, benefits, assets, collateral, or the purpose of the loan, including the ...
Final answer: Prohibited practices under the Residential Mortgage Lending Act include advertising rates and lending terms that are not actually available, conducting business with an unlicensed mortgage loan originator, and making a payment to an appraiser for the purpose of influencing his/her independent judgment.
What is the Loan Originator Rule about? The Loan Originator Rule generally regulates how compensation is paid to a loan originator in most closed-end mortgage transactions, including: Prohibiting a loan originator's compensation from being based on the terms of the transaction or a proxy for a transaction term.
However, a creditor may ask about costs related to children and dependents. Likewise, creditors also are barred from factoring certain considerations into their decisions. Your race, color, religion, national origin, sex, marital status or whether you receive public assistance.
The purpose of Regulation C is to provide the public with data that can be used to: Help determine whether credit unions are serving the housing needs of their communities; Assist public officials in distributing public-sector investments so as to attract private investment to areas where it is needed; and.
The Truth in Lending Act, or TILA, also known as regulation Z, requires lenders to disclose information about all charges and fees associated with a loan. This 1968 federal law was created to promote honesty and clarity by requiring lenders to disclose terms and costs of consumer credit.
The Real Estate Settlement Procedures Act (RESPA) provides consumers with improved disclosures of settlement costs and to reduce the costs of closing by the elimination of referral fees and kickbacks.