Home Mortgage Disclosure Act Overview PDF

Home Mortgage Disclosure Act Overview Answers 1. What should a lender do if an applicant provides incorrect or inappropriate information about their race or ethnicity? A. Correct the information based on their knowledge. B. Report the information as provided by the applicant. C. Ignore th...

Home Mortgage Disclosure Act Overview Answers 1. What should a lender do if an applicant provides incorrect or inappropriate information about their race or ethnicity? A. Correct the information based on their knowledge. B. Report the information as provided by the applicant. C. Ignore the incorrect information and make assumptions. D. Contact the applicant for clarification. Answer: Report the information as provided by the applicant. (B) A lender should report the information as provided by the applicant, without correction. 2. How may an applicant choose to handle the reporting of their race and ethnicity? A. They can only report through a phone call. B. They must always provide this information. C. They may elect to not report it. D. They can provide false information without consequence. Answer: They may elect to not report it. (C) Applicants have the option to elect not to report their race and ethnicity. 3. When is it allowable to describe information as 'not provided by the applicant'? A. When the applicant explicitly states their race or ethnicity. B. When the application is submitted in person. C. When the application is completed via mail, internet, or telephone. D. When the lender lacks sufficient information to process the application. Answer: When the application is completed via mail, internet, or telephone. (C) It is allowable to use 'not provided by the applicant' in specific application formats like mail, internet, or telephone. 4. Which of the following information is NOT typically included in the application for a loan? A. Underwriting information including credit scores. B. MLO NMLS number. C. Loan pricing and terms details. D. Rejected application reasons for those who qualify. Answer: Rejected application reasons for those who qualify. (D) Rejected application reasons are not typically included for those that qualify; instead, such information is provided for denied applications. 5. What aspect of a loan application specifies how the applicant's race or ethnicity was collected? A. Loan disposition information. B. Detailed pricing and terms. C. MLO licensing status. D. Coding within the LAR. Answer: Coding within the LAR. (D) Coding within the LAR describes how race or ethnicity information was collected, such as through visual observation or by examining the applicant's surname. 6. What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)? A. To establish a quota system for mortgage loans. B. To prohibit discriminatory lending practices. C. To require lenders to provide loans to all applicants. D. To collect and disclose data about mortgage lending activities. Answer: To collect and disclose data about mortgage lending activities. (D) HMDA is focused on the collection and disclosure of lending data rather than prohibiting actions or establishing quotas. 7. Which agency was responsible for implementing Regulation C before the Consumer Financial Protection Bureau took over? A. Department of Housing and Urban Development B. Federal Housing Finance Agency C. Federal Reserve Board D. Office of the Comptroller of the Currency Answer: Federal Reserve Board (C) The Federal Reserve Board was the implementing body of Regulation C before the CFPB. 8. What type of properties are included in the definition of 'dwelling' under HMDA? A. Vacant land and commercial properties B. Recreational vehicles and boats C. Hotels and college dormitories D. Single-family homes and multifamily structures Answer: Single-family homes and multifamily structures (D) The definition of 'dwelling' under HMDA includes single-family homes, multifamily structures, and various types of residential properties. 9. When must lenders file the HMDA Loan Application Register (LAR)? A. By December 31 each year. B. By April 15 of the following year. C. By March 1 of the year following data collection. D. By July 21 of each year. Answer: By March 1 of the year following data collection. (C) Lenders are required to file the HMDA LAR by March 1 of the year after data collection. 10. What information is NOT required to be reported under HMDA? A. Gross income of the applicant B. Credit score of the applicant C. Ethnicity of the applicant D. Race of the applicant Answer: Credit score of the applicant (B) HMDA does not require the reporting of the credit score, focusing instead on demographic information. 11. Which of the following accurately describes the nature of data collected under HMDA? A. It requires loan application information regardless of loan closure. B. It is only collected on loans secured by primary residences. C. It excludes data from pre-approval applications. D. It includes both personal and financial history of applicants. Answer: It requires loan application information regardless of loan closure. (A) HMDA requires data on both originated and non-originated loans, including applications that did not result in closed loans. 12. Which of the following is a requirement placed upon lenders due to HMDA? A. Collecting and reporting information about loan applications. B. Creating an equal opportunity program for mortgage lending. C. Providing loans to applicants from all demographics. D. Monitoring interest rates for all loan categories. Answer: Collecting and reporting information about loan applications. (A) Lenders are required to collect and report detailed information regarding loan applications as per HMDA. 13. Which group primarily uses the data obtained through HMDA reporting? A. Lenders to create new mortgage products. B. Government agencies for investment and regulatory oversight. C. Real estate agents to assist home buyers. D. Independent auditors for tax purposes. Answer: Government agencies for investment and regulatory oversight. (B) Government agencies utilize the HMDA data to guide housing investments and to assess lending practices.