Sec 1-Page 89

A lender refinances a borrower’s existing high-cost mortgage into another high-cost mortgage only six months after the original transaction closed.

Under what circumstance may this refinancing generally be permitted?

A creditor originates a high-cost mortgage loan and evaluates whether the borrower satisfies underwriting standards required under federal Ability-to-Repay rules.

Which statement is correct?

A borrower submits an application for a high-cost mortgage loan.

When must the list of HUD-approved counseling agencies generally be provided?

A lender prepares a list of HUD-approved counseling agencies for a borrower applying for a high-cost mortgage loan.

Which item must be included on the list?

A compliance auditor reviews a lender’s counseling agency disclosure provided to a borrower during the mortgage application process.

Which information must appear on the counseling agency list?

A lender provides a borrower with a list of HUD-approved counseling agencies but omits all internet contact information from the disclosure.

Which required information was missing?

A mortgage company provides a borrower with a list of HUD-approved counseling agencies but fails to identify the type of assistance offered by each agency.

Which required disclosure item was omitted?

A loan originator provides a borrower with a HUD-approved counseling agency list but never obtains proof that the borrower received the disclosure.

What documentation requirement applies?

At least three business days prior to closing, a lender provides a borrower with a notice warning that failure to meet loan obligations could result in loss of the home.

Why is this notice required?