Real Estate and Housing: Loans, Fair Housing, and Loss Mitigation, Exams of Finance

Download Real Estate and Housing: Loans, Fair Housing, and Loss Mitigation and more Exams Finance in PDF only on Docsity!

HUD EXAM PREP 120 QUESTIONS WITH

COMPLETE SOLUTIONS

1. Types of Credit Used - answers> Student loan or credit cards only
2. FAKO scores - answers> purchase score which are educational score
3. Fair Credit Reporting Act FCRA - answers> what is in file/dispute/remove 30 days/remove bad 7 yrs./by 10 yrs./access limited/damages from violators/state rights
4. Fair and Accurate Credit Transactions Act FACTA - answers> free cars/fraud alert/truncate cc #s
5. Fair Credit Billing Act (FCBA) - answers> dispute bill error/mail 60 days/creditor 30 days acknowledge and 90 days research. billed timely manner/14 days before payment due
6. Tax Credits - answers> Earned Income Tax Credit/EITC-low/moderate income in/families. Net earnings from self-employment-income/marital status/children. Educational credit-post secondary for in/child. Child/Dependent Care Credit-work/look for work and paying a service. additional credits under 17yo.
7. predatory lending - answers> loan flipping-refi existing loan for more fees and interest

8. Chap 13 by - answers> 3-5 yr. payment plan on all/part of debt, can stop foreclosure, cure delinquent mortgage payments, reschedule secured debts other than mortgage, lower payment, retain house/car
9. Blockbusting - answers> convince/attempt person to sell/rent due to entry/neighborhood of race/color/religion/familiar/origin/disability 10.Redlining - answers> illegal practice to make residential loans due to race, neighborhood, origin, familiar, sex, color 11.Closing costs & Discount Points - answers> Closing 3-4% and Discount 1% of total loan amount 12.front end ratio / housing expense ratio - answers> monthly housing exp/gross monthly income 13.Gross Monthly Income (GMI) - answers> hourly-10/hrx35hrsx wks./12......wily 750x52wksx12=.....biwkly-1000.x26/12=....semimnth- 1200.x2=...selfemploy-average gross 70587./24= 14.back-end ratio - answers> debt exp/gross debt to income ratio 15.Affordability - answers> FE/Conv 28, FHA 31, FHAEE 33, Rent 30....BE/Conv 36(45-50), FHA 43, FHAEE 45, Rent 36 16.Max Monthly House Pym - answers> Fermi Bergin-debts

17.2nd mort/piggy back loan - answers> lower 1st mort, avoid private more ins, repairs, education 18.mort terms - answers> interest only-pay only interest for a fixed term after borrower pays principal/interest, fixed rate-interest fixed 30 yrs. or 10-15, Adjustable-interest adjust and has cap 19.Loan-to-Value Ratio - answers> LTV%=loan ball/sales price/appraised x 100 20.down payment - answers> conv-varies, FHA-580+96.5%LTV or 3.5% down, 500-579-90LTV or 10 down, VA/USDA-none 21.Mort Ins - answers> Private Morag Ins-privy loans cons/subprime, Up Front- FHA, VA, USDA, Mort Ins Premium-FHA, VA, USDA 22.Civil Rights Act of 1866 - answers> all natural citizens except American Indians 23.1896 Plessy v. Ferguson - answers> ruled that segregation was allowed, as long as the facilities were "separate but equal" 24.1933 Home Owners Loan Corporation (HOLC) - answers> Congress to avoid foreclosures during great depression/refinance mort in default 25.1948 Shelly v Kraemer - answers> deed restrictions deemed illegal

26.1954 Brown v. Board of Education - answers> This famous Supreme Court case over turned Plessy v. Ferguson. The Brown decision stated that separated but equalities were inherently unequal. 27.1962 Executive Order 11063 - answers> JFK prohibit discrimination in sale/lease/rent backed by federal funds 28.1964 Civil Rights Act - answers> This act prohibited Discrimination because of race, color, sex, religion, or national origin by employers or labor unions 29.1968 Civil Rights Act - answers> This was passed in response to MLK Jr's assassination. Called the Fair Housing Act. Prohibits discrimination in housing sales, rentals, advertising, and financing based on race, color, national origin, and religion. It also obligated federal agencies to affirmatively further fair housing. 30.1968 HUD - answers> Established Ginny Mae, to expand the availability of government-secured home loans to moderate-income families 31.1974 & 1988 - answers> 1974/sex & 1988/disability & familiar 32.2010 LGBT - answers> HUD issued a new policy that provides lesbian, gay, bisexual, and transgender individuals and families with further assistance when facing housing discrimination. The new guidance treats "gender identity discrimination" as gender discrimination. 33.Extra protection for disabled - answers> Covered multifamily dwellings available for occupancy after March 13, 1991, must be usable and

accessible for persons with disabilities including design of: doors, accessible routes, environmental controls, grab bars, and usable kitchens. 34.Section 504 of the Rehabilitation Act of 1973 - answers> Requires that housing providers that receive federal financial assistance make and pay for structural changes to facilities, if needed as a reasonable accommodation unless doing so poses an undue financial and administrative burden. 35.Assistant Animal - answers> An assistance animal is not a pet. An assistance animal works, provides assistance, or performs tasks for the person or provides emotional support that alleviates one or more identified symptoms or effects of a person's disability. Assistance animals do not have to be trained or certified, and are not limited to dogs. 36.Exemptions to the Fair Housing Act - answers> Single Family-1. Owns, sells, or rents the house 2. Owns 3 or fewer single family homes 3. Does not use a real-estate broker. Mrs. Murphy-The house or living quarter is occupied by or intended to be occupied by no more than four independent families and the owner 2. The owner has three or fewer rental units. Religious-Housing is not operated commercially 2. Housing is made available to persons of the same religion. Private Club-The housing is not open to the public 2. The housing is incidental to the primary purpose The hosing is not operated commercially. Elderly-1. Housing is designed for the elderly 2. 100% of the community is 62 or older; or 80% of the households have one resident who is 55+ 37.Real Estate Related Transaction - answers> According to the Fair Housing Act, a real estate related transaction means any of the following:

• the making or purchasing on loans or providing other financial assistance for purchasing, constructing, improving, repairing, or maintaining a dwelling

• the making or purchasing of loans or providing other financial assistance secured by residential real-estate. 38.File a Housing Complaint - answers> HUD, Nonprofit Fair Housing Organization FHIP/Fair Housing Initiatives Program-Identify government agencies that handle complaints 39.Assist aggrieved individuals in filing a complaint 40.Conduct preliminary investigations, including sending testers to properties. State/Local FHAP-Fair Housing Assistance Program-. Many states even extend additional fair housing protections that are non-existent at the federal level, such as protecting sexual orientation, gender identity, or marital status. The Fair Housing Assistance Program provides the funding to enforce these additional fair housing protections. A person may contact an FHAP to: 41.Get help with housing discrimination 42.Funds are also used by FHAP for: 43.Capacity building, administrative costs, investigative and enforcement efforts, training, and other projects. 44.Filing a Complaint - answers> Name and contact information 45.Name and contact information of the person you are filing against 46.The address of the housing involved 47.A short description of the alleged violation 48.Date(s) of the alleged violation 49.Complaint Process - answers> Complainant: a person, group, or company that files a complaint which claims that someone has violated a law. 50.Respondent: a person against whom a fair housing complaint is filed. Respondents must be identified as a specific individual, rather than an organization or group.

51.Conciliation: the attempted resolution of issues raised by a complainant, or by the investigation of such complaint, through informal negotiations involving the aggrieved person, the respondent, and the HUD secretary. 52.Conciliation Agreement: a written agreement setting terms for the resolution of the issues in conciliation. Complaint Process Key 53.Intake: intake specialist reviews the complaint to determine if it is a violation of the Fair Housing Act and within HUD's jurisdiction. 54.Complaint Filed: if the complaint meets filing criteria, an official complaint is filed. A notification is sent to the aggrieved person. A notification is also sent to the respondent within 10 days of the official complaint. The respondent may answer within 10 days. The complaint is then assigned for investigation. 55.If the complaint has to do with an organization funded by FHAP, HUD refers complaint to that agency to investigate and only takes further action if that agency does not begin proceedings within 30 days. 56.Complaint Rejected: if the intake specialist determines the complaint does not involve housing discrimination and is not within HUD's jurisdiction, the complaint cannot be accepted. Complaint Process Key Continued Investigation: HUD acts as a neutral third party to determine reasonable cause. HUD does the following: Interviews the complainant, respondent, and pertinent witnesses Collects relevant documents and/or conducts site visits, as appropriate May take depositions, issue subpoenas, and compel testimony or documents Continually offers and engages conciliation during the period between filing the complaint and the filing or dismissal of a charge. The investigation must be completed no later than 100 days after the filing of the complaint unless it is impractical to do so. Temporary or Preliminary Relief: If HUD concludes that irreparable harm is likely to occur, HUD may authorize prompt civil action. For example, stopping a sale. Conciliation: HUD attempts to achieve just resolution, obtain assurances that the respondent will remedy any violations, and take action to eliminate the violation. The choice to conciliate is completely voluntary. There are two types of conciliation: Pre-determination: takes place before all the evidence has been gathered in the investigation process Post-determination: takes place after the investigation has concluded, but prior to trying the issue in a court of law. Conciliation Agreement signed: if an agreement is reached, the

conciliation agreement is signed and the case is closed. Conciliation may include monetary relief. If the agreement is reached, the case is escalated to the Attorney General. No Conciliation Agreement Signed or Settlement: There are two situations in which the investigation process continues even after pre-determination or post-determination: No conciliation agreement is reached: The investigation continues if no agreement can be reached Resolution with settlement is made: if only the complainant and respondent reach an agreement but HUD does not approve, this is a settlement and not conciliation and HUD may initiate a new complaint based on the original issue. Investigation Concludes as a Reasonable Cause: If a reasonable cause is determined, HUD immediately issues a charge on behalf of the aggrieved person. HUD sends a copy of the charge to each respondent and aggrieved person and provides information with options such as electing to continue the process in a U.S. district court. If this option is not elected, a hearing with an administrative law judge will occur. Option to Elect the U.S District Court: When a charge is filed, a complainant, respondent, or aggrieved person may elect to have the case heard in a civil action under the U.S. district court. In absence of an election, an administrative law judge hears the case. The election must be made no later than 20 days receipt of the charge. Hearing before the U.S District Court: No later than 30 days after any party elects to go to district court, the U.S. Department of Justice commences a civil action on behalf of the aggrieved. If the court finds that a discriminatory housing practice has or is about to occur, the court can grant punitive damages, orders, or attorney's fees paid. Hearing before the HUD Administrative Law Judge: If an election is not made to go to district court, a hearing under an ALJ occurs under no later than 120 days following the issuance of the charge. Each party may appear in person. The ALJ makes a finding no later than 60 days after the end of the hearing. If the ALJ finds that the housing violation is or is about to occur, they will issue an order of relief. Within 15 days, any party can petition HUD for further review after the judge has made their decision. Private Right of Action: An aggrieved person may commence a civil action no later than two years of an alleged violation or breach of a conciliation agreement. If a conciliation agreement has been approved by HUD and has not been breached, the civil action

cannot be commenced. If the ALJ has commenced a hearing, the civil action cannot be commenced. 57.Affirmatively Furthering Fair Housing - answers> Identifying lender policies that have fair housing implications for clients Conducting educational initiatives to inform people about fair housing obligations Reviewing housing construction or rehabilitation plans 58.AFFH Rules - answers> Recipients of HUD program funds must affirmatively further fair housing in their program designs, operations, actions, and all housing or housing-related activities in their jurisdiction whether or not the housing is publicly or privately funded. There are AFFH requirements for subsidized and unsubsidized housing, for mortgage insurance programs, and for housing counseling agencies. Fund recipients have different responsibilities according to their funding plan: Consolidated Plan In the past, programs receiving funds through Super Notice of Funding Availability have been held responsible, along with Public Housing Agency Plans. However, the focus in this module is Consolidated Plans which is: a plan designed to help states and local jurisdictions to assess their affordable housing and community development needs and market conditions, and to make data-driven, location-based investment decisions. Subsidized Housing Privately owned housing whose owners agree to lease their properties to low-or moderate-income families in exchange for a subsidy from the government. Subsidies come in various forms, including individual vouchers or subsidies for all units. Unsubsidized Housing Privately owned housing rented at an affordable price. 59.AFFH Research Rules - answers> Subsidized and Unsubsidized Housing Programs: according to AFFH requirements, the obligations for these programs include: Achieving a condition in which individuals of similar income levels in the same housing market area have a like range of housing choices available to them regardless of their race, color, religion, sex,

disability, familial status, or national origin Pursue affirmative fair housing marketing policies in soliciting buyers and tenants, in determining their eligibility, and in concluding sales and rental transactions. PHAs and Consolidated Plan Programs: programs such as Community Development Block Grants, HOME Investment Partnerships, or Emergency Solutions Grants receive formula grants and must submit a Consolidated Plan. These programs have the following AFFH requirements: Conduct an Assessment of Fair Housing or AFH, to analyze challenges to fair housing choice and establish goals. Housing counseling agencies starting a new 3-5 year Consolidated plan cycle that begins before their due date for an AFH should continue to update their Analysis of Impediments. Take appropriate actions to overcome the effects of any impediments identified through the analysis. Maintain records reflecting these analyses and actions. Incorporate community participation in all stages of the process from identifying barriers to proposing solutions. AFFH Rules: the new AFFH rule, published in July 2015, sets the framework for taking meaningful action to promote fair housing. The rule is: "taking meaningful action, in addition to combating discrimination, that overcome segregation and foster inclusive communities free from barriers that restrict access based on protected characteristics." Formula Grants Formula grant programs are noncompetitive awards that participating organizations that meet certain minimum requirements are entitled to receive. These grants are administered by state and local administrations. Analysis of Impediments The AI supports fair housing planning; provides essential information to policy makers, administrative staff, housing providers, lenders, and fair housing advocated; and assists in building public support for fair housing efforts. Community Participation Soliciting views and recommendations from the public, considering the views and recommendations received and developing a process to incorporate such views in decisions and outcomes. ACTION 2: Participate in metropolitan wide fair housing planning to research impediments to fair housing and create strategies to address them Collaborate with leaders of HUD-funded programs, no matter the funding or program type. Initiate metropolitan wide area fair housing planning and efforts. Develop a marketing plan that presents a strategy designed to attract all buyers and renters of all groups. Participate in local task forces or state housing

counseling networks Work across agencies to identify potential trends, patterns, and practices Create strategies for impediments and gather data Be knowledgeable about fair housing at the state/local level and use knowledge to refer clients Gain awareness of plans and actions at the state/local level ACTION 3: Conduct marketing and outreach campaigns and maintain records Marketing and Outreach Campaigns: Provide general information about housing opportunities, conduct information campaigns, and raise awareness Identify groups of people who would benefit from the campaign Maintain records of activities which include impediments to fair housing addressed, demographic information, and the impact of such activities Examples of Marketing and Outreach Programs that Raise Awareness Educational events on fair housing rights and responsibilities Local fair housing events for advocates, renters, landlords, and real-estate professionals Informational messages on social media Cross-agency training (training that brings HUD regional offices and local offices together 60.Redlining - answers> HOLC created "residential security maps" to show which areas were safe or risky for investment. Affluent white suburbs were "blue" and deemed safe for investment and inner-city areas with minorities were "red “and deemed risky. According to Plessy v. Ferguson, this practice was legal. As a result, middle-class white citizens obtained loans that allowed them to relocate to "safe" suburbs. Meanwhile, black and brown people had difficulty obtaining loans and generally remained in decaying neighborhoods. This resulted in largely segregated housing patterns. Definition 61.the illegal practice of refusing to make residential loans or imposing more onerous terms on any loans made because of the predominant race, color, national origin, religion, sex, disability, or familial status of the residents of the neighborhood in which the property is. 62.Deed Restrictions - answers> Deed restrictions also contributed to segregated housing patterns. These are legally enforceable terms that govern the use of real estate, also known as a covenant, condition,

restriction, or restrictive covenant. Discriminatory language was often included, denying certain groups of people use of real estate. For example, a deed written in the 1940s in Massachusetts on a home that was foreclosed on in 2010 included the language, "for use of any person other than of the Caucasian race". Definition 63.Legally enforceable terms that govern the use of property. These terms are transferred with the property deed. Discriminatory deeds are illegal and unenforceable. 64.Home Buying Team - answers> Real Estate Agent/Broker, Lender/Loan officer, Underwriter-loan app/risk, Home Inspector-structure/mechanical/buyer pays. Appraiser-prop value/safety/health/buyer pays in closing costs. Closing Agent-settlement agent/title transfer/payment/can be any/escrow agent, INS Agent-home INS directly or escrow. Assessor-government/taxation. 65.Offer - answers> Initial offer letter, negotiations, earnest money 66.pre-approval/pre-qualification - answers> client receives pre-approval when a lender commits to lend a fixed loan amount based on a review of a completed loan application. This is not to be confused with "pre-qualified" in which a client simply discusses their financial history with no underwriter or commitment associated 67.Total Loan Costs - answers> affected by the basic interest rate plus the loan origination fees and discount points. Loan Origination Fees a charge by the lender to cover the costs of making the mortgage. Paid at closing, is often 1- 2% of mortgage amount. Discount Points Pre-paid interest paid at closing, equivalent to 1% of the loan amount. Borrower pays them to reduce the interest rate on the loan and get a lower payment

68.URLA Uniform Residential Loan App - answers> The key form used is the URLA, the Uniform Residential Loan Application, which is published by government-sponsored enterprises (financial entity services created by Congress. A GSE loan or mortgage refers to a mortgage owned by Fannie Mae or Freddie Mac). 69.ECOA (Equal Credit Opportunity Act) - answers> Complaint filed by FTC 70.Real Estate Settlement Procedures Act (RESPA) - answers> Federal law prohibiting certain abusive practices that increase the cost of settlement services. Home sellers cannot require homebuyers to purchase title insurance from a particular company. In addition, a person cannot give or receive anything for settlement business referrals or for services that are not performed. RESPA governs required mortgage transaction disclosures that describe closing costs, lender servicing and escrow account practices, and business relationships. Complaint-Consumer Finance Protection Bureau, or CFPB 71.TILA (Truth in Lending Act) - answers> Complaint-FTC 72.Amendment to TILA - answers> CFPB made a key amendment to TILA, called the Ability to Repay/Qualified Mortgage or ATR/QM rule. Which requires that lenders make a reasonable, good-faith determination that the consumer has a reasonable ability to repay the loan. Certain creditors, such as non-profits serving low-to-moderate income consumers are exempt from this rule. A loan is considered a Qualified Mortgage, or QM if: It does not contain certain risky features, such as interest-only payments or negative amortization The total points and fees do not exceed three percent of the total loan amount The term of the loan does not exceed 30 years. Federal law amending regulations under the Real Estate Settlement Procedures Act, or RESPA (Regulation X) and the Truth in Lending Act, or TILA (Regulation Z),

effective as of October 3, 2015. TRID, also called the Know Before You Owe rule, requires easier-to-use mortgage disclosure forms that clearly outline the terms of a mortgage to the borrower and provide detailed explanations about how the forms should be completed and used. The rule combined certain lender disclosures: The Good Faith Estimate (GFE) and the Truth-in- Lending disclosure (initial TIL) became the Loan Estimate. The HUD- Settlement Statement and the final TIL disclosure became the Closing Disclosure. A client receives her Closing Disclosure three days prior to closing. Two days later, she receives an updated Closing Disclosure with no change to her closing date. Enforced by the Consumer Finance Protection Bureau, or CFPB. 73.Loan Est/Closing Disc - answers> Loan Estimate This new form, designed to help consumers understand the key features, costs, and risks of the mortgage loan for which they are applying, must be provided to consumers no later than three business days after they submit a loan application. Key features: loan terms, costs at closing, adjustable payment table, if applicable, adjustable interest rate table, if applicable, contact information, other considerations, buyer's signature requirement Closing Disclosure This new form, designed to help consumers understand all of the costs of the transaction, must be provided to consumers at least three business days before closing. However, if the APR is inaccurate, the loan product changes, or a prepayment penalty is added, then the lender must provide new disclosures and allow an additional three business days prior to closing. Key features: Generally must contain the actual terms and costs of the transaction final loan terms, final costs at closing, cash to close, summary of transactions, additional information about the loan, final adjustable payment table, if applicable, final adjustable interest rate table, if applicable, loan calculations, other disclosures, contact information From the time of the Loan Estimate to the time of the Closing Disclosure, some costs can increase and others cannot. Cannot Increase Can Increase Up to 10% Can Increase to Any Amount • Fees paid to lender, mortgage broker, or an affiliate of either one • Fees for required service that the lender did not allow the borrower to shop separately for, when the provider is not

affiliated with the lender or mortgage broker • Transfer taxes • Required services that the borrower selects from the lender's list of providers • Government recording charges Prepaid interest, property insurance premiums, and initial escrow account deposits Fees for required services that the borrower can shop for Fees for third-party services the lender does not require 74.HOEPA - Home Ownership and Equity Protection Act - answers> Federal law enforcing special disclosure requirements and restrictions on terms for loans that meet high-cost mortgage tests. Meant to address abusive practices in refinances and closed-end home equity loans with high interest rates or high fees. Regulations issued to implement the Dodd-Frank Act effective January 10, 2014, expanded HOEPA to home equity lines of credit. Also included a requirement that consumers receive homeownership counseling before a high-cost mortgage. A loan is covered by HOEPA if: APR exceeds Treasury rates for comparable securities by 6.5% for first lien transactions; 8.5% for first-lien transactions less than $50,000 and secured by personal property (e.g., RVs, houseboats, and manufactured homes titled as personal property); or 8.5% for junior lien transactions. Total fees and points payable at or before closing exceed the larger of 5% of the loan or a fixed amount adjusted annually by the CFPB. A first-time homebuyer with damaged credit learned that she could buy a home with an adjustable- rate HOEPA mortgage. She did not know what this type of mortgage was, but she was happy because she had not qualified for other loans. Several months after she bought the home with this mortgage, she noticed a large increase in her payment. She knew her payments could change, but the lender never mentioned how much they could increase. Enforced by the Federal Trade Commission, or FTC, and by the Consumer Finance Protection Bureau, or CFPB. Required Disclosures for HOEPA loans Prohibited Actions for HOEPA Loans • A written notice that the loan will not be effective until consummation or account opening occurs. • Information on the consequences of default. • A written notice warning that borrowers could lose a residence and any money invested in it if they do not make the payments. • The APR, payment amount, and loan amount. For variable rate

loans, the lender must disclose that the rate and monthly payment may increase and the amount of the maximum monthly payment. • Negative amortization, prepayment penalties, and due-on-demand features. Balloon payments are generally banned, with specific exceptions for three circumstances: Adjusted payment schedule to accommodate seasonal income of borrower, Short-term loans (12 months or less), Creditors meet criteria for serving rural or underserved areas. • Recommending default on an existing loan to be refinanced by a high-cost mortgage. • Charging a fee to modify, defer, renew, extend, or amend a high-cost mortgage. • High late fees and pyramiding of late fees. • Fees for generation of payoff statements, with limited exceptions. • Financing points and fees (i.e., rolling them into the loan amount). However, lenders can finance closing charges excluded from the definition of points and fees, such as bona fide third-party charges. • Purposely structuring a transaction to evade HOEPA coverage. 75.homeowner insurance - answers> Structure, Loss of Use, Contents, Medical, Personal Liability-legal, Add Ones-Flood, Earthquake, Bus Meds-home bus/products, Bus Liability-babysitting 76.Earthquake Insurance - answers> What affects the cost? Price may increase if the home is a wood frame structure, an older building, or in a high-risk area. 77.Flood Insurance - answers> high-risk flood zone by FEMA (Federal Emergency Management Agency), flood insurance is required. What is included? Covers damages from flood water that comes from outside the home. 78.maintenance plan - answers> System-Household systems include appliances, windows, roofing, insulation, electric, heating, ventilation, air conditioning (HVAC), and other components. Warranty-Home warranties

offer protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner's insurance. Life Used-A previous homeowner or a home inspector may know or be able to estimate when the system was manufactured, installed, or purchased. Life Expectancy-Homeowners can refer to online resources to estimate life expectancy of household systems. Upkeep-Proactive. Estimated Costs- refurbish/energy efficient. Replacement-fix/replace on own or pay contractor. Target Replacement Date 79.Energy Efficient Mortgage-FHA - answers> energy.gov/energystar.gov 80.Home Improvement Financing - answers> Home Equity-A home equity loan provides a lump sum of money. It is often referred to as a second mortgage, because it can be obtained while you are still bound to your initial mortgage. Home improvement plan consists of a large one-time expense. • You desire to pay off your loan more quickly. • You want a fixed rate for your monthly payments. • You do not have funds available for significant closing costs. HOME EQ LOC-omen equity line of credit, or HELOC, is a line of credit from which you can borrow at any time during the draw period, up to your credit limit. Typically, the draw period is 10 years, and the repayment period lasts 15 years. • Home improvement plan consists of multiple expenses that may be paid over an extended period of time. • You want a lower interest rate. • You want a lengthy period of time to pay off the loan. • You do not have funds available for significant closing costs.FHA 203k FHA 203k loan is a loan insured by the FHA. It can provide you with an initial loan for purchasing a home as well as funding for home improvement. You would like to carry out a minor rehabilitation and/or home improvement project that will not require the involvement of consultants, engineers, and/or architects. • Your proposed projects meet the Streamlined 203k qualifications set forth by the FHA. • You intend to use one or more contractors to complete the repairs or can prove that you have the necessary expertise and experience to perform the work. • You can complete the project within six months. TITLE 1 -Title 1 loans, insured by

the FHA, may be used for alterations, repairs, and site improvements on single family homes and for alterations and repairs on multifamily homes. Title 1 loans can be used in connection with a 203k Rehabilitation Mortgage. You are the owner of the property to be improved, the person leasing the property (provided that the lease will extend at least six months beyond the date when the loan must be repaid), or someone purchasing the property under a land installment contract. • You want a fixed interest rate. • Loan of up to $25,000 for improving a single-family home or for improving or building a nonresidential structure. • Loan of up to $12, per family unit, not to exceed a total of $60,000, for improving a multifamily structure. ENERGY EFFICIENT-An Energy Efficient Mortgage, or EEM, assists individuals to purchase an energy efficient home or refinance a home to make energy efficient improvements. The loan is initially underwritten as if the energy package did not exist. Can be financed through the FHA or VA.You would like to obtain a larger loan amount than you qualify for in order to make energy efficient improvements to your home. • You desire to buy a better and more energy efficient home. • You, the home, and the improvements meet the qualifications as set forth by the FHA or other financing body. CASH OUT REFI-Cash-out refinancing can leverage a borrower's home equity to provide additional cash funding for improvements to the home. Risky option as you may end up owing more than the home is worth. 81.Refi & Selling - answers> Refinancing may be a viable option if: the initial mortgage interest rates are considerably higher than the current rates, mortgage insurance is required and the client owes less than 80% of the home's value, the client wants to switch from an adjustable-rate loan to a fixed-rate loan. Delinquency will disqualify the client for refinancing. There are closing costs and fees associated with refinancing and an appraisal might be required unless the client has an FHA mortgage and is applying for an FHA streamline refinance which does not require qualifying credit or an appraisal. Cred History, Debt to Income Ratio exceeds 36%, Loan to Value- exceeds 80%

82.Good Faith Estimate/TIL - answers> Loan Estimate 83.HUD-1 Settlement Statement - answers> Closing Disclosure 84.What loss mitigation option for home retention through the FHA is offered to borrowers who are ineligible for other options - answers> FHA Hamp 85.Negative Amortization - answers> Occurs when the loan payment is not sufficient to cover the interest cost and results in the unpaid interest being added to the original balance, causing the loan amount to increase. 86.Dual Tracking - answers> The term used when servicers move forward on a foreclosure at the same time the mortgage servicer is working with a borrower on a workout plan. 87.Hardest Hit Fund - answers> Established by the U.S. Department of the Treasury in 2010. Provides $7.6 billion to the District of Columbia and 18 states hardest hit by the foreclosure crisis. In February 2016, an additional $2 billion as allocated as part of the Consolidated Appropriations Act. Administered by each state's Housing Finance Agency, most funds were allocated to help unemployed borrowers or underwater borrowers. HHF funds end in 2020. 88.Making Home Affordable Program - answers> Created in 2009 by the Treasury and the Department of Housing and Urban Development (HUD) to help homeowners avoid foreclosure, stabilize the country's housing market, and improve the nation's economy. Standardized process for requesting mortgage workouts Programs included loan modifications, loan refinancing,

mortgage assistance for the unemployed, and financial assistance to transition out of the home Most programs expired December 2016 89.National Mortgage settlements - answers> Created in 2012 Reached between Attorneys General of 49 states and five servicers—Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase, and Wells Fargo— that were involved in deceptive lending and foreclosure practices, like robot- signing, and were not verifying application information. Subsequent settlements were reached with SunTrust, Owen, and HSBC. Required servicers to appoint a single point of contact for loss mitigation efforts, have adequate trained staff, honor modification agreements made by a prior servicer, maintain better communication with borrowers, comply with the Servicemembers Civil Relief Act, improve standards for executing foreclosure documents, remove improper fees, and end dual tracking. Provided $50 billion in direct payments to signing states and the federal government, as well as relief to distressed borrowers, though many claims deadlines have since passed. Resulted in loan modifications for struggling homeowners, refinancing for underwater homeowners, and payouts for homeowners who lost their homes. Many states used the funds received to create their own programs for homeowners facing foreclosure 90.Mass Any Gen Home Corps Prig - answers> Created with NMS funds paid to Massachusetts to create foreclosure mitigation programs. This led to the creation of the Home Corps program with the goal of mitigating future impacts of the foreclosure by providing advocacy to distressed borrowers. The program has established a hotline staffed by loan modification experts and created a Twitter account to provide information, and it also launched a series of housing grant initiatives including funding for legal representation and identification of neighborhoods hardest hit by foreclosure. Examples are: 1. Borrower Representation Initiative: Massachusetts Legal Assistance Corporation (MLAC) and the National Consumer Law Center (NCLC) were awarded $6 million to fund 14 locations statewide staffed by 19 attorneys dedicated to foreclosure-related cases and delivered direct legal

representation to homeowners facing foreclosure or eviction. 2. Loan Modification Initiative: Staffed by a statewide team of skilled Loan Modification Specialists, the Initiative offers direct loan modification advocacy to distressed Massachusetts borrowers, in order to help many residents avoid unnecessary foreclosure. 3. Distressed Properties Identification and Revitalization Grant: Provided 21 towns funding to identify and prioritize a list of real estate owned properties and to ensure that individual property owners comply with state and local ordinances to bring properties into a state of good repair. 91.Mort Serv Guidelines - answers> Servicer Contact & Personnel-Servicer must make efforts to contact the borrower after 36 days of delinquency. • Servicer must send borrower written notice to contact the servicer before 45 days of delinquency and provide information about housing counselors. Subsequent mortgage statements must include: information on risks of delinquency, updates about any foreclosure proceedings, contact information for housing counseling agencies, information about loss mitigation programs. • Servicers must assign personnel to be available to help delinquent borrowers. These employees must provide accurate information about loss mitigation or workout options and explain how a borrower can apply, locate information about and communicate the status of a loss mitigation application. • Servicers must notify borrowers promptly and in writing that a loss mitigation application is complete. 92.Mort Svc Guidelines - answers> Foreclosure Timeline Restrictions-Servicers cannot make a first notice or filing for foreclosure until the borrower is more than 120 days delinquent. • After 120 days, servicers cannot begin the foreclosure process while a borrower is being evaluated for a loss mitigation plan. For completed loss mitigation applications, additional restrictions and timelines apply for required evaluation and appeal periods.

93.Mort Svc Guidelines - answers> Servicer Eval & Expectations-• Servicers must be able to tell homeowners the circumstances under which the servicer may make a referral to foreclosure. • Servicers are required to evaluate the borrower for all the foreclosure avoidance options for which the borrower may qualify, though they are not required to offer any specific loss mitigation options. • Servicers must give specific reasons for denying a loan modification option. 94.Mort Serv Guidelines - answers> Consumer Complaints-Consumers should call (855) 411-2372 (CFPB) or visit www.consumerfinance.gov/complaint. Regardless of which foreclosure process a state utilizes, under CFPB regulations, servicers cannot initiate foreclosure proceedings until borrowers have received proper notice about delinquency and have been provided sufficient time to pursue foreclosure alternative options, a period not less than 120 days. Even after 120 days, servicers cannot begin foreclosure if any options are still under consideration. 95.Mort Svc Guidelines - answers> For FHA borrowers determined to be at risk for default, telephone contact attempts must begin by day 10. For other FHA borrowers, servicers must begin telephone contact attempts by day 17. Written communications for all borrowers must begin by day 20. 96.Non-Judicial Foreclosure - answers> The courts are not involved, communication occurs between the homeowner and the servicer or the servicer's representative In most states, the servicer issues a Notice of Default, or NOD. Though the timeline on this notice previously varied widely by state, CFPB guidelines specify that this notice can only take place after 120 days of delinquency. If the delinquency is not cured, the homeowner receives a Notice of Sale, or NOS, typically 90 days after the NOD. The NOS gives the homeowner a certain number of days before the house will be sold, which varies by state. The homeowner typically has five to ten days before the sale date to cure the delinquency (i.e., pay all past

due amounts, including arrearages, fees, and interest accrued). Once the period for reinstatement has ended, the servicer can schedule the sale. Very rarely will a servicer stop a foreclosure sale at this point. 97.Loss Mitigation Process - answers> Determine reason client is behind on mortgage payments. 2. Determine if homeowner wants to remain in the home (retention) or transition out of the home (disposition). 3. Determine the type of mortgage (e.g., conventional, FHA, VA, or USDA; if it is owned by Fannie Mae or Freddie Mac) to determine options and processes available through the servicer. 4. Gather required financial documentation and determine affordability. 5. Complete the necessary forms to request the loss mitigation option. 6. Submit the request to the servicer. 7. Respond to additional requests for information. 8. If request is approved, discuss if it is affordable. If it is denied, determine why. Escalate, if necessary. 98.Loss Mitigation Process - answers> It is critical to determine what type of loan the client has and then determine if it was sold to Fannie Mae or Freddie Mac as there are loss mitigation options available specific to which type of loan it is. Find out if the loan is owned by Fannie Mae or Freddie Mac by going to knowyouroptions.com/loan lookup or freddiemac.com/my mortgage. Options for retention and disposition will vary greatly based on the owner of the loan. Eligibly for retention can be restricted based on unemployment, primary residency requirements, bankruptcy, or imminent default. Surplus income is also taken into consideration to determine when the debt can be cured. Housing counselors may consider calculating the housing ratios in order to provide adequate advice to the borrower. Conventional Mortgage 99.A private sector loan typically issued to borrowers with high credit ratings. Excludes subprime loans or mortgages insured by the U.S. government. GSE loan or mortgage

100. A government-sponsored enterprise, or GSE, is a financial services entity created by Congress. A GSE loan or mortgage refers to a mortgage
101. owned by Fannie Mae or Freddie Mac. Imminent Default

102. When default is reasonably foreseeable. Typically applies to borrowers who are either current or less than 60 days delinquent. With FHA mortgages, borrowers facing imminent default are defined as those who are current or less than 30 days past due on the mortgage obligation and are experiencing a hardship that prevents them from making the next payment. Front-End Ratio
103. A rate that calculates a borrower's housing-related obligations as a percentage of gross monthly income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a housing ratio. Back-End Ratio
104. A rate that calculates a borrower's total monthly debt, including housing and other debt obligations, as a percentage of gross monthly income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a debt-to-income ratio. Surplus Income
105. The amount of income left over after all financial obligations are met. Calculated by subtracting expenses from net income.
106. GSE Loan or Mortgage - answers> government-sponsored enterprise, or GSE, is a financial services entity created by Congress. A GSE loan or mortgage refers to a mortgage
107. owned by Fannie Mae or Freddie Mac.
108. Imminent default - answers> When default is reasonably foreseeable. Typically applies to borrowers who are either current or less than 60 days delinquent. With FHA mortgages, borrowers facing imminent default are defined as those who are current or less than 30 days past due on the mortgage obligation and are experiencing a hardship that prevents them from making the next payment.
109. Payment Assistance Prog - answers> Federal, state, and local funds have been allocated to programs that help homeowners facing foreclosure. These programs include options such as modification, forbearance, and principal reduction. If you are unaware of programs in your area, consider

these tips: • Check with your state's Housing Finance Agency, Department of Community Affairs, Attorney General's Office, or Housing Department to obtain information on available state programs. • Communicate with local housing departments who may have similar programs that offer less financial support but have less stringent qualifications. • Gather information about programs offered by servicers in your area from individual financial institutions, roundtables, or information sessions.

110. Home Affordable Modification Program (HAMP) - answers> Purpose: To assist homeowners who are struggling to make mortgage payments Benefit: Lowered mortgage payments to make them more affordable and sustainable in the long-term Status: Expired Next Phase: Most HAMP modifications offered greatly reduced interest rates for five years, then increased the interest rate at one percent or less for three or four years, though rates were not to exceed the market rate. Some homeowners with a HAMP modification may need help handling higher mortgage payments due to the reset of the interest rate after five years.
111. Fan Mae/Fred Mac Flex Mod - answers> Overview: The Flex Modification leverages Fannie Mae and Freddie Mac Standard and Streamlined Modifications. Modifications can be applied to all mortgage loan delinquencies and to mortgage loans determined to be in imminent default. Purpose: To provide an easier, flexible way of helping more borrowers qualify for a loan modification in a changing housing environment Benefit: Provides eligible borrowers an option to resolve delinquency and sustain homeownership by targeting a 20% payment reduction. Key Eligibility: Borrower must: Be 60 days or more delinquent and occupy the property as a primary resident or Be current or less than 60 days delinquent, occupy the property as a primary resident, and be in imminent default AND Submit a Borrower Response Package (BRS), which includes: Completed and signed Form 710, Uniform Borrower Assistance Form, Eligible hardship documentation, Documentation to verify stable income to support a monthly payment, Imminent default hardship