NMLS SAFE Exam Study Guide

NMLS SAFE Exam Study Guide Regulation Z - ANSWER-Enforced by Consumer Financial Protection Bureau (CFPB), covers the Consumer Protection Act and the Truth in Lending Act (TILA) Consumer Protection Act - ANSWER-Disclosures of terms of credit Truth in Lending Act (TILA) - ANSWER-Enforced by the Federal Reserve System, must contain nominal interest rates, loan points and discount points, finance charges, amount financed, annual percentage rate (APR) Nominal Interest Rate - ANSWER-Interest rate specified in the promissory note, which is the rate at which monthly payments are computed Loan points and discount points - ANSWER-Fees paid in advance to reduce nominal interest rate and are also expressed as a percentage of the loan amount, they are expressed and a percentage. Finance charge - ANSWER-Fees paid up front for the loan: Interest cost of the loan, loan origination fees, loan points and discount points, and mortgage insurance premiums Amount Financed - ANSWER-Loan amount plus any fees financed by the lender (ex UFMIP) minus any fees deducted from the loan amount such as discount points Annual Percentage Rate (APR) - ANSWER-The annual cost of credit expressed in percentage terms (the total amount of all expenses used to finance the loan) Regulation X - ANSWER-Enforced by The Consumer Financial Protection Bureau (CFPB), covers the Real Estate Settlement Procedures Act (RESPA) Real Estate Settlement Procedures Act (RESPA) - ANSWER-Allows consumers to shop for settlement services by providing extensive disclosures regarding settlement costs, prevents kickbacks and referral