Hi Everyone,

Here’s the follow up from today’s exam prep class.

There was a question about penalties under Section 8 of RESPA:

“Violations of Section 8’s anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.”

There was a request for more reading material on subprime lending. Our state adopted the AAMR guidelines and we can read about it here and here.

There was a request to read more about the age protections under ECOA.

There was a request to read about FHA 2-1 buydowns.

The three, normative moral theories are virtue/values, duty, and Utilitarianism (also known as consequentialism.) Some of you have had an ethics class from me in the past and you’ll remember these theories from the class.  You can read more about them here.

There was a question about how to calculate an “interest only” mortgage payment.  The easy formula is to just go with per-diem (day) interest:

Per diem interest is calculated as follows: Principal loan amount x rate divided by 365. Now that you have the daily interest you can go backwards and multiply that number by 365. Divide by 12 to get the monthly interest only payment.

and here is your answer from the FBI regarding the penalties and fines for mortgage fraud. You will see this on the exam! copy/paste right from the FBI.

There was a request for a link to HUDs FAQ handbook on RESPA and the changes to the new GFE.  This handbook would make an excellent source of questions if I was a federal regulator writing your test questions.  Granted, some of these Q&As have more to do with escrow and the HUD -1.  Scroll through the handbook as you’re studying, especially if you need help with RESPA.

….and here’s a link to the FTC’s Red Flags Rules.