In Harmonize, write a brief summary of the textbook (5 paragraphs) Chapters 5 and 6 to include the following paragraphs with headings: an overview, 3 key concepts, and a summary. Each “key concept” must include the textbook page numbers. Each paragraph needs a minimum of 3 sentences.  Use the template format provided below.  Refer to the model assignment (sample) following the template.
After writing your discussion, you must reply to at least 2 other student discussions with feedback of at least 50 words.  This is your “peer engagement” component of your grade.  NOTE: Spelling and grammar are important, so please spell-check and read your work out loud to catch and correct any errors prior to submitting.
The topic of Chapter 1 is an introduction to real estate principles.  This chapter covers four important concepts for the real estate student.  First, the real estate licensing in California is discussed, along with the real estate market.  Second, the historical influence of real property is examined.  Third, the difference between real property and personal property is spelled out clearly.  And last, the chapter concludes by analyzing various methods of land description.  These concepts are important because they may be on the real estate exam for licensees.
Key Concept from Chapter 5
I learned that real estate can be a profitable professional (p. 4).  One of the reasons it can be profitable is because the compensation to agents is based on the sales price of the house.  In California, real estate values are typically high, which translates into a high commission.  The commission is always paid to the broker, but the real estate salesperson receives a portion.  Many real estate agents are using social media to promote their services.
Key Concept from Chapter 6
The second thing I learned is that property owners have a “bundle of rights” (p. 5).  It means they have control of certain things because they own the real estate.  Generally, people view it as a bundle of sticks, with each one of them being a “right” the owner has.  Their types of rights vary based on their level of ownership.  For example, homeowners have the right to possess (live in) their houses – unless they rent out the house to tenants.  In that case, the tenant now has the right to possess the house.
Key Concept from Chapter 5
The third concept I learned is the definition of real property (p. 6).  There are four things that define real property:  land, affixed to the land, appurtenant to the land, or immovable.  These items “tests” are what separates real property from personal property.  For example, a refrigerator can be moved out of the house, so it is considered personal property.  However, a fence is permanently dug into the ground so it becomes part of the real property, along with the land and the house.
Summary
This was an interesting chapter and I learned a lot about real estate.  Real estate has a long and colorful history in California.  There are several types of land description methods, which will probably be on the state real estate exam.  I know I will have to study some of the concepts further, such as the MARIA acronym of determining personal versus real property.  In addition to the knowledge of concepts, real estate involves math calculations.
Victor Valley College
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The function of education is to
teach one to think intensively
and to think critically.
Intelligence plus character –
that is the goal of true
education.
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? Reflection Summary
due by beginning
of EACH class
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Ethics, Fraud, Consumer
Protection, and Fair Lending
“Educating Generations, Building Communities”
I.
Ethics
II.
Fraud
III. Fair Lending
IV. The Real Estate Industry and Fair Lending
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Part I.
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Ethics
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“Educating Generations, Building Communities”
? Ethics is simply doing what is right
? ETHICS are the morals and values that dictate one’s choices
? Ethics is the application of the Golden Rule, do unto others as you
would have them do unto you
? Ethics is good business
? Good ethics = happy clients = referrals = more income for you
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Part II.
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Fraud
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“Educating Generations, Building Communities”
? MORTGAGE FRAUD is the intentional misrepresentation or
omission of material facts by applicants or others to improperly
influence a mortgage loan lender
? FRAUD FOR PROFIT often involves multiple loans, elaborate
schemes and the collusion of industry professionals who are
often paid for their participation
? AIR LOAN FRAUD SCHEME the property and borrower are nonexistent
? SILENT SECOND is a scheme where the down payment is actually
borrowed or carried as a second mortgage by the seller, but
never documented which gives the first mortgage lender a false
impression that the buyer is legit
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“Educating Generations, Building Communities”
? According to HUD, PROPERTY FLIPPING is a scheme in which a
recently acquired property is resold for a considerable profit with
an artificially inflated value, often as the result of collusion with
an appraiser
? Do NOT confuse the fraudulent scheme of “property flipping”
with the legitimate practice of acquiring distressed properties
and fixing them up to resell at a legitimate market price
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“Educating Generations, Building Communities”
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“Educating Generations, Building Communities”
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“Educating Generations, Building Communities”
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“Educating Generations, Building Communities”
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“Educating Generations, Building Communities”
? The DODD-FRANK was signed into law in 2010 as a response to
the great recession of the 2000s and is administered by the
Consumer Financial Protection Bureau (CFPB)
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“Educating Generations, Building Communities”
a. Subtitle A – Residential Mortgage Loan Origination Standards – a
MORTGAGE LOAN ORIGINATOR(MLO) is defined as any person
who either receives compensation for or represents to the public
that he or she will take a residential loan application, assist an
applicant in obtaining a loan, or negotiate terms for a loan
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“Educating Generations, Building Communities”
b. Subtitle B – Minimum Standards for Mortgages – this section
establishes national underwriting standards for residential loans
?
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QUALIFIED MORTGAGE
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“Educating Generations, Building Communities”
c. Subtitle C – High-Cost Mortgages is a consumer credit
transaction that is secured by the consumer’s principal dwelling
which includes:
1.APR TEST
2.POINTS AND FEES TEST
3.REQUIRED COUNSELING AND OTHER CONDTIONS
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Part III.
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Fair Lending
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“Educating Generations, Building Communities”
1. The Civil Rights Act of 1866 was the first piece of legislation
passed by Congress after the Civil War that dealt with providing
equal property rights for all citizens
2. Executive Order 11063 prohibited discrimination in residential
housing for FHA or VA loans, as well as loans involving federal
funds
3. Civil Rights Act of 1964 this act made Executive Order 11063 law
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“Educating Generations, Building Communities”
4. Title VIII of the Civil Rights Act of 1968 (The Federal Fair Housing
Act) – Key points are:
1. Housing only
2. Discrimination application (national origin, color, religion,
race, sex, familial status and handicap)
a. Enforcement
?
REDLINING
b. Equal Housing Opportunity/Equal Housing Lender Posters
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“Educating Generations, Building Communities”
5. The COMMUNITY REINVESTMENT ACT is based upon the finding that
financial institutions are required by law to demonstrate that their
deposit facilities serve the needs and conveniences of the
communities in which they do business
6. HOME MORTGAGE DISCLOSURE ACT exposes incidents of redlining
7. The EQUAL CREDIT OPPORTUNITY ACT (ECOA) is to require that
consumer reporting agencies adopt procedures to meet the needs of
commerce regarding:
?
Consumer credit
?
Personnel
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?
Insurance and other info
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“Educating Generations, Building Communities”
8. The purpose of the FAIR CREDIT REPORTING ACT (FCRA) is to give
consumers rights as to who has access to their credit files, as well as to
know what is in their files and the right to correct inaccurate credit
information
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Part IV.
The Real Estate Industry and
Fair Lending
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“Educating Generations, Building Communities”
?
TILA
?
TCPA
?
ECOA
?
FTC Red Flag Rules
?
RESPA
?
GLB Act
?
HOEPA
?
CCPA
?
HMDA
?
FACTA
?
DIDMCA
?
?
AMPTA
Federal Truth in Advertising
Law
?
SAFE Act
?
FHPA
?
FRCA
?
FDPA
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“Educating Generations, Building Communities”
I.
Ethics
II.
Fraud
III. Fair Lending
IV. The Real Estate Industry and Fair Lending
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“Educating Generations, Building Communities”
? Read Next Chapter
? Write Reflection Summary
? Study for Quiz
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“Educating Generations, Building Communities”
? Schedule 1 hour of study every day
? Plan to be early!
? Always be ready
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Only what you put into it!
? Take Notes
? Stay Engaged
? Think of How to Apply
? Ask Questions
? Participate / Share
? Do Activities
? Be Grateful
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“Educating Generations, Building Communities”
? Educate yourself by attending class
? Assignments & Activities
? Read every day
? Never stop learning!
“The more you LEARN the more you EARN.”
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Student Learning Objectives met
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Victor Valley College
Victor Valley College
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Nothing will work unless
you do.
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? Reflection Summary
due by beginning
of EACH class
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Federal Regulation
(TILA/RESPA/TRID)
“Educating Generations, Building Communities”
I.
Truth in Lending Act (TILA)
II.
Real Estate Settlement Procedures Act
(RESPA)
III.
TILA-RESPA Integrated Disclosure Rule
(TRID)
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Part I.
Truth in Lending Act (TILA)
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“Educating Generations, Building Communities”
? The Truth in Lending Act was implemented by Regulation Z of the
Consumer Protection Act that was first enacted in 1968
? REGULATION Z defined and standardized how to calculate the cost of
credit by mandating the disclosure of the annual percentage rate
(APR), which is a single number allowing easy comparison of loan
rates
? The purpose of Reg. Z is to enable consumers to make credit
comparisons between various credit sources so that informed
decisions can be possible
? Regulation Z also contains provisions that apply to advertising.
?
?
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RIGHT OF RESCISSION (RIGHT TO CANCEL)
TRIGGERS
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“Educating Generations, Building Communities”
? Prior to TILA, deception as to the actual rates of interest
charged was practically the rule rather than the exception
? A number of banking bills had been introduced to require
disclosure, but were defeated
? Finally, Congress passed the Truth in Lending Act in 1968
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“Educating Generations, Building Communities”
? Under TILA, the creditor (party giving the loan) is responsible for
compliance with the act
? CREDITORS are defined as persons who extend credit more than 25
times a year (more than 5 for real estate)
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“Educating Generations, Building Communities”
? Business Loans
? Credit Over $54,600 (changes every year)
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Part II.
Real Estate Settlement
Procedures Act (RESPA)
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“Educating Generations, Building Communities”
? The REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) of 1974
requires lenders, mortgage brokers, or servicers of home loans to
provide borrowers with pertinent and timely disclosure of the
nature and costs of the real estate settlement process
? RESPA forbids kickbacks or the use of required title companies,
and limits the amount of funds required to be deposited to
escrow accounts
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“Educating Generations, Building Communities”
? RESPA protects consumers from predatory lending practices
? RESPA dealt with these problems by requiring all lenders to
provide three disclosure statements to the borrower:
1. A HUD booklet that explains the loan settlement process
and outlines standard procedures.
2. A Good Faith Estimate of all settlement charges.
3. A Uniform Settlement Statement prior to close of escrow.
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Part III.
TILA-RESPA Integrated
Disclosure Rule (TRID)
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? For consumer protection, lenders give borrowers a “Loan
Estimate Form” within 3 business days of applying for a loan
? 3 business days before closing the loan, the borrower
receives the “Closing Disclosure Form”
? Before signing the loan documents, the borrower SHOULD
compare both forms to confirm that they match
? The lender has 3 business days to provide the borrower with
corrected forms
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“Educating Generations, Building Communities”
? Four individual disclosures required by both TILA and RESPA have
now been combined under TRID into two disclosures:
1. a LOAN ESTIMATE which combines the Good Faith Estimate and
Truth in Lending Disclosure (given up front) and
2. the CLOSING DISCLOSURE, which replaces the HUD-1 and Final
Truth in Lending Disclosure (given before closing)
? As mandated by Dodd-Frank, effective October 3, 2015, the
CFPB published TRID combining the disclosures
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“Educating Generations, Building Communities”
? The TRID rule does NOT apply to Home Equity Lines of
Credit (HELOC), reverse mortgages, or loans secured
by a mobile home
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LOAN ESTIMATE FORM
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CLOSING DISCLOSURE FORM
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“Educating Generations, Building Communities”
I.
Truth in Lending Act (TILA)
II.
Real Estate Settlement Procedures Act
(RESPA)
III.
TILA-RESPA Integrated Disclosure Rule
(TRID)
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“Educating Generations, Building Communities”
? Read Next Chapter
? Write Reflection Summary
? Study for Quiz
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“Educating Generations, Building Communities”
? Schedule 1 hour of study every day
? Plan to be early!
? Always be ready
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Only what you put into it!
? Take Notes
? Stay Engaged
? Think of How to Apply
? Ask Questions
? Participate / Share
? Do Activities
? Be Grateful
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“Educating Generations, Building Communities”
? Educate yourself by attending class
? Assignments & Activities
? Read every day
? Never stop learning!
“The more you LEARN the more you EARN.”
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Student Learning Objectives met
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Victor Valley College