APPLYING MORTGAGE KNOWLEDGE

The Telemarketing Sales Rule prohibits calls made to consumers: a. Who have specifically asked a mortgage professional not to contact them b. Not listed on the Do-Not-Call Registry c. After 8:00 a.m. or before 9:00 p.m. d. Who have established a business relationship within the last 12 months

a. Who have specifically asked a mortgage professional not to contact them

Businesses that conduct telemarketing are required to access the Do-Not-Call Registry every _______ in order to maintain an updated database of people on the Do-Not-Call List. a. 60 days b. 31 days c. Three months d. 45 days

b. 31 days

Which of the following best describes the legal consequences of providing an inflated description of income on a loan application? a. It is not an illegal act, but may impact the consumer's credit score. b. It is a violation of multiple federal lending laws and constitutes fraud. c. It is not illegal if the applicant inflates his or her income to secure approval for the loan but fully intends to repay the obligation. d. It is not a violation of criminal laws, and any penalties imposed are civil, not criminal

b. It is a violation of multiple federal lending laws and constitutes fraud.

When a loan is characterized as "conforming," it means the loan: a. Is a 30-year fixed. b. Meets guidelines established by Fannie Mae and Freddie Mac. c. Meets standards for a government program. d. Requires no PMI.

b. Meets guidelines established by Fannie Mae and Freddie Mac

On what page of the Closing Disclosure would the consumer find information about the cash needed to close, in comparison to information on the Loan Estimate? a. Page two b. Page three c. Page four d. Page one

b. Page three

The regulations issued for the implementation of ECOA are known as: a. Regulation E b. Regulation B c. Regulation C d. Regulation X

b. Regulation B

Section 10 of RESPA includes provisions to ensure which of the following, in relation to servicing? a. A borrower must be informed within 3 business day of the transfer of servicing b. A borrower is informed at least 15 days prior to the transfer of the servicing of his/her loan c. A borrower must know the amount of funds deposited in escrow accounts d. Any violation will result in a civil penalty of $50, up to $500,000 or 1% of the net worth of the servicer

c. A borrower must know the amount of funds deposited in escrow accounts

Which of the following is permitted as a result of a referral? a. A free monthly pass to the gym with each closing b. The names, phone numbers, and annual incomes of clients who have applied for loans c. A well-written thank you note d. A coffee card for each client

c. A well-written thank you note

All of the following are responsibilities of the closing agent, except: a. Verify that all parties have copies of forms and disclosures required for settlement. b. Verify identity and notarize documents. c. Explain the risks and benefits of the ARM product in which the client is closing. d. Coordinate the closing process.

c. Explain the risks and benefits of the ARM product in which the client is closing.

Two federal laws that relate to the confidentiality of personal financial information are: a. RESPA and FTC Disposal Rule b. FTC Disposal Rule and FNMA Application Rule c. GLB Safeguards Rule and FTC Disposal Rule d. GLB Safeguards Rule and RESPA

c. GLB Safeguards Rule and FTC Disposal Rule

This is calculated by dividing PITI by the borrower's monthly gross income: a. Total debt ratio b. Loan suitability c. Housing expense ratio d. Net tangible benefit

c. Housing expense ratio

Who is responsible for ensuring that the Closing Disclosure is delivered to the consumer? a. The CFPB b. The consumer c. The creditor d. The loan processor

c. The creditor

Each violation of federal law prohibiting bank fraud may lead to a penalty of up to ________, imprisonment for up to ________, or both. a. $2 million; 10 years b. $100,000; 50 years c. $50,000; 40 years d. $1 million; 30 years

d. $1 million; 30 years

The most commonly used type of reverse mortgage is known as a: a. Home Equity Consolidation Mortgage b. Home Equity Line of Credit c. Home Equity Conversion Loan d. Home Equity Conversion Mortgage

d. Home Equity Conversion Mortgage

The Guidance on Nontraditional Mortgage Product Risks examined and made recommendations on the use of what types of loans? a. Interest-only, payment-option ARMs, and reverse mortgages. b. Payment-option ARMs, limited documentation loans, and reverse mortgages. c. 30-year and 15-year fixed loans made to elderly borrowers. d. Interest-only, payment-option ARMs, and other nontraditional adjustable-rate mortgages.

d. Interest-only, payment-option ARMs, and other nontraditional adjustable-rate mortgages.

The practice of intentionally targeting borrowers in poor or underserved areas with predatory loans is known as: a. Redlining b. Steering c. Misappropriation d. Reverse redlining

d. Reverse redlining

An appraiser uses any one of three appraisal approaches to determine the value of a property. They are: a. Sales, cost, and comparable. b. Market comparison, cost comparison, and investment approach. c. Sales comparison, market comparison, and subject comparison. d. Sales comparison (or market), cost, and income.

d. Sales comparison (or market), cost, and income

In an ARM, margin is determined by: a. The broker, and it is the amount of profit split between the broker and lender. b. The underwriter, and it represents the percentage of error allowable for debt-to-income ratio. c. The lender, and it represents the amount of commission paid to the broker. d. The lender, and it represents the lender's operating costs and profit margin.

d. The lender, and it represents the lender's operating costs and profit margin.

Which document actually contains the borrower's promise to repay the loan? a. The TIL Disclosure b. The deed c. The mortgage d. The note

d. The note

In accordance with Section 8 of the Real Estate Settlement Procedures Act, a mortgage broker may receive compensation for which of the following? a. Taking information to be used in a loan application and submitting the file to processing. b. Referring a borrower to a real estate agent. c. Submitting a loan to a lender. d. The reasonable value of goods and/or services actually performed or provided.

d. The reasonable value of goods and/or services actually performed or provided.