NMLS Practice Questions

What are the 5 different types of contracts?

- Express Contract - Void Contract - Voidable Contract - Unenforceable Contract - Infant Contract

The Loan Estimate and the Closing Disclosures are not for use with: (3)

- HELOC's - Reverse Mortgages - Mortgages secured by a mobile home or by a dwelling that is not attached to real property

2 examples of bad questions to ask when taking a loan application?

- How much money do you have? - Why is your credit so bad?

Examples of internal stakeholders in the loan process

- Processing - Underwriting - Closing/Funding

Identifying Homeownership and Product Risk (6)

- Shared costs - Property Taxes - Insurance Challenges (e.g., flood, earthquake, hail, wind, etc.) - ARM and other challenging payment products - Balloon Payments - Negative Amortization

What are the 5 essential areas of MLO awareness necessary to meets a consumer's needs

- Transaction Costs - Sense of Security - Product Selection - Integration and Essential Logistics - Transaction Costs

4 examples of good questions to ask when taking a loan application?

- What are the chances you will be in the home less than 5 years? - Anticipating any major financial changes in the next 5 years? - Will anyone else be on the title? - Have you financed any residential real estate in the past 3 years?

3 examples of illegal questions to ask when taking a loan application?

- Will you need room for more children? - Do you get child support? - You're awful young to be buying a home, can your parents co-sign?

Highlight Conservative Estimates (5)

- Worst case cash to close - Lender credits - Seller Credits - Assistance Programs - Simultaneous Seconds

What are the minimum standards established by the Dodd-Frank Act? (4)

- a lender cannot offer a mortgage to a consumer unless he or she can reasonably determine that it can be repaid - caps on interest rates above the national average - restricting the amount of fees on late payments - prohibiting balloon payments that could more than double the initial payment on a mortgage

What happens at consummation?

- everyone meets - sign papers - exchange money

Examples of external stakeholders in the loan process

- homeowners insurance company/agent - title insurance company/agent - settlement agent - listing and selling agents - underwriting - processing

Certain revisions to the Closing Disclosure require new 3 business days waiting period. What are the revisions?

- if APR increases by .125% on a fixed rate or .250% on ARM - Changes loan product - Adds a prepayment penalty

Constraints regarding the property (9)

- property condition - minimum property requirements - project approvals - allowance for escrows - private roads - title issues (deadlines - mortgage approval/commitment - appraisal - resolution of inspections

4 examples of current debt obligations

- student loans - car loans - revolving debt - existing mortgages that will not be paid off before consummation

Ginnie Mae is insured by.. (4)

-FHA -HUD's Office of Public and Indian Housing -VA Home Loan Program -The USDA Rural Development Housing and Community Facilities Programs

What are the 4 points of an express contract?

-both parties agree - contracts formed by language - implied in fact contract - oral or written

What are the 4 types of federal law?

-constitutional law -statutory law -administrative law -case law

What are the 3 Elements of a Valid Offer

1. An expression of promise, undertaking, or commitment to enter into a contract2. Define certain terms3. Communicated offeree

What are the 5 things that need to happen when having an interview and taking a mortgage application?

1. Compliance 2. Setting Expectations 3. SMART Objectives 4. Gaining the Borrower/Consumer's Cooperation 5. The Necessity of Prompt Processing

What are the 8 Underwriting Factors?

1. Current or reasonably expected income or assets 2. Current employment status 3. The monthly payment on the covered transaction 4. The monthly payment on any simultaneous loan 5. The monthly payment for mortgage-related obligations 6. Current debt obligations, alimony, child support 7. The monthly debt-to-income ratio or residual income 8. Credit history

What are the 4 Types of Qualified Mortgages

1. General 2. Temporary 3. Small Creditor 4. Balloon-Payment

What are the 3 Requirements for Qualified Mortgage?

1. Restrictions on Loan Features 2. Restrictions on Points and Fees 3. Restrictions on Underwriting

What are the 3 approaches that appraisers use to value property?

1. The Cost 2. Sales Comparison 3. Income Capitalization

What are the 3 ways to consider value?

1. The current cost of reproducing or replacing a building, minus an estimate for depreciation, plus the value of the land 2. The value indicated by recent sales of comparable properties in the market 3. The value that the property's net earning power will support

what are the 3 main categories of qualified mortgages?

1. general definition 2. gse-eligible 3. small creditor

What are the 3 phases of money laundering?

1. placement 2. layering 3. integration

What is the standard UFMIP for FHA loans?

1.75%

as a loan officer, you have to honor the prices you told the borrower for _____ business days

10

The Uniform Residential Loan Application is also known as the ______________

1003

Which program is the basic FHA 96.5% LTV program?

203b

The Closing Disclosure must be provided to consumers at least _____ business days before consummation of the loan

3

The Loan Estimate has to be delivered to the borrower no later than _____ business days after the application has been submitted

3

How many days from the application does a loan originator have to provide a loan estimate to borrowers?

3 business days

The creditor must give consumers the Closing Disclosure form to consumers so that they receive it at least _____ business days before the consumer closes on the loan

3. 18 if the creditor makes certain significant changes between the time the closing disclosure form is given

what is the maximum loan term?

30 years

What are the parts that make up a FICO score?

35% Payment History 30% Amounts Owed 15% Length of Credit History 10% New Credit 10% Credit Mix

What are the 5 parts that make up a credit score?

35% Payment History 30% Amounts Owed 15% Length of History 10% New Credit 10% Types of Credit Used

To remain exempt from the TILA Originator rule, Sellers who finance can extend credit no more than ______ times per year.

5

What is the minimum credit score for MAXIMUM financing on an FHA 203b program?

580

An individual would be eligible for a loan originator license if they have never been convicted of, pled guilty or solo contendere to a felony in any court in the ___________ year period proceeding the date of the application for licensing

7

Title 47 of the US Code of Federal Regulations addresses telemarketing. What are the times that are allowed for a residence to be called? a. After 8 a.m. and before 9 p.m. b. After 7 a.m. and before 8 p.m. c. After 9 a.m. and before 10 p.m. d. After 7:30 a.m. and before 8:30 a.m.

A

After 7 years a consumer report will no longer contain all of the following EXCEPT a. bankruptcy b. paid taxes liens from the date of payment c. accounts placed for collection d. civil judgements (unless the statute of limitations is longer)

A. Bankruptcy A bankruptcy will typically remain on a consumer report for 10 years from the discharge date. Paid tax liens, collections, judgements, charge offs, and any conviction of a crime should not be included on the report. Delinquent student loan debt in some case can remain on a report for longer than 7 years

Which of the following is NOT subject to the Zero Tolerance rule under TRID?

Any third-party services the consumer can shop for

Once a complete application has been received, the loan estimate must be delivered or mailed to the borrower a. 3 calendar days after receipt of the application b. 3 business days after receipt of the application c. 7 business days after receipt of the application d. 7 calendar days after receipt of the application

B. 3 business days after receipt of the application a lender must ensure that a loan estimate is delivered (including electronic delivery) to a borrower or placed in the mail to the borrower no later than the third business day after receipt of the borrower's application. Also, it should not be issued less than 7 days before the loan closing. Failure to follow this regulation can result in the lender paying for some of the borrower's loan fees.

When is a lender required to send a consumer a copy of their appraisal? a. 7 days before a loan closes b. 3 days before a loan closes c. 3 days after the report is completed d. after a consumer has paid for the appraisal

B. 3 days before a loan closes A lender is required to send a copy of a consumer's appraisal 3 days before the loan closes. They should also sent it as soon as possible after they receive the report. All consumers have a right to receive a free copy of the appraisal report

All of the following are required to be covered by HOEPA EXCEPT a. refinances b. reverse mortgages c. closed-end home equity loans d. purchase money mortgages

B. reverse mortgages a majority of home mortgages is required to be covered by HOEPA. This includes owner-occupied, second home, and investment properties. HELOCS also require HOEPA coverage. Construction loans that finance the initial construction do not require coverage. Loans directly originated by the Housing Finance Agency and the US Department of Agriculture's 502 Direct Loan program do not require HOPEA coverage

Common law governs ____________?

Contracts

What is NOT an example of a "change of circumstance" a. The need for flood insurance b. A change in the loan amount after the Good Faith Estimate has been issues c. A disaster d. A change in the borrower's monthly income

D. A change in the borrower's monthly income .A change of circumstance includes emergencies, disasters, war, and acts of God. It also includes information that was disclosed on a Good Faith Estimate that is found to be incorrect. This many include the loan amount, fees, and the interest rate. Boundary disputes, the discovery that a property is located in a flood zone, or environmental issues can also be considered a change of circumstance A borrower's income, assets, or spelling of the name do not require a change of circumstance. In addition, information that was collected from the credit report prior to the Good Faith Estimate being issues is not a change of circumstance

Which piece of information may NOT be omitted by an applicant on a mortgage application? a. Race b. Sex c. Ethnicity d. Social Security Number

D. Social Security Number A social security number must be provided on a mortgage application so that a credit report can be ordered. According to the Home Mortgage Disclosure Act an applicant does not need to provide information regarding race, sex, or ethnicity. If an application is taken in person, this information may be input based on a visual observation and surname. If the application is taken over the phone, by mail, or on the internet, the data does not need to be provided

A fraud alert can be triggered by each of the following EXCEPT a. when a consumer's credit report shows that he or she is a victim of fraud b. when a consumer's credit report reflects that he or she has filed a criminal complaint pertaining to identity theft c. when a consumer's credit report reflects that he or she is an active duty military member d. when a consumer's credit report shows that he or she is under investigation for committing fraud

D. When a consumer's credit report shows that he or she is under investigation for committing fraud Fraud alerts do not pertain to those who commit fraud but to victims of fraud. According to the Fair Reporting Credit Act, a fraud alert "notifies all prospective users of a consumer report relating to the consumer that the consumer may be a victim of fraud, including identity theft, or is an active duty military consumer, as applicable" A lender must verify additional identification or ask the consumer specific information regarding their credit history

The LE/CD disclosures are for use with:

Federally related closed-end fixed-rate mortgages secured to real property

In 1971, which GSE was the first to issue a conventional mortgage-backed security?

Freddie Mac

What does HOEPA do?

HOEPA creates certain protections under the Truth-in-Lending Act for loans with high interest rates and high fees

Which form(s) did the closing disclosure replace?

HUD-1

At the center of HFA activity within the states are what 3 federally authorized programs?

Housing bonds Housing credit HOME Investment Partnerships (HOME) Program

What is the right of rescission?

It is a right, set forth by TILA, of a borrower to cancel a home equity or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee, within 3 days of closing

What form must be provided to consumers no later than the third business day after they submit a loan application?

Loan Estimate

What is HERA

Major housing law that intended to assist with the recovery and the revitalization of America's residential housing market

Which of the following is NOT a government sponsored entity? -Federal Home Loan Mortgage Corporation (Freddie Mac FHLMC) -Mortgage Guarantee Insurance Corporation (MGIC) -Federal Home Loan Bank System (FHLBank System) -Federal National Mortgage Association (Fannie Mae FNMA)

Mortgage Guarantee Insurance Corporation

what is title XIV? (14)

Mortgage Reform and Anti-Predatory Lending Act

What are the parts needed to quote a payment?

P&I (Principal and Interest) (taxes and insurance are not included)

What are the parts needed to quote full payment?

PITI (principal, interest, taxes, insurance)

which federal law prohibits kickbacks and unearned fees from being collected?

RESPA

What does SMART in SMART objectives stand for?

S- Specific M- Measurable A- Agreed Upon R-Realistic T- Time Bound

Regulation H

S.A.F.E. Mortgage Licensing Act-State Compliance and Bureau Registration System

which entity issues housing bonds?

State Housing Finance Agencies (HFAs)

Which of the following is a term that is allowed on a qualified mortgage?

Term of 15 years

What act authorized the creation of National Mortgage Associations to purchase and sell first mortgages?

The National Housing Act of 1934

What is Section LII?

Title Information

Why CC&R?

To make sure the value of people's properties stay up

What was the purpose of the Federal Home Loan Bank Act of 1932?

To provide access to home mortgage funding on a nationwide basis through a network of 12 Federal Home Loan Banks

Reg Z is apart of what act?

Truth in Lending Act of 1968

When can the borrowers move into their property?

Typically the day after closing

How is the monthly payment for an Adjustable Rate Mortgage calculated?

Using the fully indexed rate, or an introductory rate, whichever is higher

what is a regulation?

a general statement issued by an agency, board, or commission that has the force and effect of law

What is an interest only mortgage?

a loan with scheduled payments that require only interest payments for a specified amount of time. the loan balance does not go down with each payment

Which income source cannot be considered in loan review? a. Educational military benefits b. Part-time income c. Alimony and child support d. Annuity income

a. Educational military benefits Educational military benefits will not continue after the borrower has finished his or her education and therefore cannot be considered a source of income. As long as an income source can be determined to be consistent and continue for a sufficient amount of time, it can be considered a source of income

Which factor can be considered when evaluating a loan application? a. Immigration status b. National origin c. Pregnancy d. Marital status

a. Immigration status Because an individual's immigration status can affect his or her ability to repay a loan, immigration status can be considered when reviewing the application. Income and credit history are also factors in determining whether to extend credit. A borrower's race, sex, religion, national origin, marital status, and child bearing should not be considered when evaluating an application

Which type of loan is exempt from Real Estate Settlement Procedures Act (RESPA)? a. A loan to finance a commercial warehouse b. A reverse mortgage c. A home equity line of credit d. A mortgage to purchase a single-family home

a. RESPA typically applies to any loan that is secured by a first or second lien on a residential property

What is one of the minimum standards for a mortgage established by the Dodd-Frank Act? a. a lender cannot offer a mortgage to a consumer unless he or she can reasonably determine that it can be repaid b. no prepayment penalties are allowed on a mortgage c. a system was established to track the transfer of servicing once it is sold to a subsequent loan servicer d. enforcing laws that pertain to discrimination in the financial sector

a. a lender cannot offer a mortgage to a consumer unless he or she can reasonably determine that it can be repaid other minimum standards include caps on interest rates above the national average, restricting the amount of fees on late payments, and prohibiting balloon payments that could more than double the initial payment on a mortgage

which of these loan products is considered a qualified mortgage? a. loans guaranteed by fannie mae and freddie mac b. interest-only loans c. loans with negative amortization d. loans with balloon payment

a. a qualified mortgage is a loan that has stable features and avoids riskier options

Which of the following is considered unprofessional mortgage conduct? a. assisting a buyer or seller to determine the offering price or sales price of real estate b. keeping your CE completion certificates c. paying third party fees d. not charging third party fees

a. assisting a buyer or seller to determine the offering price or sales price of real estate

if the language within the four corners of the contract is unambiguous, the parties' intentions are determined: a. from the plain meaning of the contractual language b. using the legal language as determine by law c. from the implied meaning of the contractual language d. by the attorneys testimony

a. from the plain meaning of the contractual language

The Truth and Lending Act ensures all of the following EXCEPT a. it gives guidance to a lender on whether they should grant a loan to a borrower b. it requires all lenders to have a uniform set of disclosures c. it provides borrowers with the right to rescind d. it provides minimum standards for the most residential loans secured by a dwelling

a. it gives guidance to a lender on whether they should grant a loan to a borrower the Truth and Lending Act does not tell a lender whether to grant a loan to a borrower or how much interest it can charge. According to the CFBP "The Truth in Lending Act (TILA) is intended to ensure that credit terms are disclosed in a meaningful way so consumers can compare credit terms more readily and knowledgeably. Before its enactment, consumers were faced with a bewildering array of credit terms and rates. It was difficult to compare loans because they were seldom presented in the same format. Now, all creditors must use the same credit terminology and expressions of rates"

Prior to a consumer receiving and e-signing loan disclosures, what must he or she do? a. properly consent to receive e-disclosures b. register an email address with the lender c. receive training on e-disclosures d. provide a copy of an actual signature

a. properly consent to receive e-disclosure she or she must be provided with information regarding the rights to receive the same information in paper form as well

What is NOT an acceptable term when a mortgage loan originator (MLO) asks a consumer about marital status? a. single b. married c. unmarried d. separated

a. single

what is the equation to determine daily interest charge?

annual interest / 365 = daily interest charge

What is the basic standard mortgage limit for a Federal Housing Administration (FHA) insured loan on a single-family residence? a. $484350 b. $314,827 c. $401,125 d. $294,515

b. $314,827 the current basic standard limit for a one- or single-family home is $314,827

on an owner-occupied property a seller may contribute what percentage of the purchase price to the buyer's closing costs if the buyer is using a conventional loan and is putting 5% down as a down payment? a. 2% b. 3% c. 5% d. 6%

b. 3%

Typically, what is the minimum down payment for a Federal Housing Administration (FHA) loan? a. 3.0% b. 3.5% c. 5.0% d. 5.5%

b. 3.5%

Which of the following is a Fundamental Consumer Protection Principle? a. Approving loans regardless of the borrower's history of repaying other loans b. Approving loans based on the borrower's ability to repay the loan according to its terms c. Approving loans based on the borrower's equity (hard money loan) d. Approving loans regardless of the borrower's ability to repay the loan according to its terms

b. Approving loans based on the borrower's ability to repay the loan according to its terms

A Good Faith Estimate is not issued until a complete application is received from a consumer. Which answer is NOT part of the list of information that qualifies as a received application? a. Consumer's social security number b. Consumer's assets c. Address of the property d. The mortgage loan amount sought

b. Consumer's assets. Consumer's assets are not an essential piece of the Good Faith Estimate

From an investor's standpoint, one very significant aspect of mortgage financing is the relative security of the investor's investment. Which of the following instruments established the investor's security? a. The Promissory Note b. The Deed of Trust c. The Loan Application d. The Co-Signer

b. The Deed of Trust

If a borrower wishes to initiate the cancellation of private mortgage insurance (PMI), what is NOT considered a requirement? a. a good payment history b. a minimum credit score depending on the loan product c. providing a written request to the loan servicer to remove the insurance d. having met the requirements that were established by the lender

b. a minimum credit score depending on the loan product there is not a requirement that a borrower's credit be checked when requesting the removal of PMI. A written request must be provided to the servicer to remove the insurance

What is NOT a function of the Consumer Financial Protection Bureau (CFPB)? a. financial education b. provide funding to programs that prevent discrimination in the financial sector c. taking complaints from consumers d. enforcing laws that pertain to discrimination in the financial sector

b. provide funding the CFPB regulates the financial sector based on established laws. It enforces those laws when they are violated through the court system. This keeps financial institutions accountable for any violations. The CFPB provides consumers the ability to file a complaint against an institution. It also educates consumers so that they can make informed choices when purchasing or utilizing a financial product

The initial escrow statement includes all of the following EXCEPT a. the amount of the monthly mortgage payment b. the amount that is collected for homeowners association dues c. the portion of the monthly payment going into the escrow account d. the amount of reserves or cushion as determined by the loan servicer

b. the amount that is collected for homeowners association dues Homeowners association dues are not collected into the escrow account and are not a part of the monthly mortgage payment

Special payment calculation rules apply for loans with:

balloon payments interest-only payments negative amortization

what is the number of housing agencies that is required to be listed on the housing counseling disclosure? a. 3 b. 5 c. 10 d. 12

c. 10

when using a conventional loan, what is the minimum required down payment on a second home (not a primary residence?) a. 20% b. 15% c. 10% d. 5%

c. 10%

When a mortgage loan originator does any type of advertising, they must retain a copy of material used for how long? a. 6 months b. 12 months c. 24 months d. 36 months

c. 24 months

A suspicious activity report (SAR) must be filed no later than ____________ calendar days after an incident has caused a need for the report a. 60 b. 45 c. 30 d. 15

c. 30 a suspicious activity report (SAR) must be filed no later than 30 calendar days after the detection of suspicious activity. Some examples of suspicious activity could be large and irregular cash deposits, irregular incoming wires, and hacking into a financial institutions server. This report primarily pertains to acts of money laundering and fraud. The report is filed with the Financial Crimes Enforcement Network. Financial institutions and their employees are not allowed to notify those individuals accused of the suspicious activity

how many days, after settlement, does the lender have to deliver the proceeds of a loan to the seller or to the escrow/closing office? a. 5 calendar days b. 5 business days c. 4 calendar days d. 4 business days

c. 4 calendar days

What type of property does a right of rescission apply to? a. A second home b. A nonowner-occupied duplex c. A principal residence d. A nonowner-occupied condominium

c. A principal residence The right of rescission applies to only a refinance of a principal residence. This law is covered under the Truth and Lending Act. It allows a consumer to cancel a transaction within 3 dats after a loan closing. It is applicable regardless if it the property has one to four units

When is an adverse action notice required? a. When an application is withdrawn b. When a counteroffer is extended, and the offer is accepted c. When a counteroffer is extended, and the offer is rejected d. When there is a change in the terms of the mortgage

c. When a counteroffer is extended, and the offer is accepted On a mortgage application, an adverse action is a negative action reported to a consumer regarding the denial of the credit application

who bares the risk of loss if the house suffers a fire prior to closing? a. nobody b. buyer c. seller d. agent

c. seller

Under the Safe Harbor Rule, which one of the following compensation methods would not be acceptable? a. the long term performance of the originator's loans b. loans made to new customers versus loans to existing customers c. the individual loan characteristics, such as discount points or fees d. An hourly pay rate based on the actual number of hours worked

c. the individual loan characteristics, such as discount points or fees

To avoid steering a customer to a loan product that may give higher compensation to a mortgage loan originator (MLO), an MLO must provide multiple loan options for a borrower to review. These loan options must include all of the following EXCEPT a. the loan with the lowest interest rate b. the loan with the lowest amount of origination or discount points c. the loan with the shortest term d. the loan with the lowest interest rate that does not have prepayment penalty, interest-only payments, a negative amortization, or a balloon payment in the first 7 years of the loan

c. the loan with the shortest term Different terms of a loan amount do not need to be provided to a borrower unless the borrower requests them. Steering a borrower to a particular loan product for higher compensation is considered to be steering and is in violation of the Truth in Lending Act's regulation Z. Multiple rates with their associated origination or discount fees help a borrower make an informed decision when choosing a mortgage loan

What is a primary purpose of the USA Patriot Act? a. to verify if a consumer is a US citizen b. to improve the mortgage process for active duty military and veterans c. to prevent and punish terrorist acts in the United States and throughout the world d. to protect US businesses from foreign competitors

c. to prevent and punish terrorist acts in the United States and throughout the world The purpose of the USA Patriot Act is to deter and punish terrorist acts in the United States and around the world. Some of the other purposes include financial services providers to report potential money laundering and to help retrieve stolen assets

On a closed-end transaction, which form is required to be provided to a borrower three days before consummation?

closing disclosure

what is the body that enacts the legislation that mandates or authorizes agencies to issue regulations?

congress

The U.S Constitution and its amendments are interpreted by the courts as ___________________

constitutional law

What is considered an acceptable practice under the Real Estate Settlement Procedures Act (RESPA)? a. a home seller requires a home buyer to use a certain title company as a condition of the sale b. a home inspector pays a referral fee to anyone who refers business c. requiring escrow accounts as a condition of the loan d. if a borrower sends a "qualified written request" to his or her loan servicer concerning the serving of the loan, the servicer must provide a written acknowledgement within 45 business days of the request

d.

Which of the following transactions are NOT subject to the provisions on loan officer compensation under TILA? a. One to four unit properties b. Secondary Financing c. Properties other than primary residence d. A six unit apartment building

d. a six unit apartment building

Unless someone removes his or her name, how long does an individual's name remain on the national do-not call list? a. 5 years b. 10 years c. 10 years d. indefinitely

d. indefinitely

What is NOT a requirement when purchasing a nonowner-occupied rental property? a. additional information on the appraisal b. asset reserved beyond the minimum required down payment c. a larger down payment than an owner-occupied property d. prior landlord experience

d. prior landlord experience the required reserves are typically 2-6 months worth of payments. the appraisal will also require a rent schedule, an operating income statement, or both. the down payment amount is also higher on an investment property. it is anywhere from 15-25% depending on the number of units

All of these are key business areas of the Department of Housing and Urban Development (HUD) EXCEPT a. healthcare programs b. multifamily housing c. housing counseling d. providing oversight to commercial building standards

d. providing oversight to commercial building standards typically, the state government where the commercial building is located oversees the standards of how it is built and maintained

Which of the following would be exempt from licensing requirements? a. a loan originator b. loan processor working as an independent contractor c. an underwriter working as an independent contractor d. seller financers

d. seller financers

When can the Veterans Administration (VA) loan funding fee be waived? a. when there is a 5% down payment b. when the borrower is on active military duty at the time of application c. when the borrower is a retired veteran d. when the borrower is receiving monthly VA disability income

d. the VA funding fee is waived when the borrower is a recipient of monthly VA disability income. the VA funding fee is discounted when 5% is put down as a down payment. It is discounted even more when the down payment is 10% or more. However, it is not waived

All of the following are an example of finance charge EXCEPT a. interes tb. points c. a loan processing fee d. title insurance

d. title insurance According to 12 CFR 1026 - TRUTH-IN-LENDING ACT (TILA-REGZ), the definition of a finance charge is "the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit?

What is the purpose of the SAFE Act?

designed to enhance consumer protection and reduce fraud

For adjustable-rate mortgages, the monthly payment must be calculated using the ________ ___________ rate or an _____________ rate, whichever is higher

fully indexed , introductory

For adjustable-rate Qualified mortgages, the monthly payment must be calculated using the __________ or an ___________ rate, whichever is higher:

fully indexed/introductory

what is the administrative procedure act?

guides the rule making process

what is the equation to determine discount points?

house price - down payment = loan amount loan amount x discount points (in decimal form) = $ amount

What is the 61-2c-301

if you are a loan officer on the loan, you can not also be the appraiser, realtor, etc. on the same loan

What is Regulation Z?

is the part of the Truth in Lending Act of 1968 that promulgates rules that protect consumers against misleading practices by the lending industry.

By allowing the buying and selling of first mortgages, the 1934 Housing Act had what effect on the mortgage markets?

it added liquidity to the mortgage markets

what is the equation to determine loan to value?

loan amount / appraised value = loan to value (in a percentage)

What is the equation to determine annual interest?

loan amount x interest rate = annual interest

what is the equation to determine private mortgage insurance?

loan amount x mortgage insurance rate (percentage) / 12 = private mortgage insurance

What does the Consumer Financial Protection Bureau do?

make sure you are treated fairly by banks, lenders and other financial institutions

what is the equation to determine the housing ratio?

monthly payment / monthly gross income = housing ration in (ratio)

What are the 6 pieces of information needed for an application from a consumer? (PENCIL)

property address estimate of value (purchase price) name (applicant) credit report (or SSN to run a credit report) income loan amount sought

Record Requirements 302

records need to be maintained and safeguarded for 4 years from the last to occur 1. the final entry made by that licensee 2. if the loan is serviced by that licensee- if the residential mortgage is paid in full-the licensee ceases to service the loan 3. if the residential mortgage loan is not serviced by the licensee, the residential mortgage loan is closed

what does the CRA do?

reviews and chooses to reject new regulations issued by federal agencies

Legislative enactments, such as U.S. public and private laws, are known as _______________

statutory law

what is the integration and essential logistics?

the balance and handling of the details of the operation

Who is responsible for Closing Disclosure compliance?

the creditor

Who decides when an ethical failure violates the law?

the federal regulators and law enforcement agencies

Consummation occurs when

the point the consumer becomes legally obligated to the creditor and is determined by state laws

When chartered, what was Fannie Mae's (FNMA) mandate?

to act as a secondary mortgage market facility that could purchase, hold, and sell FHA insured loans

what is the purpose of title xiv (14)?

to assure that consumers are offered and receive residential mortgage loans on terms that reasonably reflect their ability to repay the loans and that are understandable and not unfair, deceptive, or abusive

Can a lender violate Reg Z (TILA) by overstating the APR?

yes