MLO Study Set
The monthly mortgage payment would be ________ if the principal and interest are $761.78, the mortgage insurance is $82, and the escrow is $206.
$1,049.78
How much would a borrower pay for two discount points on a $150,000 mortgage?
$3,000
1003/URLA
* Also known as the Uniform Residential Loan Application * Known as FORM 1003 by Fannie Mae and form 65 by Freddie Mac * This form provides the foundation of the load with loan terms, borrower information, residence & employment history, income, assets, liabilities, and important questions regarding credit, liabilities, and HMDA data.
Assets & Liabilities
-Liquid financial reserves are those liquid or near-liquid assets that are available to the borrower after the mortgage closes. -Liabilities are the things that the borrower is responsible for paying on a month basis.
How many scored questions are on the UST test?
115 questions
The 1003 application includes _______ pages for additional borrowers.
4 pages
What is the LTV of a home that was appraised at $100,000 if the homeowners took out a mortgage for $80,000?
80%
Real Estate Contract
A contract between parties for the purchase and sale, exchange, or other conveyance of real estate. The sale of land is governed by the laws and practices of the jurisdiction in which the land is located.
Foreclosure
A legal proceeding to terminate a mortgagor's interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale to satisfy the unpaid debt secured by the property.
Bankruptcy
A statutory procedure by which a usually insolvent debtor obtains financial relief and undergoes a judicially supervised reorganization or liquidation of the debtor's assets for the benefit of lenders. Chapter 11 or 13 remains on the credit report for 7 years, a chapter 7 for 10 years.
All of the following are prohibited under the MAP Rule, except: A. Disclosing the payment terms B. Using a logo that resembles an entity like FHA or VA C. Stating that you are endorsed by the government D. Adding undisclosed insurance credit plans as a requirement of a loan.
A. Disclosing the payment terms
All of the following are types of indexes used to calculate the interest rate on ARMs, except: A. Fixed index B. MTA index C. Prime index D. SOFR index
A. Fixed Index
Which of the following is NOT one of the four basic elements that a company should have in its Red Flags Rule Policy? A. Procedures to identify employees to develop the policy B. Processes to identify false IDs or other documents C. Actions to take when a red flag is detected D. Plan to keep policy updated
A. Procedures to identify employees to develop the policy
All of the following are acceptable reasons to access a borrower's social security number, except: A. Running a background check B. Running a credit check C. Checking a credit score D. Quoting an accurate interest rate
A. Running a background check
____________ occurs when perpetrators rely on a common bond and exploit the trust and friendship that typically exists in the group of individuals to support the scheme.
Affinity fraud
Which of the following is an acceptable source of funds for reserves: A. Personal credit card B. The cash value of a vested life insurance policy C. Cash proceeds from a cash-out refi on the subject property D. Stock held in an unlisted corporation
B. The cash value of a vested life insurance policy
All of the following are true of a mortgage underwriter or processor, except: A. They perform clerical or support duties B. They take a residential mortgage loan application C. They are supervised and instructed by a licensee D. They cannot discuss loan rates and terms with a borrower
B. They take a residential mortgage loan application
Which one of the following occurs when a real estate agent or buyer persuades an owner to sell their property at a deflated amount, based on the notion that other houses in the neighborhood are being acquired by individuals from another race or class?
Blockbusting
Which of the following is NOT a feature of a HELOC? A. When the balance is repaid the homeowner may use it again B. It is a mortgage loan line of credit C. Requires a large lump-sum payment at the end of the term with a smaller payment to start D. Borrowers can get a lump sum disbursement
C. Requires a large lump-sum payment at the end of the term with a smaller payment to start
All of the following are arms of the GLBA, except: A. The Pretexting Rule B. The Opt-Out Rule C. The Subtexting Rule D. The Safeguard Rule
C. The Subtexting Rule
What is the term for excessive selling or lending activity to generate fees and commissions?
Churning
All of the following are prohibited acts under the Telephone Consumer Protection Act, except: A. Abandoned calls B. Unsolicited telephone calls C. Not providing caller ID D. Calling between 9 am and 9 pm
D. Calling between 9am and 9pm
All of the following are approaches to determine value, except: A. Cost approach B. Market approach C. Income approach D. Estimated approach
D. Estimated approach
Which of the following is an example of a conforming loan? A. VA loan B. FHA loan C. USDA loan D. Freddie Mac loan
D. Freddie Mac loan
All of the following situations require a SAR, except: A. Suspected insider abuse B. Transactions that involve a lot of cash C. Transactions using cash that might be illegal D. Transactions with a low or moderate amount of cash
D. Transactions with a low or moderate amount of cash
Taxable Income
Income that IS taxed by the IRS. Two most common types of income are variable and stable income.
Nontaxable income
Income that is NOT taxed by the IRD- it can often be grossed up 25%.
The total interest percentage is the total amount of _______ you will pay over the loan term expressed as a percentage of the loan amount.
Interest
MLO license renewals with NMLS open each year on
November 1st
What is the name of the act that created the NMLS?
SAFE Act
CHARM Handbook
The Consumer Handbook on Adjustable- Rate Mortgages is a required disclosure on all adjustable-rate mortgages regardless of whether they are a purchase or refinance. This document is also required to be disclosed by thereunder within 3 business days of application.
4506-C
The lender uses this form to obtain a copy of the borrower's tax transcripts from the Internal Revenue Service (IRS) to determine whether they can qualify for a mortgage. The underwriter uses tax transcripts to verify a borrower's income.
VOD (Verification of Deposit)
This is done by the processor to confirm the borrower has the money to pay the down payment or closing costs.
VOE (Verification of Employment)
This is done by the processor to confirm the borrower is employed.
Lenders are required to provide a closing disclosure at least _____ business days prior to the consummation of the loan.
Three days
Which situation would an MLO license be required?
When an individual offers or negotiates the terms of a residential mortgage loan
Loan Estimate or LE
____________________ form integrates the Good Fait Estimate and the initial TIL in all covered transactions. * The lender is required to provide the LE within 3 business days following the receipt of the borrower's loan application. * The _________________ must contain a good faith estimate of credit costs and transaction terms, be in writing and contain the information required under TRID.
The Home Loan Toolkit
____________________ is another disclosure required by the RESPA, Reg X, and enforced by the CFPB as part of TRID. The lender must provide this document to the borrower within 3 business days of application, for purchase transactions only. This disclosure is a pamphlet created to help a borrower through the mortgage process.
Charged Circumstances
____________________ is what it is called when a situation occurs, and the lender can rest their tolerances on the LE. Examples include acts of god, too low appraisal , and charge in program.
Pre-approval
_________________________ is sometimes the second step; it is a conditional commitment to grant the mortgage.
Short Sale
a means of selling a house for less than the outstanding mortgage on it. __________________ and foreclosures are both options for distressed borrowers who are behind on their mortgage payments or are underwater on their homes (or both). The homeowner usually initiates the short sake, but it must be signed off on by the lender that holds the mortgage.
Loan pre-qualification includes...
an analysis of the borrower's credit report and an in-depth look at the borrower's income ability to purchase a home.
