3rd 115
A borrower is placing a down payment of 15% on a 30-year FHA mortgage. How long will the borrower pay MIP
11 years
Per ECOA record retention rules, how many months should the information be maintained from the date the borrower was notified of credit action
25
For an FNMA, 90% fixed loan, the generally accepted qualifying ratios are what
28%/36%
According to TILA, a mortgage broker needs to provide the borrower with the LE within how many days of completed application if they are mailing it
3 business days
Mortgage fraud is investigated by the FBI and is punishable up to what amount of fine or prison time or both
30 years in fed prison or a $1 million fine or both
Karen and Daniel have decided to list their home for sale. They called on Randy the Realtor to come in and list the house. Randy has put together a proposal of a sale price for the home. He believes by looking at the three most recent sales of homes in the area, as well as those listed that the house should sell around $250,000. Randy's opinion of value was based off of
broker's price opinion
Which of the following assets may never be used for closing costs and down payment with FHA loans
cash advance on a credit card
Service release premium
compensation paid to represent the value of the servicing rights for a loan
The fair and accurate credit transactions act is overseen by who
consumer financial protection bureau
A discount point is BEST described as a charge the borrower pays to do what
decrease the rate on a mortgage loan below par
A sum of money given to bind the sale of real estate is
earnest money
A settlement agent must perform many tasks except
funding the mortgage loan
Which loan will never have mortgage insurance
A 100% LTV VA Loan
A borrower gives you their income and debt and asks what amount they qualify for. Assuming you have decided which loan program best fits their needs to calculate what loan amount they are able to repay you would need to know all of the following except
Amount of cash available to close
Which federal law regulates credit reporting agencies like Experian, Equifax, and Transunion and requires a creditor that denies credit to a borrower to provide access to a free credit report for denial
Fair Credit Reporting Act
Redlining is a violation of both
Fair housing act and ECOA
A borrower has a right to cancel certain transactions in writing by midnight of the third business day following the later of the consummation of the transaction or delivery of notice of the right to cancel. The cooling off period between closing and the time that funds are disbursed is called what
Right to recission
When David the loan originator begins working on Harold's loan app, he asks Harold for all long term debt. This allow David to use all of this information and include the proposed PITI payment to calculate
back end DTI
According to ECOA, if a group of borrowers wish to sue a lender through a class action lawsuit what is the max penalty
$500,000 or 1% of creditor's net worth, whichever is less
You've completed an application for a fixed-rate mortgage to a borrower. The LE must be re-disclosed during processing if the APR fluctuates by more than
1/8 of 1% (.125)
All of the following are exempt from RESPA, except
4-unit dwelling
The minimum age for a reverse mortgage applicant
62
A couple is purchasing a home that has a price of $215,000 and the appraised value of $200,000. They will take out a 1st mortgage in the amount of $150,000 and $50,000 for their 2nd mortgage. What is the LTV
75%
What would the CLTV be for a purchase price of $165,000 and the appraised value of $154,000. The buyer is applying for a 1st mortgage in the amount of $123,200 and the seller is providing a seller carryback loan in the amount of $15,400
90%
According to RESPA, which of the following payments are acceptable
A fee paid to someone equal to their percentage of ownership in the affiliated business
Which of the following would result in a violation of the CFPB's Reg X
A lender receiving funds from a settlement service provider for a business referral
Foreclosure is best defined as which of the following
A proceeding to distinguish all rights, title, and interest of the owners of a property in order to sell the property to satisfy a lien against it
According to the Safe Act, conducting which of the following activities would require the person to be licensed
Advising the borrower on interest rates
When a power of attorney is executed it creates a legal relationship between the person signing and their authorized agent. The authorized agent is also commonly referred to as which of the following?
Attorney-in-fact
What information is always found on a credit report
Borrower's name and address
A limit on how much the interest rate or monthly payment can change, either at each adjustment or during the life of the mortgage is
CAP
The fair housing act is an amendment to
Civil Rights Act of 1968
The Truth in Lending Act regulates which of the following disclosures
Closing disclosure, right to rescission and Charm booklet
A borrower wants to buy an investment property. He has a credit score of 700 and is a veteran. He is also looking to put as little down as possible. What type of loan should he use?
Conventional
HMDA was passed in Congress in response to public concern over what?
Credit shortages in certain urban neighborhoods
When a mortgage broker acts as an agent for a bank in connection with a mortgage loan, the bank may delegate to the broker the obligation to perform the requirements of the bank's CIP rule. CIP is
Customer identification program
Donald contacts Mega Mortgage, a non-depository lender, regarding a refinance of the property he has lived in for the past 7 years. During the app process, Donald informs the MLO that he is not the borrower or co-signer on the current mortgage, but that he has been making payments on the mortgage for the past 7 years on behalf of his elderly mother and wishes to be added to the new loan and the title. When the MLO request to speak with Donald's mother, Donald mentions that his mother is not physically or mentally capable of participating in the refinance. What should the MLO do?
Determine whether or not Donald has valid authority to continue with the loan
A clause in a mortgage that states that if a mortgagor sells, transfers, or in any way encumbrances the property then the mortgagee has the right to implement a clause making the balance of the obligation due. Which is
Due on Sale Clause
The scope of which regulation is to ensure that various financial institutions and other firms engaged in the extensions of credit exercise their responsibility to make credit available with fairness, impartiality, and without discrimination based on the basis of sex or martial status?
ECOA
Two minority loan applicants were told it would take several hours and require the payment of an app fee upfront to determine if they would qualify for a home mortgage loan and more than likely they will end up not qualifying anyway. Which law is being violated?
ECOA
Which federal law ensured that each American has equal access to credit opportunities free from discrimination
ECOA
Which of the following is most correct
Each licensee must appear before the Bureau and give relevant testimony when summoned
Which imposes restrictions on lenders regarding the use of nonpublic personal information
Gramm-Leach-Bliley Act
Which initial disclosure does RESPA require the mortgage broker to provide to the borrower within 3 business days after the completed loan application, if mailed
Homeownership counseling organization list
A borrower has an adjustable rate mortgage with the first year P&I payment of $2,259. Eight years later the P&I payment is $2816. What best describes what happened
Index value increased
According to TILA finance charges can be which of the following
Interest + mortgage ins + prepaid finance charges
Why is the APR not the same as an interest rate?
It factors in the interest and other prepaid finance charges
John, a loan originator for ABC lending, delivered all the necessary initial disclosures to his client Mr. Thomas. The documents were delivered electronically and the expectation was for Mr. Thomas to e-sign his documents. Mr. Thomas was made aware of the hardware and software requirements prior to receiving the documents, but John's company made technology changes to this process prior to deliver of the documents. What must John do?
John must notify his client of any hardware or software requirements due to the technology change
The total interest percentage TIP is found on what two disclosures
LE and CD
What three federally required disclosures must be provided within 3 business days of a receipt of a loan application by a mortgage broker for a purchase money loan
LE, Homeownership counseling organization list, home loan toolkit
A lender making a secured loan for a real estate purchase is also known as
Mortgagee
The unpaid interest which is added to the mortgage principal in a loan where the principal balance increases rather than decreases because the mortgage payments do not cover the full amount of interest due. Which of the following best represents the preceding definition?
Negative amortization
When must a mortgage broker provide a notice of action take to an applicant
No later than 30 days after receipt of completed application for credit
In accordance with the guidelines of Fannie Mae, all of the following are considered security instruments except
Note
You have a client that has qualified for a 30-year fixed rate purchase money first lien mortgage on a secondary home. The client will be putting down $70k. Their loan amount will be $230k. A couple weeks before closing, it's determined the client requires a pest inspection, so you refer them to an affiliate. They ultimately decide not to choose this affiliate. Given this info, which disclosure will the client not get?
Notice of right to cancel PMI
Which of the following is not violation of RESPA
Payment for services actually rendered in an amount consistent with the reasonable value of such services
Which of the following best describes a lender rebate
Payment made by a lender when originating a loan with a higher than market interest rate which is used to offset costs for the borrower
Prepaid finance charges include all of the following EXCEPT
Pest inspection
What does the P stand for in PITI
Principal
Which of the following interactions with an appraiser would be considered appropriate
Providing the sales contract to help ensure the appraiser has pertinent information regarding the property
A residential mortgage loan is a loan for personal, family, or household use that is secured on a dwelling by a voluntary contract. Which of the following will not secure an interest in the property for a residential mortgage loan?
Sales contract
Which of the following is a Fannie Mae Function
Securitizing mortgage backed securities in the secondary market
Which of the following documents is always signed at a home purchase closing when a new loan is involved
Security instrument
Which federal law requires the mortgage broker to provide the borrower with a disclosure statement showing the total cost of the loan, including finance charges and the APR
TILA
How are the conforming loan limits set every year
The FHFA uses the october-to-october percentage increase/decrease in the avg housing prices in the Monthly Interest Rate Survey to adjust the conforming loan limits for the subsequent year
Interest accrues throughout the life of a mortgage loan. The entire amount of interest encompasses this concept best known as
The aggregate amount
Bob the broker has completed an application over the phone with Jane for a refinance on her primary home. During this process, Bob explained to Jane that she can sign the necessary documents in two different ways either on his protected website or in paper copies that he can mail to her immediately. Which law's provisions require that Bob make this disclosure?
The electronic signatures in Global and National Commerce Act
In almost all mortgage fraud, who becomes the injured party
The lender
Which of the following is Prohibited when making a loan agreement with a prospective borrower for the assistance in finding a mortgage loan
The loan agreement requires the payment of a finder's fee prior to the consummation of the loan
According to the record of retention rules of RESPA, which of the following statements is correct
The mortgage servicing disclosures statement must be retained for five years
Which of the following is NOT true regarding the state regulatory authority in relation to the Safe Act of 2008
The state authority may create laws to amend the Safe Act
Which of the following is true regarding the following statement in an advertisement: "Lowest rates available for all credit types"
This statement is considered a deceptive practice
what is the purpose of the surety bond?
To act as insurance to pay fines or penalties that the lender is not able to pay on their own
During the application process with a new client, Bob the broker is about to ask the client about income. Which of the following questions or statements are permissible under ECOA
To qualify you for the best loan possible, I need to know how much income you're planning on using, if any of it is related to child support or alimony, you don't need to let me know unless you're using it to qualify
The consumer credit protection act produced which act
Truth in Lending Act
Which of the following is true regarding USDA loans
USDA loans allow individuals to build a home
In which of the following situations can an MLO work with an unregistered or unlicensed mortgage broker or lender
Under no circumstances
Under what circumstances is an independently contracted loan processor or underwriter NOT required to obtain a mortgage loan originators license?
Under no circumstances
Fannie Mae 1003 is the form number for
Uniform Residential Loan Application (URLA)
What is the best way to describe an individual who acts completely as a volunteer when negotiating mortgage loan terms?
Unlicensed mortgage loan originator
Certificate of Eligibility is required under what loan
VA
A mortgage processor's role includes which of the following?
Verifying information from the initial application
Eric is a broker who has had his own brokerage business for a couple years. In order to make sure he stays current on mortgage fraud trend, he routinely runs a self test within his company. Quality control measures are required by which following laws
all the above (GLBA,REG V and REG B)
The minimum down payment for FHA loans is 3.5% of the lesser of which
appraised value or purchase price
Under the Safe act who can deny, revoke, or suspend a MLO license
the state authority only
The two parties to a real estate transaction that can receive a title insurance policy are the purchaser and who
lender
Which of the following accurately portrays a LTV calculation
loan amount divided by the lesser of property value or sales price
A mortgage loan originator's NMLS number must be placed on which of the following types of advertisements and documents
loan applications, business cards and websites
Jim has obtained approval for financing through Layla's loan shop. Jim puts an offer on a home. The seller refuses the offer due to concerns with the lender's ability to close the loan by scheduled closing date. Which of the following laws is the seller violating
none of the choices from RESPA, ECOA, and FHA
A limit on the amount a payment can be changed at the end of each payment adjustment period. It can be a percentage of the previous payment, a fixed dollar amount, or a specified change in the interest rate of which the payment was calculated. It does not have to be the same as an interest rate cap. Which of the following terms best represents the preceding definition
payment cap
When a mortgage broker willfully misleads a borrower in order to increase their profit this is called
predatory lending
What is the best way to describe the act of helping a broker conduct business regarding taking applications without a mortgage originator license
prohibited
Lenders are not allowed to provide the appraiser with any of the following except
purchase contract
The person who prepares the closing disclosures and helps the borrower make sure they know what they are signing is known as who
settlement agent
Which of the following best describe an immediate family member
spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild, stepsibling, and adoptive relationship
According to TILA, if an advertisement for a specific loan states a payment amount, it also must include
term of the loan, finance charge, and number of payments
In accordance with ECOA, a creditor cannot inquire as to whether income is derived from public assistance unless what
the creditor discloses to the applicant that such income need not be revealed and the applicant wants public assistance income to be considered by the creditor as a basis for payment of credit requested
Which of the following is not true regarding the responsibilities of the state regulatory authority
the state authority can order a prison sentence upon a LO for compliance failure
When can the loan servicer charge for a loan escrow account statement
under no circumstances
When is the lender permitted to charge a fee for preparing a settlement statement
under no circumstances
