VIQ

USDA loans include a guarantee fee, what is the initial guarantee fee?1%2%.35%.41%

1%

Loan documentation requires full bankruptcy papers if it occured within the past -----

2-4 years

What is CLTV percentage of mortgage insurence waiver?

90%

The SAFE Act implements:?a) The ceiling of standards to which mortgage professionals must adhereb) A floor of standards to which individual states may add their own qualificationsc) Guidelines to which mortgage professionals are encouraged to adhered) Guidelines to which individual states may choose to enforce

A floor of standards to which individual states may add their own qualifications

All but which of the following are types of QM's?a) Generalb) Adjustablec) Balloon-Paymentd) Temporary

Adjustable

The Latin doctrine of "Respondeat Superior" refers to:a) A mortgage professional's sole accountability for his or her actionsb) An employer being as culpable for its employee's actions as the employeec) An employer being solely responsible for its employees' actionsd) An employer not being responsible for the actions of its employees

An employer being as culpable for its employee's actions as the employee

----------- is when the loan is due to adjust

Anniversary date

Which of the following is not excluded from higher priced mortgage considerations? a) A conventional/conforming loan on a two-family property b) A reverse mortgage c) An eight-month bridge loan d) A construction loan used to build a property from scratch

Answer: a) Exclusions from higher priced mortgage loan considerations consist of loans that are used to finance the initial construction of a dwelling, bridge loans with terms of 12 months or less, reverse mortgages, and home equity lines of credit

A mortgage originator receives a call from a friend who wishes to rent a house to a potential renter. The friend does not wish to purchase a credit report but has authorization to access the applicant's credit. To avoid having to pay for a report, the friend asks the loan originator to order the potential tenant's credit report on his behalf. The loan originator agrees to and does so. Consequently, the loan originator: a) Violated the FCRA b) Complied with the law since the applicant gave permission c) Complied with the law but should bill his friend for the cost of the credit report d) Violated the FACTA

Answer: a) The FCRA requires anyone accessing another individual's credit to have both permission as well as a permissible purpose. Although both individuals technically had permission, accessing the credit report did not satisfy a permissible purpose since the subject of the credit report was not in pursuit of that originator's mortgage financing.

Which of the following is not an ARM component?a) Termb) Indexc) CAPd) Frequency of Change

Answer: a) The four ARM components are: frequency of change, index, margin, and CAPS.

A ______ settlement is a settlement whereby funds are issued immediately after closing or, when applicable, immediately after rescission expires. A/an ______ settlement is a settlement whereby funds are issued after the documents have been recorded into public record. a) Wet / dry b) Reclusive / Incorporative c) Dry / wet d) Salient / restricted

Answer: a) Wet settlements issue the funds immediately after settlement or, when the transaction is rescindable, immediately after the rescission period expires. Dry settlements record the documents into public record before issuing the funds. Typically, east coast settlements are wet and west coast settlements are dry.

Qualified mortgages limit pre-payment penalties to: a) Two percent of the balance during the first year b) Five percent of the balance for the life of the loan c) One percent of the balance up through year four d) QM's prohibit pre-payment penalties

Answer: a) With the implementation of QM's through the Dodd-Frank Act, prepayment penalties are limited to: With the implementation of QM's through the Dodd-Frank Act, pre-payment penalties are limited to 2% of the outstanding balance during the loan's first two years, 1% of the loan's outstanding balance during the third year, and no penalty thereafter.

A "party to the transaction" is: a) Anyone who signs the Note b) Anyone who signs the Mortgage c) A co-signer d) An obligated, non-owner

Answer: b) Anyone who has an ownership interest in a property being financed is considered a "party to the transaction." All "parties to the transaction" must sign the Mortgage or Trust Deed acknowledging and consenting to the lien being attached to the property in which they maintain an ownership interest.

Under FACTA, which of the following is not a CRA obligation? a) Creating a fraud alert b) Requiring permission to obtain an individual's credit report c) Disclosing credit scores d) Issuing free credit reports

Answer: b) Requiring permission to obtain an individual's credit report is a CRA obligation under FCRA not FACT

The legal description of the property being financed appears on the:a) Mortgagee Clauseb) Title binder schedule Ac) Closing Disclosured) Title binder schedule B

Answer: b) The schedule A of a title insurance binder describes who is listed as the owner or owners of record on a property and also provides the property's legal description.

Which of the following is permitted when servicing or originating a HOEPA loan? a) Increasing the interest rate in the event of default b) Disbursing funds directly to the contractor when the loan purpose is home improvement c) Enforcing a pre-payment penalty d) Originating a 3/23 balloon loan

Answer: c) HOEPA loans may include pre-payment penalties as long as the pre-payment penalty occurs within the first five years (other conditions also apply). Increasing the rate after default is never permitted. When the purpose of the loan is for home improvement, the funds must be disbursed either directly to the homeowner, in the form of a check made payable to both the homeowner and the contractor, or to a third-party escrow company agreed upon by all parties. HOEPA balloon loans are permitted as long as the balloon component does not call the loan within the first five years.

What constitutes a "covered account" as referenced under the FTC's Red Flags Rule? a) An account maintained by a creditor, intended for commercial use, and designed to permit multiple payments b) An account maintained by a private individual, intended for personal use, and designed to permit multiple payments c) An account maintained by a financial institution, intended for family use, and designed to permit multiple payments d) An account maintained by a creditor, intended for household purposes, and designed to be repaid through a one lump-sum payment

Answer: c) In accordance with the FTC's Red Flags Rule, a covered account includes any account that is offered or maintained by a financial institution or creditor, is intended for personal, family, or household purposes, and is designed to permit multiple payments or transactions.

TRID applies to all but which of the following types of transactions: a) First mortgage loansb) Adjustable rate mortgagesc) Home equity lines of creditd) Investment property financing

Answer: c) TRID applies to all types of mortgage financing with the exception of home equity lines of credit, reverse mortgages, mortgages not secured by real property, loans made by persons not considered creditors, certain no-interest second mortgage loans used for down-payment assistance, property rehabilitation, energy efficiency, and foreclosure avoidance.

If a borrower has a mutual fund, how much of the fund's face value may be used to satisfy reserve requirements?a) 70%b) 60%c) 100%d) 80%

Answer: c) When used solely to satisfy reserve requirements, 100% of a mutual fund's face value may be considered.

Which of the following documents must be issued in accordance with FACTA? a) An identity theft disclosure notice b) A notice of right to rescind c) An authorization to release informationd ) A notice of credit score

Answer: d) FACTA requires lenders to inform applicants of their representative credit score through a separate disclosure issued at the time of application. The notice of right to rescind is a requirement of TILA and the authorization to release information is signed by the borrower at the time of application in order to authorize third parties to release documentation necessary for the lender to complete its underwriting analysis. There is no disclosure known as the identity theft disclosure notice.

A customer falsely representing his income is an example of: a) Fraud for profit b) Fraud for housing c) Fraud for profit and making a false statement to a financial institution d) Fraud for housing and making a false statement to a financial institution

Answer: d) Fraud for housing occurs when an individual falsely represents their qualification credentials in pursuit of home financing. Additionally, falsely representing one's income constitutes making a false statement to a financial institution. Both are federal crimes.

How do principal pre-payments remitted against a fixed-rate loan balance affect the loan?a) By reducing the termb) By reducing the future payment amountc) By reducing the overall interest expensed) By reducing the term and overall interest expense

Answer: d) Unlike remitting a principal pre-payment against an adjustable rate loan balance, doing so against a fixed-rate loan balance accelerates the amortization while reducing both the loan's term and overall interest rate expense. The payment amount is never affected.

Borrower - legal title, Lender - a lien Under a trust deed and note, what interests do the borrower and lender hold in the property which is used as collateral?Borrower - legal title, Lender - equitable titleBorrower - legal title, Lender - a lienBorrower - equitable title, Lender - legal titleBorrower - lien, Lender - legal title

Borrower - legal title, Lender - a lien

Which of the following is not true about the Dodd-Frank Act: It created the CFPB It prohibits unfair lending practices It expanded consumer protection on high-cost mortgages It created the NMLS

D.The Conference of State Bank Supervisors (CSBS) and American Association of Residential Mortgage Regulators (AARMR) created the NMLS.

What document conveys property ownership?a) The mortgageb) The promissory notec) The closing disclosured) The deed

Deed

What act created CFPB?

Dod Frank Act and Consumer Finance Protection Act

What federal law created the idea of a qualified mortgage?

Dodd-Frank

What constitutes a good payment history in terms of PMI removal?a) No late payments within the previous 12 monthsb) No 60-day late payments within the previous 24 months and no 30-day late payments within the previous 12c) No 60-date late payments within the previous 24 monthsd) No 30-day late payments within the previous 24 months and no 60-day late payments within the previous 12

During the most recent 24 months, the customer may not have had any 60-day late payments, and, within the most recent 12 months, the customer may not have had any 30-day late payments

An investor buys a property from a homeowner facing foreclosure and agrees to lease the home to the homeowner who may remain in the house as a tenant. The rescue artists or arranged investor then pays off the amount owed in the foreclosure to acquire the deed and receives any remaining portion of the homeowner's equity. The rescue artist will re-convey the property back to the homeowner in the form of a lease or a contract for deed. This is called:Property flippingEquity skimmingShort sale fraudAffinity fraud

Equity skimming

The lender is requiring repairs on the home to be completed. Those repairs can be done after the loan closes by including them in a(n):Lender Retainer.Earnest Money Deposit.Repairs Completion Account (RCA).Escrow Holdback.

Escrow holdback

A mortgage company based in Tennessee has implemented a telemarketing campaign to increase its refinance business. Its first two weeks of calls are made to local residents, some of which are actually prior customers. If there is a violation of the Do-Not-Call Implementation Act, which federal agency would enforce any action?The FTCThe FCCThe SECFinCEN

FCC

A credit bureau failing to maintain a consumer's privacy is a violation of the: a) GLBA b) FCRA c) RESPA d) FACTA

FCRA

Without the client requesting it, a Realtor only shows properties to his client of Asian ethnicity that are located in neighborhoods primarily populated by Asian individuals. What regulation, if any, did the Realtor violate?a) ECOAb) FHAc) RESPAd) TILA

FHA

Remitting principal pre-payments to an adjustable rate mortgage in addition to the regular periodic payments, affects the ________?a) Loan termb) Overall interest expenditurec) Future payment amountd) Future interest rate

Future payment amount

As a result of the Housing and Economic Recovery Act of 2008, the regulation of the conventional GSEs was turned over to a new agency that was given broader controls to ensure responsible day-to-day oversight. Which agency was created and now oversees the activities of the conventional GSEs? FNMA FinCEN FHLMC FHFA

HERA created and installed the FHFA (Federal Housing Finance Agency) as the new "conservator" of the troubled GSEs (Fannie Mae and Freddie Mac). The FHFA's powers include the responsibility to set the conforming loan limits from year to year.

John intentionally tells the mortgage loan originator that he is working for that he only pays $1500 in child support when he pays $2000 in child support. This would be considered:Material misstatementOmissionCollusionInflation

Material misstatement

The USA Patriot Act is primarily concerned with:a) Identity theft and money launderingb) Money laundering and terrorist financingc) Terrorist financing and fraudd) Both a) and c).

Money laundering and terrorist financing

Which of the following would NOT be an acceptable trust deed rider?A condo riderAn ARM riderA PUD riderMortgage insurance rider

Mortgage insurance rider

To transfer an FHA case number, FHA will allow the originating lender to charge how much?For actual costs.5% of the loan amountno less than 1% of the loan amountNothing, unless it has been underwritten by the DE underwriter

Nothing, unless it has been underwritten by the DE underwriter

When there is a new note and the original borrower is released from all liability, this is known as transferring title by: A. Creative financing B. Assumption C. Novation D. Subject to the mortgage

Novation

If there are two borrowers on the loan but the two borrowers are unmarried, they would be considered what: Co-borrowers Co-mortgagors Title sharers Community property holder

Only borrowers who are married can be included on the same 1003 and be considered co-borrowers. If there are two unmarried borrowers, they must fill out two separate 1003s. These two borrowers are called co-mortgagors

Which of the following documents would contain the details about the loan amount, payment, when payments are due, late penalty, interest rate, etc.?MortgagePromissory noteLoan packageTrust Deed

Promissory note

In a typical mortgage loan, what are the mortgage note and the property called? Financing instrument/deed Hypothecation/security Lien/appraised value Security instrument/collateral

Security instrument/collateral

Reverse mortgage loan servicing cost cap

Servicers (who are servicing the HECM) can charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate or has a fixed interest rate. They can also charge a monthly servicing fee of no more than $35 if the interest rate adjusts monthly

Of which of the following third-party service providers would a lender be prohibited from insisting on the specific use? a) Flood certification provider b) Settlement agent c) Lender legal representation d) Credit repository

Settlement agent

When there is no new note and the original buyer retains all the liability, this is known as transferring title by: A. Creative financing B. Assumption C. Novation D. Subject to the mortgage

Subject to the mortgage

Under what law does the Ability to Repay Rule fall under?TILARESPADodd-FrankECOA

TILA

If two people are married, how do they likely hold title? Tenancy by the Entirety Joint Tenancy Tenancy in Common Ownership in severalty

Tenancy by the Entirety is a form of co-ownership that involves only owners who are husband and wife, with each having an equal and undivided share of the property. This form of ownership includes the right to survivorship with the property automatically going to the surviving spouse.

When should escrow closing notice be provided to the consumer?

The Escrow Closing Notice must be provided no later than three business days before the consumer's escrow account is cancelled

All of the following are true about the FTC Red Flags Rule except: Protect sensitive personal data Require the implementations of a written plan to detect and prevent industry theft The penalty for noncompliance is $3,500 It requires lenders to create specific disposal policies to ensure a borrower's information is properly disposed of

The Red Flags Rule is specifically about protecting sensitive personal data from being exploited and involved in identity theft. The Disposal Rule is a separate rule that requires lenders to create specific disposal policies to ensure that a borrower's information is properly disposed of.

Regarding a balloon loan, which is the most correct? The balloon is disclosed to the client on the HUD-1 settlement statement. The balloon is disclosed to the client on the insurance documentation. The balloon is disclosed to the client on the Trust Deed. The balloon is disclosed on the Note and the Trust Deed Rider.

The balloon is disclosed on the Note and the Trust Deed Rider.

What is a mortgage or trust deed? The document that passes title from the borrower to the lender on the property being collateralized The instrument that makes the lender a partial owner of the collateralized property The document that creates a lien against the property It is the contract that establishes the conditions for the loan and the repayment of money

The document that creates a lien against the property

Reverse mortgage loan origination cost cap

The lender can charge the greater of $2,500 or 2% of the first $200,000 of their home's value plus 1 percent of the amount over $200,000. The cap on HECM origination fees is $6,000

There are two exceptions when dealing with an adverse action notice, what happens if the lender provides a counteroffer and the applicant does not accept it? The lender has 90 days to provide the adverse action notice The lender does not have notify the applicant of the adverse action notice The lender has 60 days to provide the adverse action notice The lender is required to provide a second counteroffer

The lender has 90 days to provide the adverse action notice

What is the purpose of title insurance? To provide coverage for title to the property To provide coverage in case of fire To provide coverage for the chain of title To provide coverage for the lender or owner

To provide coverage for the lender or owner

A history showing the title changes regarding property is required by an underwriter for what purpose? To verify the absence of property flipping TO determine if there have been any frogeries To establish that the boundaries are correct To give a chronological record of all liens

To verify the absence of property flipping

When using the comparison approach, the appraiser is attempting to: adjust the subject property to the comparable. make neighborhood adjustments to determine the value of the property. adjust the comparable to the subject property. find a property that is identical to the subject property.

adjust the comparable to the subject property

On which of the following documents must the MLO's name and unique identifier appear? a) Note, Mortgage, Closing Disclosure, and URLA b) Mortgage, Loan Estimate, ABAD c) Closing Disclosure, Mortgage, Transfer of Servicing Disclosure, Note, and Loan Estimate d) URLA, Closing Disclosure, Mortgage, Loan Estimate, and Note

d) URLA, Closing Disclosure, Mortgage, Loan Estimate, and Note

When a trust deed (or deed of trust) is recorded, which of the following is true?Ownership is conveyedA lien is releasedAn lien is createdIt verifies both the lender and borrower signed the document

lien is created

Which of the following is a type of ARM cap?a) Life-of-loanb) Credit scorec) Interest deductibilityd) Frequency of change

life of loan

If a sheriff's sale is held, the document that dictated the foreclosure sale was a: mortgage. due-on-sale clause .trust deed and note. deed in lieu of foreclosure.

mortgage

What are home possible advantage mortgage used for?

no cash out refinance of existing mortgage

Which of the following documents establishes the debt?a) The mortgageb) The deedc) The promissory noted) The closing disclosure

nswer: c) The note is the obligatory instrument describing the terms of the loan and which, by signing, the borrower obligates himself to the debt.

What is the primary purpose of the primary market?To pool loans and sell them to investorsTo sell loansTo originate loansTo purchase loans

originate loans