Missed Loan Officer Exam Questions

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A 360/180 loan typically has A) a balloon payment. B) full amortization.

A Direct Endorser is a lender who is authorized to underwrite what type of loan applications? A) FHA-insured B) conforming

A ____ is a financial encumbrance that is described as a nonpossessory financial interest in property. A) lien B) mortgage

A ____ loan is a loan that exceeds the maximum loan amount established by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac conforming mortgage loan limits. A) jumbo B) high-cost

A _____ is a form of pre-paid interest that a lender charges to increase the yield on a lower-than-market interest rate loan. A) discount point B) lender credit

A borrower is purchasing a home for $120,000 and closing costs total 4% of the loan amount. The seller has agreed to contribute half of the buyer's closing costs. How much cash does the borrower need at closing in order to obtain an LTV of 85%? A) $20,040 B) $20,400 C) $20,800 D) $18,360

A borrower is purchasing a new home and would like to close the mortgage loan financing the purchase as fast as possible. According to the applicable rules and guidelines under Regulation Z, if the borrower closes his loan on Monday, January 8th, when can the loan fund? A) January 8 B) January 12

A borrower who has a FICO score below 580 is required to make a minimum down payment of at least _____% for an FHA-insured loan. A) 10% B) 3.5%

A construction loan is categorized as nontraditional under the SAFE Act because it is a type of A) short term loan. B) negative amortization loan.

A higher-priced mortgage loan is one that A) uses the average prime offer rate as an index to compare the annual percentage rate. B) includes finance charges greater than 5% of the loan amount.

A licensed MLO may credit a 2-hour online course in ethics toward his continuing education renewal requirement A) once in the same calendar year in which the course is taken. B) never, because ethics is not a required topic for continuing education. C) once every year the course is taken. D) once in the calendar year after the course is taken.

A licensed mortgage loan originator must complete at least eight hours of education reviewed and approved by the A) NMLS. B) state regulatory authority.

A licensed mortgage loan originator must comply with requirements for license renewal A) annually by December 31. B) bi-annually by December 31. C) annually by the anniversary date the license was first issued. D) annually by November 1.

A mortgage loan processor distributes a company business card with her name on it along with the unique identifier of the mortgage lender she works for. The loan processor handwrites a message on the card which states, "I can help you get a loan." This employee is A) committing a prohibited act due to being unregistered or unlicensed as an MLO. B) directly soliciting loan business under the unique identifier of a licensee which is legal.

A registered mortgage loan originator refers to A) an MLO who is registered with and maintains a unique identifier through the NMLS. B) an MLO who is licensed under the home state's regulatory authority.

A typical reverse mortgage becomes due when the last surviving borrower dies, sells the home, or ceases to live in the home for ____ consecutive months. A) 12 B) 6

A(n) ____ clause prevents someone from assuming a loan without lender permission. A) alienation B) power of sale

According to the SAFE Act definition, a nontraditional mortgage loan is A) any mortgage loan that is not a 30-year fixed-rate mortgage loan. B) any 30-year fixed-rate mortgage loan obtained through the FHA or VA.

All of the following are available payment plans for adjustable-rate HECMs EXCEPT a______ payment plan. A) single disbursement lump sum B) scheduled monthly

All of these are duties granted to a state regulatory authority under the SAFE Act EXCEPT for the duty to A) approve pre-licensing and continuing education course offerings and course providers. B) examine or investigate licensees in a systematic manner based on identified risk factors or on a periodic schedule. C) establish procedures for appropriate enforcement and/or disciplinary actions. D) approve or deny mortgage loan originator license applications.

All of these examples illustrate an individual engaged in loan origination activities that do NOT require licensing EXCEPT A) Kirk, who provides financing repeatedly and with habitualness for the sale of multiple properties he owns. B) Jen, who originates loans as part of her duties as an employee of a non-profit organization.

An FHA-insured loan is an example of A) non-conventional financing. B) conventional financing.

An MLO hired a third-party independent processing company to perform processing functions on their loan files. Loan files for applicants who were not approved were disposed of in a dumpster at the back of the processing company's office. The processing company violated A) FACTA. B) HMDA.

As define by the SAFE Act, who is NOT "taking" a loan application? A) Diane describes for a borrower the loan application process without any discussion of specific loan products. B) Cade assists a borrower in filling out an application by explaining the residential mortgage loan terms in order to reach a mutual understanding of these loan terms.

As defined and used throughout TILA and Regulation Z, ____ is a measure of the cost of credit, expressed as a nominal yearly rate. A) annual percentage rate B) finance charge

As set forth by Regulation Z, Section 32, what is NOT a trigger used to define a high-cost mortgage loan? A) excessive prepayment penalty B) excessive annual percentage rate C) excessive points and fees D) excessive total finance charge

As set forth by the SAFE Act, mortgage ____ is defined as an individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain. A) loan originator B) broker

Assets are typically classified as liquid or not liquid. Which of the following is NOT a liquid asset? A) rent credit B) mutual fund C) stock or bond D) certificates of deposit

Assets are typically classified as liquid or not liquid. Which of the following is NOT a liquid asset? A) secured borrowed funds B) certificates of deposit

At least ____ days before a servicer assesses a premium charge or fee related to force-placed insurance on a borrower, the servicer must deliver to a borrower a written notice requesting the borrower provide hazard insurance information for the borrower's property. A) 45 B) 60

At mortgage loan settlement or at least 45 days from settlement, the borrower must receive an Initial Escrow Statement that itemizes the estimated taxes, insurance premiums, and other charges anticipated to be paid from the escrow account during the first ___ months of the loan. A) 12 B) 6

Bobbi applied for a $300,000 mortgage loan with DI Mortgage Company, a mortgage broker. DI then submitted the loan application to Whitmore Lending, a mortgage bank, which approved Bobbi for a loan. Assuming all other points and fees charged by the lender totaled $10,000, what is the maximum fee that DI would be allowed to receive without triggering HOEPA? A) $5,000 B) $3,000 C) $6,000 D) $1,000

Borrower Juanita signs the note and mortgage for a refinance on her principal residence on Thursday, Dec. 31. As set forth by TILA and implemented by Regulation Z, what is the earliest day the funds for this loan can be disbursed? A) Wednesday, Jan. 6 B) Saturday, Jan. 2 C) Monday, Jan.4 D) Tuesday, Jan. 5

Borrowers have a right to a copy of the appraisal report used in the decision process promptly upon completion of the appraisal or no later than ____ business days before consummation for closed-end credit. A) three B) five

Bruce is purchasing a duplex for $275,000. He has given $2,000 in earnest money and the closing costs are $3,750. The lender has agreed to a 75% LTV. The seller has agreed to pay $2,000 in closing costs. How much does Bruce need to bring to closing? A) $68,500 B) $72,500

Consummation may occur on or after how many business days (using the precise definition of business day) after the delivery or mailing of the initial Loan Estimate? A) seven B) three

DeDe got a mortgage loan where she pays only interest for the first five years, then begins paying both interest and principal for the next 25 years. This arrangement could best be referred to as a(n) A) hybrid loan. B) interest-only loan. C) graduated payment loan. D) convertible loan.

For VA-guaranteed loans, which statement is TRUE? A) The funding fee can be financed. B) All closing costs can be financed.

For an owner-occupied refinance transaction subject to the Regulation Z right of recession, if the transaction closes on a Monday, assuming there are no federal holidays during the week, when does the rescission period expire? A) Thursday B) Friday

For first-time homebuyers, the Fannie Mae HomeReady loan requires a ___ down payment. A) 3% B) 5%

For license renewal, a mortgage loan originator is required to complete a minimum of ____ hours of continuing education on the topic of federal law. A) 3 B) 8

George is starting his own business in this state. Previously, George was a director, employed by a mortgage lending company in another state whose principal's lending license was revoked for violations associated with making improper disclosures and misleading statements to borrowers. George was not personally convicted. Will George likely be granted a mortgage lender license in this state? A) It is not likely that he will be granted a license since George served as a director for a mortgage lending company whose license was revoked in another state. B) It is likely he will be granted a probationary license since George was not personally convicted of the crime in another state.

HMDA is implemented by Regulation A) C. B) B.

If a loan includes an escrow account, the lender is allowed to require A) RESPA B) TILA

If formerly licensed MLO Rod failed to maintain a valid license for a period of ___ years, he is required to retake and pass the qualified SAFE MLO pre-licensing exam to obtain an MLO license. A) five B) two

If the amounts paid by a borrower at closing exceed the amounts disclosed on the Loan Estimate beyond the applicable tolerance threshold, the lender must refund the excess to the borrower and mail corrected disclosures reflecting that refund within how many calendar days after consummation? A) 60 B) 3

In a fraud for property scheme, it is likely that A) the borrower seeks real estate ownership. B) illegal property flipping occurs. C) a group of individuals are colluding to gain from the scheme. D) the borrower doesn't intend to repay the loan.

In exchange for a higher interest rate, ____ offset(s) closing costs and lower the amount a borrower pays at closing. A) lender credits B) discount points

In the "About Your Finances" section of the URLA, the borrower is to identify if she has conveyed title to any property in lieu of foreclosure in the past ___ years. A) seven B) ten

In what section of the Closing Disclosure is a lender to record charges paid by the borrower to the lender, such as processing and rate-lock fees? A) Origination Charges B) Services Borrower Did Not Shop For

Jim notices that the applicant's W-2s look funny. Upon closer examination, he sees that the amount withheld for Social Security is much too low for the supposed income. This is MOST likely a red flag indicator of possible A) documentation fraud. B) identity theft.

Jim's gross monthly income is $4,500 per month and his wife Jan's is $3,700. They have a car payment for $320 a month and $175 a month in credit card debt. They also have a 401K loan repayment of $475 with eight months remaining. What is the maximum monthly payment they qualify for, including PITI, with a conforming loan and acceptable ratios of 28%/36%? A) $2,296 B) $1,326

Joe has a property that appraises for $189,000. His first mortgage rate is 4.75% and his second mortgage rate is 15%. He has decided that he wants to leave his $53,000 first mortgage alone and only refinance the second. He qualifies for an 85% CLTV. His second mortgage is for $25,000 but he wants cash to finish his basement. How much cash is available if his closing costs are $1,500? A) $81,150 B) $109,500 C) $100,000 D) $134,150

Joe has an ARM with an initial rate of 6% and a rate cap of 2/6. What's the highest his interest rate can be over the life of the loan? A) 12% B) It depends on the index. C) 18% D) 8%

Johnny obtains a $300,000 mortgage loan a 5/1 interest-only ARM with a 10 year balloon at a 3% start rate, a 2% margin, and 2/6 caps. The initial monthly payment for the loan is $750. On the anniversary date of the loan, the index being used adjusts as follows: Year 1: 2.50% (initial year); Year 2: 2.75%; Year 3: 3.25%; Year 4: 3.50%; Year 5: 3.75%; Year 6: 3.00%; Year 7: 2.80%; and Year 8: 5.00%. What will be Johnny's monthly payment in year 8? A) $1,700 B) $1,250 C) $1,500 D) $1,750

Lance has been hired by Reasonable Mortgage Company to analyze information collected for processing of a residential mortgage loan. Lance's job duties suggest that he is acting as a A) mortgage processor that does not require licensing. B) mortgage servicer that does not require licensing.

Laura falls in love with a house and is desperate to buy it. The asking price is $235,000. She makes an offer of $230,000 that is accepted and the house appraises for $225,000. If her lender is willing to give her an 80% LTV loan, what is her required down payment if her offer is accepted? A) $50,000 B) $45,000

Lender Lou needs to record on the URLA two full years of employment for a potential borrower. The borrower must provide an explanation for any gaps in employment that are ____ days or more. A) 30 B) 120

Lisa is applying for a loan to purchase a home. Under the terms of Reg Z, how long will Lisa have to rescind the loan after she signs the loan closing documents? A) 0 days; there is no right of rescission B) 30 days C) 24 hours D) 3 business days

Marian has an adjustable-rate mortgage loan that has an initial interest rate of 4%. The margin on the loan is 2%. If the index is 5% in the second year, what is the interest rate charged to Marian? A) 7% B) 6%

Mortgage broker Carrie was eager to finish up with a customer so that she could make her massage appointment. She was sure that the terms of the loan were right for the customer, but still, the customer felt pressured to sign papers without feeling as though he truly understood all of the terms. Carrie's conduct might best be A) negligence. B) actual fraud.

On the Closing Disclosure, applicable secondary market charges passed onto the borrower must be properly identified as A) origination charges. B) part of a finance charge.

Per Regulation B, lenders must notify applicants of their credit status and reasons for action taken within __ calendar days after taking adverse action on an incomplete application unless notice is provided that the application is incomplete. A) 30 B) 45

Per the Real Estate Settlement Procedures Act, what situation BEST describes an affiliated business arrangement that requires disclosure? A) A lender/broker has an ownership interest in a settlement service provider used to process a loan for a fee in one of its transactions. B) A settlement service provider disguises its true ownership through the use of a corporation name. C) Business is referred back and forth between companies in exchange for a pre-arranged fee per transaction. D) A mortgage broker pays a fee to real estate agents for each client they send them.

Phil is refinancing the mortgage loan secured by his home that is his primary residence. After he signs the loan papers, how much time does he have to change his mind? A) 3 business days B) 30 days C) 3 years D) Phil has no right of rescission.

Registered mortgage loan originator refers to A) an MLO who is registered with and maintains a unique identifier through the NMLS. B) any licensed MLO whose license has been suspended or revoked by the state regulatory authority. C) an MLO who is licensed under the state regulatory authority but has an office that is in another state. D) any licensed MLO that is employed by a lender licensed under the state regulatory authority.

Regulation B requires that applicants must be made aware of their right to receive an appraisal report created as the result of their mortgage loan application. This disclosure must be mailed or delivered to applicants not later than A) 3 business days after the lender receives a complete application. B) 4 business days prior to consummation.

Regulation B states that a creditor must provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. For closed-end credit, the appraisal copy must be provided to the applicant at least ____ business days prior to consummation of the transaction. A) 3 B) 10

Regulation C implements the A) Home Mortgage Disclosure Act. B) Fair Credit Reporting Act. C) Community Reinvestment Act. D) Truth in Lending Act.

Regulation Z Section 36 sets forth requirements for compensating mortgage loan originators. Which statement does NOT reflect one of the requirements set forth in Regulation Z? A) A loan originator may receive compensation from a minimum of two persons/entities in connection with the same transaction. B) Consumers are not prohibited from accepting a higher interest rate in return for reducing closing costs.

Section 32 of Regulation Z, which governs high-cost loans, implements which federal legislation? A) HOEPA B) RESPA

So that consumers can feel confident that the information on their credit reports are accurate, the FACT Act allows consumers to request and obtain a free copy of their credit report once every A) 12 months. B) 6 months.

State regulators have the authority to do all of the following EXCEPT A) impose a prison sentence for purposeful violations of the SAFE Act that cause consumer harm. B) impose fines on persons for violations of the SAFE Act. C) deny, suspend, revoke, condition, or decline to renew a license for violations of the SAFE Act. D) order restitution against persons for violations of the SAFE Act.

Susie has been on her job for five years. She typically works 45 hours a week for $19 an hour. She is consistently paid time and a half for all overtime. What is the gross monthly income used to qualify Susie? A) $3,910.83 B) $3,705.00

Temporary authority to act as a loan originator permits which of the following to originate loans while completing any state-specific requirements for licensure? A) qualified state-licensed MLOs seeking licensure in another state B) licensees changing company sponsorship

The Loan Estimate disclosure requirement does not apply to all real estate loans. All of the following loan types are exempt from the Loan Estimate disclosure requirement EXCEPT A) home equity loans. B) home equity lines of credit.

The Mortgage Reform and Anti-Predatory Lending Act sets forth anti-predatory measures for existing high-cost mortgage loans. These measures include all of the following EXCEPT A) prohibiting high-cost loans with adjustable rates. B) restricting balloon payments.

The U.S. Department of Veteran's Affairs (VA) A) guarantees residential loans for veterans. B) insures loans for eligible veterans.

The _____ has the authority to enforce the rules found in Section 114 of the Fair and Accurate Credit Transactions Act that require certain businesses and organizations to develop, implement, and administer identity theft prevention programs. A) Federal Trade Commission B) Consumer Financial Protection Bureau

The annual percentage rate (APR) is also referred to as A) effective rate of interest. B) nominal rate of interest.

The federal government insures what type of loan? A) FHA B) VA C) subprime D) conventional

The final rule on high-cost mortgage loans (as defined under HOEPA regulations) requires an originating lender to establish and maintain an escrow account for property taxes and insurance for a minimum of ___ years. A) 5 B) 3

The interest rate stated on the financing instrument is the A) note rate. B) annual percentage rate.

The lender must determine whether or not the property is located in a Special Flood Hazard Area by using the Standard Flood Hazard Determination form endorsed by FEMA. No flood insurance is required in areas labeled A) Zone C or Zone X. B) Zone A or Zone V. C) Zone B or Zone V. D) Zone A or Zone X.

The maximum allowable mortgage for an FHA-insured loan A) varies by the county or region the home is in. B) is set by the lender.

The portion of the ARM that cannot change and is used to compute the interest rate on an adjustable-rate mortgage is known as the A) margin. B) index.

Thomas is applying to refinance his mortgage. His first mortgage is $25,000 at a 9% rate. He plans to get cash out, up to $40,000. He qualifies for an 80% LTV and his house appraises for $100,000. Shortly before closing, the title exam shows $23,000 in mechanics liens. Closing costs total $6,000. How much cash will he receive at closing? A) $26,000 B) $9,000 C) $46,000 D) $49,000

Title V of the Housing and Economic Recovery Act of 2008 is more commonly known as the A) SAFE Act. B) FACT Act. C) Red Flag Rules. D) Gramm-Leach-Bliley Act.

To be eligible for an FHA-insured loan, one must be A) a U.S. citizen, permanent resident, or non-permanent resident with a work visa. B) a first-time homebuyer.

To protect themselves, lenders use plans for disbursing construction loan proceeds to guard against overspending by the borrower. With a ______, the lender pays the borrower a percentage of funds at a set time. A) Fixed Disbursement Plan B) Warrant System

Under a one-time construction close that has taken more than 4 months to be completed, FNMA will require the borrower to A) provide new information about income, credit, and assets. B) pay a rate lock extension fee.

Under the Fair Credit Reporting Act, a consumer reporting agency may not report negative credit information that is more than ___ years old. A) 7 B) 10

Underwriters on loans guaranteed by the VA do NOT consider A) the housing expense ratio. B) residual income.

What entity has supervisory authority over nonbank mortgage originators and servicers, payday lenders, and private student lenders of all sizes? A) Consumer Financial Protection Bureau B) Nationwide Mortgage Licensing System & Registry

What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves? A) Fair Housing Act B) Equal Credit Opportunity Act

What form shows the income of a self-employed applicant that is part of a company that is a partnership? A) K-1 B) Schedule C

What is NOT a purpose of HMDA? A) allow the creditor to determine the risk of the loan by reviewing the race, sex, and ethnicity of the borrower B) aid the public officials in distributing public funds to attract investments from the private sector to geographical areas where it is needed

What is the guideline regarding length of history for a second job to be included in qualifying income? A) two years B) one year

What is the largest component of a credit score? A) payment history B) amounts owed

What is the primary purpose of the Fair and Accurate Credit Transactions Act? A) protect consumers from identity theft B) ensure that consumers' credit information is accurately maintained and recorded C) regulate credit bureau reporting obligations D) prevent the funding of terrorist operations

What section of Regulation Z sets forth requirements for loans that meet higher-priced mortgage loan criteria? A) Section 35 B) Section 32

What type of loan is BEST defined as a loan used in a mortgage fraud scheme that is a total fabrication with fictional property as non-existent collateral, fictional buyers, or straw buyers? A) air B) silent second

When a clerical numerical error has occurred to the Closing Disclosure and the initial Closing Disclosure has been delivered to his borrower, MLO Wyatt must A) make redisclosure. B) deliver a revised Closing Disclosure and apply a new three-day waiting period before consummation.

When a consumer calls an MLO with an inquiry about mortgage loan products and terms, what is the name of the process that the MLO can complete that is non-binding on the part of the MLO but allows the MLO to collect basic information to let the consumer know if it looks favorable that she will be approved? A) pre-qualification B) trial decision C) pre-approval D) underwriting

When filling out the loan application, a borrower that has ownership interest in the business that employs her should be marked as self-employed when that interest reaches what percentage? A) 25% B) 1%

When preparing a Loan Estimate, commissions of real estate brokers or agents are listed in what subsection? A) Other B) Prepaids

When the broker negotiates a higher rate than the lender offers, the lender pays the broker A) yield spread premium. B) a wholesale rate.

Which act led to the establishment of the Nationwide Mortgage Licensing System and Registry for the residential mortgage industry? A) SAFE Act B) TILA

Which activity is considered a significant stabilizing influence of the secondary mortgage market? A) standardization of loan criteria B) fluctuation of interest rates

Which federal regulation limits the length of time that adverse collection information may appear in a consumer's credit report? A) Regulation V B) Regulation B

Which mortgage industry insider is least likely to be involved in a fraud scheme using inflated property values? A) title company officer B) mortgage broker C) appraiser D) real estate agent

Which of the following Regulation ensures lenders use an annual percentage rate so that the borrowers have the information they need to make informed comparisons? A) Regulation Z B) Regulation C

Which of the following allows a borrower to make a tradeoff of paying more upfront costs to receive a lower interest? A) discount points B) yield spread premium C) lender credits D) lock-in agreement

Which of the following information is NOT required to submit a complete mortgage loan application that will trigger federal application disclosures? A) most recent two months of bank statements B) address of the subject property

Which of the following is NOT a disclosure that is typically provided at or after settlement of a mortgage loan? A) AfBA Disclosure B) Initial Escrow Statement

Which of the following is NOT a feature of the USDA Section 502 Direct Loans? A) a payback period capped at 30 years B) no down payment

Which of the following is NOT a loan disclosure that a lender can provide on a Closing Disclosure? A) right of lender to change insurance payment B) negative amortization feature of the loan C) partial payment feature of the loan D) assumption rights of lender if property is sold or transferred

Which of the following is NOT a mandate by the Federal Trade Commission? A) Advertisements must have a time period listed for a fixed-rate loan advertised. B) Advertisers must support their claims by providing evidence and documentation.

Which of the following is NOT exempt from the restrictions set forth by Section 32 of Regulation Z for high-cost mortgage loans? A) secondary lien secured by a residential investment property B) reverse mortgage C) transaction to finance the initial construction of a dwelling D) transaction originated by a Housing Finance Agency, where the Housing Finance Agency is the creditor for the transaction

Which of the following is an example of a subordinate loan? A) home equity loan B) purchase money mortgage

Which statement is TRUE as it relates to how a lender determines if the settlement charge goes on the Closing Disclosure in Section B (Services Borrower Did Not Shop For) or Section C (Services Borrower Did Shop For)? A) If borrower Ellie chose the provider from a written list, the fee goes in Section B of the CD. B) If borrower Ellie chose the provider from a written list, the fee goes in Section C of the CD. C) If borrower Ellie was given a written list but decided to go with the lender's default provider, the fee goes in Section C of the CD. D) If a provider fee was listed in Section C of the LE, the fee always goes in Section C of the CD.

While there are no upfront or monthly mortgage insurance premiums required for VA-guaranteed loans, borrowers must pay a one-time variable funding fee at closing for guaranteeing the loan. The fee amount is based on all of the following EXCEPT the A) appraised value of the property. B) amount of any down payment.

Who is NOT subject to Section 114 of the Fair and Accurate Credit Transactions Act that sets forth the identity theft red flags rule? A) doctors B) telecommunication companies C) automobile dealers D) utility companies

Who is NOT subject to the Red Flags Rule that is included in the Fair and Accurate Credit Transactions Act? A) lawyers B) automobile dealers

Who is in violation of the Section 8 provisions of RESPA? A) a title company who allows a mortgage broker to lease office space at below market rent B) an attorney who also earns fees for performing multiple settlement services

With a trust deed, who is considered the trustee? A) the independent third party B) the lender

Within ____ business days of a complete application for credit secured by a first lien, creditors must mail or deliver a written notice advising the applicant of the right to receive a copy of all written appraisals or valuations. A) three B) seven

_____interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments. A) Simple B) Accrued

A _____ informs parties to a real estate transaction of current property ownership and lien information without providing an exhaustive search. A) chain of title report B) preliminary title report C) title insurance policy D) lien search

A consumer reporting agency (CRA) must disclose to the consumer the recipients of a consumer's credit report which it has furnished for a purpose other than for employment within the _____-month period preceding the request. A) 5 B) 6 C) 1 D) 3

A home equity conversion mortgage and an adjustable-rate mortgage are both examples of A) conventional loans. B) nontraditional loans. C) government agency loans. D) nonconforming loans.

A lender is offering an ARM loan that is fixed for the first three years. When advertising that ARM loan, the word "fixed" A) must appear before the word "adjustable" or "variable." B) must be accompanied by the fixed time period. C) cannot be smaller than the word "adjustable." D) cannot appear in the ad.

A licensed mortgage lender may NOT publish an advertisement that uses A) the lender's unique NMLS identifier. B) a post office box number in place of the business address that appears on the license. C) an insignia designating membership in a particular professional or local association. D) a 1-800 for contacting the lender.

A mortgage loan that is secured by real estate that allows the borrower to obtain multiple advances of funds up to an approved amount is known as a(n) A) bridge loan. B) home equity line of credit. C) home equity loan. D) installment second mortgage.

A popular way to reduce a buyer's payment amount when interest rates are high is a A) fixed-rate mortgage. B) temporary buydown. C) bi-weekly mortgage. D) secondary financing.

Alexa's loan applicant calls her late in the evening before the closing, informing her he is being laid off the following Monday. All the loan papers are at the title company and the Closing Disclosure is approved. The buyer still wants the home. Alexa decides to let the loan close. What type of fraud is this? A) material misstatement B) material omission C) fraud by deception D) material misrepresentation

Although the Initial Escrow Statement is usually given at settlement, the lender has ____ calendar days from settlement to deliver it. A) 15 B) 45 C) 5 D) 30

As it relates to TRID requirements for providing a Loan Estimate (LE) to an applicant, what statement is FALSE? A) A MLO must provide an LE if 6 of 6 elements of a complete application have been submitted, even if the applicant only requests a pre-qualification. B) If a consumer only requests a pre-approval and provides 6 of 6 elements of a complete application, the MLO is not obligated to provide a LE. C) A MLO must provide an LE if 6 of 6 elements of a complete application have been submitted, even if the applicant only requests a pre-approval. D) If a consumer requests a pre-qualification and provides 5 of 6 elements of a complete application, the MLO is not obligated to provide a LE.

As set forth by RESPA, at the time a servicer creates an escrow account for a borrower, the servicer may charge the borrower an amount sufficient to pay the charges respecting the mortgaged property, such as taxes and insurance, which are attributable to the period from the date such payment(s) were last paid until the initial payment date. The servicer may charge the borrower a cushion that must be no greater than ____ of the estimated total annual payments from the escrow account. A) 1/8th B) 1/6th C) 1/12th D) 1/4th

As set forth by the BSA/AML Act, with regard to electronic funds transfer transactions, a SAR must be filed for transactions aggregating _____or more regardless of potential suspects. A) $10,000 B) $25,000 C) $5,000 D) $15,000

As set forth by the FCRA, creditors who furnish information about consumers to consumer reporting agencies must correct, delete, or verify information within ____ days of receipt of a dispute. A) 45 B) 30 C) 15 D) 10

As set forth in the SAFE Act, a state's regulatory entity has the authority to require a licensee to satisfy a requirement specific to any of the following EXCEPT a A) net worth amount. B) loan origination funding amount. C) surety bond amount. D) state fund contribution amount.

For a self-employed person applying for a mortgage loan, what document identifies net worth by itemizing assets and liabilities? A) credit report B) financial statements C) will D) tax returns

For an electronic funds transfer, a SAR must be filed when there is a transaction aggregating _____ or more that involves potential money laundering or violations of the Bank Secrecy Act. A) $10,000 B) $5,000 C) $15,000 D) $20,000

How many months does a FICO Score consider a credit inquiry in the calculation? A) 3 months B) 12 months C) 6 months D) 9 months

If expired mortgage loan files for borrowers are disposed of in a dumpster at the back of the company's office, the company has violated the consumer-protection requirements set forth by A) RESPA. B) FACTA. C) HMDA. D) ECOA.

Maureen, a licensed MLO, retakes the same 2-hour online course on the topic of nontraditional mortgage products that she took the previous year. She cannot count the 2 hours of education toward her continuing education requirements for license renewal this year because A) she needs to take classroom-based instruction in nontraditional mortgage products to meet her requirements. B) she cannot receive credit for the same course taken in the same or successive years. C) she does not need to take a course in nontraditional mortgage products to meet her license renewal requirements. D) she needs to take a 3-hour course in nontraditional mortgage products to meet her requirements.

Potential borrower Lily will have submitted a complete mortgage loan application that requires an MLO to provide application disclosures required by federal laws once it includes her A) name, Social Security number, income, the loan amount sought, and estimate of property value. B) name, Social Security number, income, the loan amount sought, estimate of property value, and property address to be financed. C) name, Social Security number, income, the loan amount sought, estimate of property value, and appraisal of property to be financed. D) name, Social Security number, income, the loan amount sought, estimate of property value, and title of property to be financed.

Regulation Z applies to all A) business loans with collateral. B) personal real estate credit transactions. C) commercial real estate loans. D) real estate purchase transactions.

Regulation Z offers two different definitions for the term "business day"; often referred to as the "Business Day Rule" and the "More Precise Business Day Rule". The "Business Day Rule" defines business day as day on which the creditor's offices are open to the public for carrying on substantially all of its business functions. The "Business Day Rule" applies to all of the following disclosures EXCEPT the required number of business days A) for providing the Home Loan Toolkit to the consumer. B) before consummation after a revised Loan Estimate is given to the consumer. C) for providing a revised Loan Estimate after notice of a changed circumstance. D) for providing the consumer with the initial Loan Estimate.

TRID requires that charges paid by the consumer to the creditor, such application and processing fees, are to be recorded in what section of the Closing Disclosure? A) Services Borrower Did Not Shop For B) Origination Charges C) Prepaids D) Closing Costs

The Fannie Mae Selling Guide sets forth requirements for the use of a power of attorney (POA) in obtaining required signatures on a security instrument. Though there are specific exceptions to the requirements, which of the following does NOT accurately reflect a requirement for the use of a POA in most circumstances involved with security instrument signatures? A) The POA must be notarized. B) The title agency closing the loan is often used as the POA signer on a security instrument. C) Eligible transactions include purchase and rate/term refinance transactions. D) The lender must obtain and maintain a copy of the applicable POA in the borrower's loan file

The Home Mortgage Disclosure Act provides the data for tracking lender compliance with the provisions of the Fair Housing Act and the A) SAFE Act. B) Equal Credit Opportunity Act. C) Bank Secrecy Act/Anti-Money Laundering Act. D) Gramm-Leach-Bliley Act.

The Loan Estimate disclosure requirement does not apply to all real estate loans. For example, ___ are exempt from the Loan Estimate disclosure requirement. A) a residential mortgage loan with an adjustable interest rate B) commercial loans C) home equity loans D) a fixed-rate conventional loan

The federal rulemaking authority for the SAFE Act is the responsibility of the A) Nationwide Mortgage Licensing System and Registry. B) Consumer Financial Protection Bureau. C) Conference of State Bank Supervisors. D) Department of Housing and Urban Development.

The minimum amount of flood insurance required for first mortgages can be the lowest of the following EXCEPT A) the unpaid principal balance of the mortgage loan. B) 90% of the purchase cost of the insurable value of the improvements. C) 100% of the replacement cost of the insurable value of the improvements. D) the maximum insurance available from the NFIP.

The primary purpose of the FACT Act is to A) regulate credit bureau reporting obligations. B) protect consumers from identity theft. C) ensure that consumers' credit information is accurately maintained and recorded. D) prevent the funding of terrorist operations.

The risk analysis of a mortgage lender must include all liabilities affecting income or assets that will affect the borrower's ability to fulfill the mortgage payment obligation. When the credit report does not contain a reference for each significant open debt shown on the loan application, A) the borrower must remove the debt from the application. B) the lender must provide separate credit verification. C) the borrower must file a request to correct the credit report before the loan can be processed. D) the lender is prohibited from counting the debt in the DTI ratio.

To comply with the ECOA, non-taxable income such as Social Security is grossed up in order to A) make more loans to the elderly. B) treat income the same as taxable income. C) make more loans to first time homebuyers. D) ensure that single parents can qualify for loans.

Wayne has been hired by Reasonable Mortgage Company to collect or receive payments of principal, interest, and escrow due to the note holder for residential mortgage loans. Wayne's job is A) a settlement agent that requires licensing. B) an individual loan servicer that does not require licensing. C) a loan processor that does not require licensing. D) a mortgage loan originator that requires licensing.

What is the clause in a contract that gives the lender certain stated rights when there is a transfer of ownership in a property? A) reconveyance B) due on sale C) acceleration D) defeasance

What method may be used by financial institutions to comply with the USA PATRIOT Act? A) reporting cash transactions in excess of $10,000 B) implementing a Customer Identification Program C) filing suspicious activity reports D) implementing a Privacy Policy program

When Jake purchases a house, he gets a mortgage. The mortgage is recorded May 1. Jake builds a deck in July and then goes to Hawaii for several months. He doesn't pay the contractor or his property taxes. His property goes to foreclosure. Generally speaking, in what order will the liens be paid? A) mechanic's lien, tax lien, mortgage lien B) tax lien, mortgage lien, mechanic's lien C) mortgage lien, mechanic's lien, tax lien D) mortgage lien, tax lien, mechanic's lien

When title insurance is requested to protect the lender's interest in a subject property, it is generally called a(n) A) leasehold policy. B) mortgagee's policy. C) easement policy. D) owner's policy.

Which industry insider would be the one most likely to file a falsified deed? A) appraiser B) government worker C) title company D) rehabber

Which mortgage broker's act is a violation? A) Travis collects a rate lock-in fee required by a governmental agency to be collected directly by the mortgage broker B) Dorian collects a rate lock-in fee from a client payable to the broker C) Lily collects a rate lock-in fee from a client on the mortgage lender's behalf, payable to the mortgage lender D) Shaun presents a lender's offer that a loan will be made at a specified rate if the loan is closed by the given expiration date and if the applicant can meet the qualification standards

Which will NOT be counted toward Kyle's eight hours of National continuing education required by the SAFE Act to renew his loan originator license? A) NMLS-approved 3 hour classroom course on federal law completed in the calendar year B) State-approved 1 hour online course on state-specific license law completed in the calendar year C) NMLS-approved 2 hour online course on nontraditional mortgage products completed in the calendar year D) NMLS-approved 2 hour classroom course on ethics completed in the calendar year

Who IS "taking" a loan application? A) Fiona collects only basic identifying information about the borrower in response to an inquiry regarding a prequalified offer from the lender. B) Ellen responds to a borrower's request for a different rate or fees by presenting the borrower with a revised loan offer. C) Cole receives a loan application through the mail and forwards it on to the lender without review. D) Drew delivers a completed application form to a lender on behalf of a borrower.

With an FHA-insured loan, the Mortgage Insurance Premium (MIP) will remain A) for the life of the loan unless the loan is for a fixed term of less than 30 years. B) for the life of the loan if the LTV ratio at loan consummation is greater than 90%. C) until the LTV is less than 80%. D) until the LTV is less than 78%.

_____ is BEST defined as a nonpossessory interest and an encumbrance on property that grants the right to use another person's real property for a particular purpose. A) Encroachment B) Easement C) License D) Title

A credit report contains the following types of information EXCEPT A) bill repayment history. B) E. whether a debt collector is attempting to collect on a delinquent account. C) employment and income history. D) how much credit is available to the consumer.

A mortgage banker and/or mortgage lender is A) any person who performs clerical support duties related to the processing or underwriting of a residential loan under the direction or supervision of a licensed lender. B) any person who negotiates, places, or sells mortgage loans for finance lenders. C) any person who directly originates, acquires, or provides mortgage loans. D) any person who communicates with a customer in order to obtain the information that is necessary to process or underwrite a residential mortgage loan.

A mortgage loan, typically a second mortgage, that has a predetermined maximum loan amount, has an adjustable rate, can be borrowed against and paid off as needed, and has an interest-only minimum monthly payment, is known as a A) home equity loan. B) reverse mortgage. C) home equity line of credit. D) purchase money mortgage.

A partially amortized mortgage requires a A) due on sale clause. B) partial release. C) balloon payment. D) junior lien.

According to the GLB Act, a person who completes a single transaction with a creditor is known as a(n)____ and is entitled to receive an initial privacy notice from a financial institution only if the company shares nonpublic personal information with companies not affiliated with it, with some exceptions. A) customer B) creditor C) consumer D) applicant

An item claimed on a self-employed applicant's tax returns ________ may be disallowed as income and deducted from total income. A) as a depreciation over time B) as a cash expense C) for a one-time event D) as a paper expense

As defined and used throughout license law, the term "immediate family member" does NOT include A) adoptive relationships. B) grandparents. C) aunts, uncles, and cousins. D) stepchildren.

As defined by Regulation X, which loan type does NOT fall under the definition of a federally-related mortgage loan? A) refinance B) home equity loan C) construction loan D) home equity line of credit

Assume a loan amount of $235,000 with a note rate of 6.25%. What is the prepaid interest charge (rounded) per each day (per diem) if a borrower's loan funds on September 13 and September has 30 days in the month, so there are 18 days from the day of funding to October 1? A) $14,687.50 B) $1,468.75 C) $40.24 D) $402.39

Bernice is a state-licensed MLO in her state of residence. She must complete a minimum of 8 hours of continuing education to renew her license each year before December 31. The state has the authority to mandate that ___ hour(s) of the 8 hours be on either a state-specific topic or an elective topic. A) 3 B) 4 C) 1 D) 2

Chad is applying for a mortgage loan. If applicable, what disclosure can he expect to receive within three business days of submitting his complete application? A) Closing Disclosure B) Initial Escrow Statement C) AfBA Disclosure D) Settlement Agreement

Discount points are A) credited to the borrower at closing. B) paid to the title company to cover the title insurance fee. C) charged to buy down the interest rate on the loan. D) paid to the mortgage broker for their services.

Donna's application for a mortgage loan was denied. In the Adverse Action Statement, the lender must inform Donna that she can request a specific reason for the denial if she does so within ____ days of notification. A) 90 B) 45 C) 60 D) 30

Federal Housing Administration loans are insured by the federal government through the A) Fannie Mae. B) Freddie Mac. C) Department of Housing and Urban Development. D) FDIC.

If a consumer feels she has been discriminated against based on membership in a protected class under the Equal Credit Opportunity Act, she can go to the _____ to file a complaint. A) USPAP B) HUD C) CFPB or appropriate state civil agency as directed D) NMLS

In Section 35 of Regulation Z, which implements TILA, all of the following are thresholds that define a mortgage loan as higher-priced EXCEPT A) loan exceeds the APOR by 1.5% for a first mortgage lien B) loan exceeds the APOR by 2.5% for a first lien jumbo loan C) loan exceeds the APOR by 2.5% for a first mortgage lien D) loan exceeds the APOR by 3.5% for a subordinate mortgage lien

In compliance with the Home Ownership and Equity Protection Act, lender Luke may not refinance a higher-priced loan within the first ____ months of origination, unless the new loan is in borrower Mary's best interest. A) 24 months B) 60 months C) 12 months D) 36 months

In connection with the initial interest rate adjustment pursuant to the loan contract for an adjustable-rate mortgage, a consumer must receive the required disclosures within how many days before the first payment at the adjusted level is due? A) 120 B) 60 C) 240 D) 90

Jacob and Jeremy share part of a driveway. To ensure that each can enjoy use of the driveway and share the maintenance costs, they most likely have what type of easement? A) easement by necessity B) easement by prescription C) easement by agreement D) easement by implication

Lenders submit Loan/Application Registers in order to comply with what law? A) FCRA B) FACT Act C) HMDA D) CRA

On the Closing Disclosure, the Calculating the Cash to Close section on Page 3 must list figures from the most recent Loan Estimate. In addition to indicating if there is a change, the change must be explained and, if there is a tolerance cure, it must be shown as a ____ in Section J on Page 2. A) seller prepaid expense B) borrower credit to the lender C) lender credit to the borrower D) good faith deposit

Regulation X sets forth that when a servicer receives a loss mitigation application at least ___ days before a foreclosure sale, the servicer must promptly review the application to determine if it is complete. A) 10 B) 15 C) 45 D) 30

Regulation X, which implements RESPA, defines ____ as a person (other than an employee of a lender) that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan. A) mortgage banker B) loan originator C) mortgage broker D) mortgage company

Regulation Z implements A) RESPA. B) ECOA. C) TILA. D) FHA.

Section 5a in the Declaration section of the URLA is where the borrower answers questions about the subject property and finances for the loan. What information is NOT to be included in Section 5a? A) The borrower records if the plan is or is not to occupy the property as the primary residence. B) The borrower identifies if the property securing the loan is subject to a lien that could take priority over the first mortgage lien. C) The borrower records loan information such as the loan amount, purpose, and address. D) If this is a purchase transaction, the borrower identifies if there is a family relationship or business affiliation with the seller of the property.

The Equal Credit Opportunity Act is implemented by A) Regulation V. B) Regulation X. C) Regulation B. D) Regulation C.

The Fresh Start Company is anxious to work with homeowner, Julia, to obtain a loan modification that will help her avoid foreclosure. Fresh Start asks Julia for an advance fee to start the process. Fresh Start has violated the _____ with this advance fees request. A) Ability to Repay Rule B) Red Flags Rule C) MARS Rule D) Loan Originator's Compensation Rule

The Safeguards Rule, within the GLB Act, requires companies to A) disclose key information to consumers to help them make better informed loan decisions. B) develop and implement documented plans to protect consumers from predatory lending. C) develop a written information security plan to ensure the security and confidentiality of customer records. D) file reports of cash purchases of negotiable instruments of more than $10,000.

The ____ consolidates four disclosure forms into two forms for closed-end credit transactions secured by real property. A) Fair Lending Act B) The Loan Originator Compensation Rule C) TILA-RESPA Rule D) Real Estate Procedures Act

The _____ is responsible for enforcing the high-cost loan provisions set forth by the Home Ownership Protection Act through Regulation Z, Section 32. A) Nationwide Mortgage Licensing System and Registry B) Conference of State Bank Supervisors C) Consumer Financial Protection Bureau D) Department of Housing and Urban Development

The ______ directed the Bureau of Consumer Financial Protection to integrate the mortgage loan disclosures formally under TILA and RESPA. A) Homeowners Protection Act B) Fair Credit Reporting Act C) Dodd-Frank Act D) Fair Housing Act

The _______ was part of the Housing and Community Development Act of 1992. The Act created a shift in money laundering policy by focusing less on the investigative power of federal agencies and placing more compliance responsibility on financial institutions. A) Bank Secrecy Act B) USA PATRIOT Act C) Annunzio-Wylie Anti-Money Laundering Act D) Anti-Drug Abuse Act

The temporary authority to act as a state-licensed MLO will expire ____ calendar days after the date the applicant was issued a temporary license. A) 60 B) 30 C) 120 D) 90

What Regulation ensures that some borrowers have the right of rescission for three business days after a loan contract is signed? A) Regulation B B) Regulation X C) Regulation Z D) Regulation H

What entity has the authority to enforce the Red Flags Rule that is included in the Fair and Accurate Credit Transactions Act? A) FHA B) HUD C) Federal Trade Commission D) Federal Reserve Board

When an MLO is printing a receipt for a consumer's credit card or debit card number, FACTA requires that no more than ____ digits of any customer's card or debit card number appear on the receipt. A) 6 B) 3 C) 5 D) 4

When an MLO receives an inquiry related to mortgage loan interest rates, a corresponding annual percentage rate (APR) must be provided to the inquiring consumer at the same time a rate quote is delivered. What document can be used as a tool for explaining the APR to an applicant? A) APR Disclosure B) AfBA Disclosure C) Loan Estimate D) Closing Disclosure

When completing a Loan Estimate, where should a licensed mortgage loan originator include an estimate of hazard insurance premiums? A) Origination Charges B) Services You Cannot Shop For C) Prepaids D) Services You Can Shop For

Which financial arrangement is EXEMPT from the Real Estate Settlement Procedures Act? A) home equity lines of credit B) loan assumption C) temporary transaction D) refinancing

Which is least likely to be an indication that the prohibited act of property flipping may be taking place? A) a group of sellers and buyers changing ownership of one property among them B) a series of sales and quick resales C) purchasing and remodeling a house and selling it for quick profit D) an inflated appraisal

Which of the following documents will need to be provided by the seller's lender at the closing meeting? A) bill of sale B) mortgage note C) discharge of mortgage D) property inspection report

Which of the following is NOT a reason that a typical reverse mortgage becomes due? A) last surviving borrower dies B) borrowers cease to live in the home for 12 consecutive months C) no withdrawals are made in a consecutive 12 month timeframe D) borrowers sell the home

Which statement is TRUE about interest rate buydowns on FHA loans? A) A borrower may qualify at the buydown rate. B) The FHA does not allow seller-paid buydowns. C) A borrower must qualify at the note rate. D) The FHA does not allow builder-paid buydowns.

With a(n) _____ loan the AUS recognizes a good credit risk and may require a reduced list of documentation; for example, only verbal verification of employment as opposed to two years of W-2s. A) Graduated Payment B) FHA C) Alt-A D) A-minus

A ____ is money a lender gives to a borrower to offset closing costs when, in exchange, the borrower pays a higher interest rate. A) discount point B) par rate C) kickback bonus D) lender credit

A _____ is defined by the NMLS as the individual that represents a company and may be required to meet specific requirements. A) branch manager B) sponsor C) company's primary owner D) qualified individual

A consumer reporting agency that receives a request accompanied by proper identification must place a security freeze on the consumer credit report no later than ______ business day(s) after receiving such request. A) 10 B) 30 C) 5 D) 1

A creditor provides a $400 estimate of title fees, which are included in the category of fees that may not increase by an aggregate of more than 10%. An unexpected unreleased lien is discovered and the title company must perform unexpected additional work to release the lien. The additional costs result in a 5% increase over the sum of all fees included in the category of fees that may not increase by an aggregate of more than 10%. In this case, A) this is not a changed circumstance that allows for a revised LE that can be used for good faith analysis. B) this is a changed circumstance that allows for a revised LE but the initial estimate must still be used for good faith analysis. C) More information is needed to determine if this is a changed circumstance that allows for a revised LE used in the good faith analysis. D) this is a changed circumstance that allows for a revised LE that can be used for good faith analysis.

A homeowner is refinancing his home loan. What might cause the loan balance shown on the credit report to be different from his payoff? A) the interest rate B) the loan term C) the original loan amount D) prepayment penalties

A lien is a _____ that is described as a nonpossessory financial interest in property. A) category of bank ownership B) title encumbrance C) type of foreclosure D) financial encumbrance

A loan with a 2/1 buydown, a current market rate of 6.5%, and a start rate of 4.5% would have a payment based on what rate in month 30? A) 4.50% B) 5.50% C) 7.50% D) 6.50%

A servicer must deliver to a borrower or place in the mail a written notice requesting the borrower provide hazard insurance information for the borrower's property at least ___ days before a servicer assesses the borrower a fee for force-placed insurance. A) 30 B) 90 C) 60 D) 45

A standard form of title insurance policy does NOT protect against loss resulting from A) undisclosed liens or encumbrances. B) lack of capacity of the grantor. C) forgery in the chain of title. D) encroachment on the property.

According to the Fair Housing Act, the Equal Housing Opportunity logo must be used in all advertising of A) residential and commercial real estate for sale, rent, or financing. B) residential real estate for sale or financing. C) residential and commercial real estate for sale or financing. D) residential real estate for sale, rent, or financing.

As defined and used throughout ECOA and Regulation B, _____ means a termination of an account or an unfavorable change in the terms of an account that does not affect all or substantially all of a class of the creditor's accounts. A) credit denial B) loan default C) counteroffer D) adverse action

As set forth by Section 32 of Regulation Z, a high-cost mortgage must NOT include ____ unless the loan has a maturity of 12 months or less because it is being used as a bridge loan. A) PMI B) negative amortization C) a pre-payment penalty D) a balloon payment

Conforming loans follow the underwriting guidelines of A) Freddie Mac and Ginnie Mae. B) FHA. C) Ginnie Mae and HUD. D) Fannie Mae and Freddie Mac.

For the purposes of a VA-guaranteed loan, what is not subtracted to determine residual income? A) housing expenses B) taxes C) recurring debt D) W-2 income

HMDA A) prohibits housing and lending discrimination. B) establishes a quota for mortgage loans within a certain geographic area. C) sets forth application data requirements for loan underwriting. D) aids in identifying discriminatory lending patterns.

If a home is in a federally designated Special Flood Hazard Area, the lender will require specific flood insurance A) until the LTV is 78%. B) until the LTV is 80%. C) only if the homeowner does not carry a flood rider on his homeowner's insurance. D) for the life of the loan, as long as it remains in a Special Flood Hazard Area.

If an appraiser intentionally underestimates an appraisal value to keep the values in that area low, that appraisal would be violating provisions of what law? A) Fair Housing Act B) Fair Credit Reporting Act C) Equal Credit Opportunity Act D) Truth in Lending Act

In explaining fees to a borrower, which of the following is NOT a prepaid fee that is subject to an unlimited tolerance for change when compared to the same fees on the Loan Estimate? A) property taxes B) homeowner's insurance premium C) mortgage insurance premium D) transfer taxes

Lester's stable monthly income is $6,800. Every month he pays: $485 car payment, $200 revolving credit payment, and $1,500 alimony. What is the maximum monthly mortgage payment he would qualify for on an FHA-insured mortgage loan? A) $1,108 B) $238 C) $849 D) $739

Money laundering prevention components of the BSA/AML Act for lenders include all of the following EXCEPT A) requiring identification of the consumer seeking a mortgage loan. B) verifying information provided by the consumer. C) being alert to any suspicious activity. D) implementing a written identity theft prevention program.

Mortgage applicant Ellen has received a Loan Estimate from lender XYZ. Ellen has ____ days from when the Loan Estimate was provided to respond; otherwise, lender XYZ is no longer bound by the terms. A) 7 B) 5 C) 3 D) 10

Mortgage loans offered through FHA, VA, and USDA Section 502 programs are referred to as what type of loan? A) conventional B) qualified C) traditional D) non-conventional

One of the most critical points of the Loan Originator Compensation Rule is the prohibition of the practice of A) money laundering. B) redlining. C) kickbacks. D) steering.

Pamela is employed to take residential mortgage loan applications for a federally-chartered bank. To legally do this job, she must be a A) licensed loan originator. B) licensed mortgage lender. C) certified loan processor. D) registered mortgage loan originator.

Seller contributions are closing costs the seller has agreed to pay. Each loan type has slightly different rules when it comes to seller contributions. For example for all ____ loans, the seller and other interested parties can contribute up to 6% of the sales price or toward closing costs, prepaid expenses, discount points, and other financing concessions. A) conventional fixed-rate B) conventional adjustable-rate C) VA-guaranteed D) FHA-insured

States in which title is conveyed to the mortgagee are referred to as A) equitable theory states. B) lien theory states. C) intermediary theory states. D) title theory states.

The Fannie Mae Selling Guide sets forth requirements for the use of a power of attorney (POA) in obtaining required signatures on a security instrument. Which of the following does NOT accurately reflect a requirement for the use of a POA in most circumstances involved with security instrument signatures? A) Eligible transactions include purchase and rate/term refinance transactions. B) The POA must be notarized. C) The lender must obtain and maintain a copy of the applicable POA in the borrower's loan file. D) A lender, who is not a relative of the borrower, may be used as the POA signer on a security instrument.

The Fannie Mae Selling Guide sets forth requirements for who must sign the security instrument that is part of a mortgage loan transaction. Which of the following is NOT one of the signature requirements? A) The domestic partner of any person who has an interest in the property must sign, if the partner's signature is necessary under state law to waive any property rights by virtue of being the owner's partner. B) The spouse of any person who has an interest in the property must sign, if the spouse's signature is necessary under state law to waive any property rights by virtue of being the owner's spouse. C) Each person who has an ownership interest in the security property must sign, even if the person's income is not used in qualifying for the mortgage. D) Only persons who have an ownership interest in the security property and also have his/her income used in qualifying for the mortgage must sign.

To address the problem of illegal property flipping, appraisers must analyze the transfer history of a subject property for the previous A) three months. B) eighteen months. C) one year. D) three years.

To comply with Regulation N (Mortgage Acts and Practices - Advertising, 12 CFR Part 1014), a lender must maintain documents for a period of ___ months describing or evidencing all mortgage credit products available to consumers during the time period in which it made or disseminated an applicable commercial communication. A) 36 B) 12 C) 6 D) 24

Two different definitions for the term "business day" are set forth in Regulation Z; often referred to as the "Business Day Rule" and the "More Precise Business Day Rule". The "Precise Business Day Rule" defines business day as all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a). The "Precise Business Day Rule" applies to all of the following EXCEPT for the required number of business days A) before consummation after early disclosures are provided to the consumer. B) before consummation after the Closing Disclosure is given to the consumer C) before consummation after a revised Loan Estimate is given to the consumer. D) for providing the consumer with the initial Loan Estimate.

Veterans can generally purchase a home priced up to ____ times the amount of their entitlement with no down payment. A) 4.5 B) 3.5 C) 3 D) 4

What document indicates the amount and terms of the loan and what the lender can do if the borrower fails to make payments? A) loan application B) title report C) Closing Disclosure D) mortgage note

What entity oversees the Federal Housing Administration (FHA)? A) Nationwide Multistate Licensing System & Registry B) Consumer Financial Protection Bureau C) Federal Trade Commission D) Department of Housing and Urban Development

What is the form number of the Uniform Residential Loan Application? A) 1008 B) 4506 C) 1099 D) 1003

What is the second largest component of a credit score? A) length of credit history B) payment history C) types of credit in use D) amounts owed

What type of property is involved in the air loan fraud scheme? A) residential B) mixed-use C) commercial D) non-existent

When evaluating rental income that is not reported on current tax returns, the lender will use a portion of the gross rental income. The amount of the portion that can be used is A) 50%. B) 100%. C) 25%. D) 75%.

Which federal legislation requires that, in cases where an application is taken in person and the applicant does NOT wish to provide information specific to his ethnicity, an MLO must make a visual determination and/or use a surname as the basis for this determination? A) Fair Credit Reporting Act B) Equal Credit Opportunity Act C) Truth in Lending Act D) Home Mortgage Disclosure Act

Which license type may NOT be issued to a corporation? A) mortgage banker B) mortgage broker C) commercial mortgage broker D) mortgage loan originator

Which statement about the MIP on FHA-insured loans is TRUE? A) It must be paid only by the buyer at closing. B) There is never an annual premium if it is paid up front. C) It cannot be financed into the loan. D) A portion of it could be refunded if the loan is refinanced within three years.

A home equity line of credit tends to provide borrowers with all the following benefits EXCEPT the benefit of A) a fixed interest rate. B) borrowing the amount of funds needed when needed. C) flexible payoff terms. D) a potential interest rate tax deduction.

For fixed-rate HECM mortgages, borrowers receive the __________ payment plan. A) single disbursement lump sum B) modified term C) scheduled monthly D) modified tenure

GNMA insures what type of mortgage-backed securities? A) FHA B) fixed rate C) conforming D) subprime

Lenders that originate qualified mortgages will be presumed to have met the ATR/QM Rule mandated by the Dodd-Frank Act. The ATR/QM Rule applies to all of the following loan types EXCEPT A) home equity lines of credit. B) adjustable-rate mortgage loans. C) fixed-rate mortgage loans. D) home equity loans.

The Red Flags Rule that requires certain businesses and organizations to develop, implement, and administer an identity theft prevention program is part of what federal law? A) Fair and Accurate Credit Transactions Act. B) Dodd-Frank Act C) Bank Secrecy/Anti-Money Laundering Act D) Gramm-Leach-Bliley Act

To determine the fully indexed rate of an ARM, the margin is added to the A) index. B) periodic cap. C) prime rate. D) note rate.

Under the conditions for a loan to be a general qualified mortgage, lenders must verify that the borrower has the ability to repay the loan and must retain the information used in the ability to repay analysis for how many years after loan consummation? A) 3 B) 5 C) 4 D) 2

What do you call a deed that carries guarantees of clear title and the grantor's right to convey? A) warranty deed B) conveyance deed C) real property deed D) grantor's deed

What type of loan would commonly use an extended rate lock? A) new construction B) home equity loan C) refinance D) purchase

Which of the following does NOT need to be included in an adverse action notice to comply with Regulation B? A) a statement explaining the applicant has 30 days to request the reason for the denial B) a statement identifying the action taken by the lender C) the lender's name and address D) statement identifying the prohibitions against discrimination under ECOA

Which statement is NOT a requirement set forth by TRID specific to who is to provide and be listed in the creditor's information section of the Loan Estimate (LE) as a creditor? A) If a mortgage broker is completing the LE, use the name of the mortgage broker. B) If there are multiple creditors, use only the name of the creditor completing the LE. C) If a mortgage broker is completing the LE and the name of the creditor is unknown, leave this space blank. D) If a mortgage broker receives a consumer's application, the mortgage broker may provide the Loan Estimate to the consumer on the creditor's behalf.

Which type of mortgage is most likely to cause payment shock, according to the Interagency Statement on Subprime Mortgage Lending? A) adjustable-rate mortgage B) jumbo mortgage C) fixed-rate mortgage D) construction mortgage

___________, the HECM program requires prospective borrowers to participate in a consumer counseling session given by an approved counselor. A) Before they can apply for the loan B) Within 10 days of loan consummation C) Within three business days of loan application D) Prior to loan consummation

A VA-guaranteed loan is to be assumed by another eligible veteran and the current borrower released of liability. Which statement about the assuming buyer is FALSE? A) The buyer must be approved by as an acceptable credit risk by VA. B) The buyer cannot hold the veteran who sells the property secondarily liable. C) The buyer must also have unused eligibility status if the seller does not transfer entitlement. D) The buyer agrees in writing to assume the veteran's liability reimbursement obligation.

A ____ is the compensation paid to a mortgage broker for giving a borrower an interest rate above the lender's par rate on a loan in exchange for lower upfront costs. A) wholesale rate B) yield spread premium C) discount point D) par rate reward

Due to consumer information now shared across several industries, the Gramm-Leach-Bliley (GLB) Act includes provisions in Title V to protect and regulate the disclosure of consumers' personal financial information. There are three principal parts to the Title V privacy requirements. Which of the following is NOT one of the three principal parts? A) Safeguards Rule B) Bank Secrecy Rule C) Financial Privacy Rule D) Pretexting Provisions

Each of these loan types is exempt from the provisions of the Truth in Lending Act EXCEPT A) a loan for an empty lot on which a store will be built. B) a mortgage for a borrower's primary residence. C) a personal loan of $30,000 that is not secured by real property. D) a loan with less than four payments.

For a higher-priced mortgage loan, if the price reflected in the consumer's purchase agreement is more than ___% higher than the seller's acquisition price during the first 91-180 days, creditors are required to obtain a second appraisal. A) 6.5% B) 20% C) 7.5% D) 10%

Lender Ann must retain a SAR record for how many years after she files the report? A) 3 years B) 5 years C) 1 year D) 7 years

Lenders who are authorized to underwrite their own FHA-insured loan applications have what type of underwriters in their office? A) DU/LP B) direct endorsers C) automated underwriters D) title insurance underwriters

On the Loan Estimate, broker fees paid directly by the borrower must be A) averaged with other origination fees. B) itemized separately from other origination fees. C) lumped together with other origination fees. D) excluded from itemized fees.

TRID sets forth that a creditor must ensure that the consumer receives the revised Loan Estimate no later than ___ business day(s) prior to consummation. A) 3 B) 4 C) 5 D) 1

The Loan Estimate and Closing Disclosure both have Section F Prepaids, Section G Initial Escrow Payment at Closing, and Section H Other. There is a(n) ______ tolerance for change for the costs in these three sections. A) limited B) unlimited C) unknown D) zero

The TILA-RESPA Rule applies to A) mortgages secured by mobile home. B) home equity loans. C) home equity lines of credit. D) reverse mortgages.

The main purpose of the Fair Credit Reporting Act is to A) identify requirements for consumers who do not want to be contacted by financial institutions. B) create reasonable procedures to ensure the confidentiality and accuracy of consumer credit information. C) create reasonable procedures for denying credit based on credit report information. D) provide the consumer with procedures for improving a credit score.

The term "par rate" is best described as A) the final rate the borrower is charged B) a rate that requires no discount points and pays no yield spread premium. C) a rate that requires no discount points. D) a rate which pays no yield spread premium.

When PMI is required for conforming adjustable-rate mortgages, the lender must provide required PMI cancellation disclosure notices A) three business days before closing. B) at loan consummation. C) within 30 days of loan consummation. D) with the initial Closing Disclosure.

Which Act amended the Truth in Lending Act, establishing disclosure requirements and prohibiting equity stripping and other abusive practices in connection with "high-cost" mortgages? A) Homeowners Protection Act (HPA) B) Home Ownership and Equity Protection Act (HOEPA) C) Home Mortgage Disclosure Act (HMDA) D) Community Reinvestment Act (CRA)

Which item is NOT included in the calculation that determines the annual percentage rate? A) broker's origination fee B) purchaser's title insurance premium C) mortgage insurance premium D) lender's discount points

Which of the following is NOT a feature of a Section 502 Direct Loan offered by the USDA? A) up to 33, and in some cases 38, year payback period B) 3.5% down payment C) fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower D) interest rate when modified by payment assistance, can be as low as 1%

While it is illegal to ask or consider the race or ethnicity of an applicant, which federal legislation requires that this information be requested from every applicant? A) Equal Credit Opportunity Act B) Home Mortgage Disclosure Act C) Fair Credit Reporting Act D) Truth in Lending Act

With a HECM, the amount a person is able to borrow will depend on all of the following EXCEPT A) current interest rate. B) the loan-to-value ratio. C) lesser of appraised value; the HECM FHA mortgage limit; or the sales price. D) age of the youngest borrower or eligible non-borrowing spouse.

An A-minus loan is A) riskier than both prime and subprime loans. B) less risky than both prime and subprime loans. C) riskier than a prime loan and less risky than a subprime loan. D) riskier than a subprime loan and less risky than a prime loan.

Borrowers with FHA-insured loans are required to establish bona fide occupancy of the property as their principal residence within ____ days of signing a security instrument. A) 30 B) 15 C) 60 D) 45

The Bank Secrecy Act was amended by the USA PATRIOT Act (Section 326) adding the requirement that financial institutions establish a written customer identification program (CIP). Which statement is FALSE as it relates to an institution establishing a CIP? A) The program must include verification of a person's name, date of birth, address, and identification number. B) For an individual who does not have an address, the individual may provide the address of next of kin or another contact. C) The term "financial institution" does not include a mortgage broker or loan originator. D) A non-U.S. person may provide a taxpayer identification number as an identification number.

The _____ sets forth that if a law requires that a business retain a record of a transaction, the business satisfies the requirement by retaining an electronic record, as long as the record is accessible to people who are entitled to access it. A) Real Estate Procedures Act B) Truth in Lending Act C) Electronic Signatures in Global and National Commerce Act D) Bank Secrecy Act

The purpose of the ____ is to establish requirements for canceling and terminating private mortgage insurance. A) Gramm-Leach-Bliley Act B) Fair Lending Act C) Homeowners Protection Act D) Truth in Lending Act

To comply with Regulation B, a Statement of Adverse Action must either disclose a specific principal reason for the action taken or disclose the applicant's right to request the reason(s) for denial within ____ days of receipt of the lender's notification. A) 45 B) 90 C) 60 D) 30

To comply with the Truth in Lending Act, for credit secured by real property or a dwelling (closed-end credit only), the disclosed finance charge is considered accurate if it is not understated by more than A) $50. B) $200. C) $100. D) $500.

To protect themselves, lenders use plans for disbursing construction loan proceeds to guard against overspending by the borrower. With the _____, the lender directly pays bills presented by the various suppliers and laborers on a project. A) System of Periodic Payments B) Voucher System C) Warrant System D) Fixed Disbursement Plan

Under a one-time construction close that has taken more than ___ to be completed, FNMA will require that the borrower pay a rate lock extension fee. A) 6 months B) 1 year C) 4 months D) 9 months

What federal legislation allows the borrower to challenge the value stated within an appraisal report? A) TILA B) FCRA C) ECOA D) RESPA

What is the basic entitlement available to veterans for a VA-guaranteed loan? A) $55,000 B) $144,000 C) $36,000 D) $78,000

When a suspect is identified, a financial institution must file a SAR no later than how many calendar days after the date of initial detection of the facts that constitute the basis for filing a SAR? A) 10 B) 5 C) 30 D) 15

When construction is complete, the appraiser verifies that plans and specifications have been met and the original opinion of value is valid; the loan is then replaced by a permanent amortizing loan, often called a A) graduated construction loan B) bridge loan C) take-out loan. D) blanket loan

Assets are typically classified as liquid or not liquid. Which of the following is a liquid asset? A) proceeds from the future sale of a non-real estate asset B) unsecured borrowed funds C) cash deposits on the sales contract (earnest money) D) cash value of life insurance

Construction to permanent loans A) are to build the home only. B) allow for a cash-out in a one-time close. C) are a form of temporary financing used until the borrower's existing home sells. D) allow for a cash-out in a two-time close if the equity exists.

Each of these loans would be excluded under the definition of a higher-priced mortgage loan EXCEPT A) an initial construction loan. B) a reverse mortgage. C) a home equity line of credit. D) a purchase loan.

RESPA is implemented by A) Regulation B. B) Regulation Z. C) Regulation H. D) Regulation X.

Section 35 of _____ sets forth requirements for loans that meet higher-priced mortgage loan criteria. A) Regulation B B) Regulation H C) Regulation X D) Regulation Z

Which fee can be included in the terms of a mortgage loan that must adhere to the loan term restrictions of Regulation Z, Section 32 and/or Section 35? A) payoff fee B) loan modification fee C) prepayment penalty fee D) late fee

Which of the following describes a mortgage loan that starts at a 3% interest rate, goes to 5% after 3 years, 6% in year 4, and never goes above 8%? A) 5/1 ARM with caps of 2/5 B) 3/1 ARM with caps of 1/5 C) 5/1 ARM with caps of 2/1/5 D) 3/1 ARM with caps of 2/5

Which of the following is NOT part of the secondary market? A) Federal Home Loan Mortgage Corporation B) Federal National Mortgage Association C) Government National Mortgage Association D) Federal Housing Administration

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