MLO Federal Law

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. $15,000 $10,000 $25,000 $5,000

$25,000

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. $10,000 $15,000 $20,000 $5,000

$5,000

The annual escrow account statement must include an explanation of how any surplus is being handled by the servicer. If the surplus is less than ____, the servicer may refund such amount to the borrower or credit such amount against the next year's escrow payments. $30 $25 $50 $45

$50

As set forth in Regulation V, if a consumer files a Chapter 7 bankruptcy, the consumer will probably have to wait ____ years for the negative credit information to drop off credit reports. 5 10 3 7

10

As set forth by Regulation Z, before enforcing an acceleration clause that appears as part of the mortgage, lenders must wait until payments are delinquent at least ____ days. 90 60 120 30

120,

For closed-end credit, Regulation B states that a creditor must provide a copy of an appraisal promptly upon completion or three business days prior to consummation of the transaction. An applicant may waive the timing of this requirement. Generally, any such waiver must be obtained at least ____ business days prior to consummation. 5 30 3 10

3, Regulation B states that a creditor must provide a copy of an appraisal or other written valuation promptly upon completion or three business days prior to consummation of the transaction (for closed-end credit) or account opening (for open-end credit). An applicant may waive the timing of this requirement and agree to receive any copy at or before consummation or account opening, except where otherwise prohibited by law. Any such waiver must be obtained at least three business days prior to consummation or account opening unless the waiver pertains solely to the applicant's receipt of a copy of an appraisal or other written valuation that contains only clerical changes from a previous version of the appraisal or other written valuation provided to the applicant three or more business days prior to consummation or account opening.

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? 30 10 15 5

30,

Per the Telemarketing Sales Rule, a loan servicer cannot call a customer later than ___ days after a customer's name is included on the National Do Not Call Registry. 11 16 31 6

31

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. 5 1 3 4

4,

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

5 years, Financial institutions must retain Suspicious Activity Report (SAR) records for five years after filing the report.

According to the Fair and Accurate Credit Transactions Act, which situation would NOT be a valid reason for a consumer to add a fraud alert to a credit report? a man whose wallet was stolen and whose credit card was used to purchase a flat panel TV a soldier who is shipped overseas for military duty a woman who changes her name after a divorce a computer programmer who is transferred by his company to London for a year

A woman who changes her name after a divorce,

If each of the following loans would otherwise require compliance with the Federal Truth-in-Lending ACT, which one would be exempt on the basis of the type of loan itself? A. An agricultural loan by a bank B. A VA loan from a federally-charted savings and loan association C. $25,000 loan from a credit union for home improvement D. $20,000 signature loan from a consumer finance company

A. An agricultural loan by a bank Truth-In-Lending Act was designed to protect the borrower by requiring the lender to make a meaningful disclosure of credit terms to the borrower. The Truth-in-Lending Act would not cover Agricultural Loans. The right of rescission on a loan begins when Loan documents are signed by the borrower;

What does it mean that HUD Homes are initially offered on a "priority basis"? A. People who are buying the home as their primary residence are given 1st priority to make an offer. B. Real estate brokers who are properly registered with HUD are given 1st priority to make an offer. C. HUD Homes are initially offered at a below-market or "priority" rate to encourage quick sale. D. HUD will give priority financing to initial buyers of HUD Homes.

A. People who are buying the home as their primary residence are given 1st priority to make an offer. HUD is the Department of Housing and Urban Development: the United States federal department that administers federal programs dealing with better housing and urban renewal; created in 1965

Regulation B sets forth that in any system of evaluating creditworthiness, a creditor may consider the age of an elderly applicant when such age is used to favor the elderly applicant in extending credit. As defined and used in Regulation B, which of the following defines elderly? age 65 or older age 70 or older age 62 or older age 72 or older

Age 62 or older

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. Bank Secrecy Act Anti-Drug Abuse Act Annunzio-Wylie Anti-Money Laundering Act USA PATRIOT Act

Annunzio-Wylie Anti-Money Laundering Act

What does HCFP stand for? A. Housing and Commonality Facilities Programs B. Housing and Community Facilities Programs C. Health and Community Facilities Programs D. Housing and Community Facilities Projects

B

What information is a mortgage loan originator NOT allowed to ask a borrower who is applying for a home mortgage? A. ethnicity B. receipt of public assistance C. sex D. race

B

Which is a disclosure that RESPA requires creditors to give to customers at the time of the mortgage loan closing? A. Mortgage Servicing Disclosure Statement B. HUD-1 C. Settlement Costs and You Booklet D. GFE

B. HUD-1 The HUD-1 Settlement Statement is a standard form in use in the United States of America which is used to itemize services and fees charged to the borrower by the lender or broker.

How long does a lender have to cure a tolerance violation? A. Within 10 business days after settlement B. Within 30 calendar days after settlement C. The borrower must be reimbursed at settlement D. Within 1 business days after settlement

B. Within 30 calendar days after settlement RESPA allows lenders to cure the tolerance violation by reimbursing to the borrower the amount by which the tolerance was exceeded, at settlement or within 30 calendar days after settlement.

A creditor can retain files that are prohibited by the Equal Credit Opportunity Act (ECOA) when the information: A. was requested and obtained from a source after 1997 B. about an applicant was obtained from a legal firm C. was obtained from a consumer reporting agency without the creditor requesting it D. about an applicant was obtained from another creditor

C

If a borrow is on the DO NOT CALL LIST and makes an inquiry about doing business with you in regards to a loan, when does right to contact them expire? A. 1 month B. 2 months C. 3 months D. 4 months

C. 3 months An established business relationship with a company also will be created if you make an inquiry to the company, or submit an application to it. This kind of established business relationship exists for three months after the inquiry or application. During this time, the company can call you.

In order for a junior mortgage on a primary residence to be considered a higher-priced loan, the APR must exceed the applicable average prime offer rate by at least A. 8% B. 5% C. 3.5% D. 1.5%

C. 3.5% The Mortgage Disclosure Improvement Act defines a higher-priced junior mortgage loan as one that exceeds the applicable average prime offer rate by at least 3.5%.

A lender has how many days to notify the borrower of an underwriting decision? A. 10 B. 60 C. 30 D. 20

C. 30 The equal credit opportunity act clearly states that any decision being made regarding applicant be disclosed within 30 days

Under the Home Ownership and Equity Protection Act (HOEPA), which loan below would be considered a high-cost loan? A. $100,000 loan with fees of $7,500 B. $300,000 loan with fees of $22,500 C. $420,000 loan with fees of $20,500 D. $200,000 loan with fees of $16,500

D

After the collection of statistical data, lenders are required to forward that information to the regulator by what date under the Home Mortgage Disclosure Act? A. May 1st B. February 1st C. April 1st D. March 1st

D. March 1st

Which Regulation corresponds to The Real Estate Settlement Procedures Act (RESPA) ? A. regulation Y B. regulation V C. regulation Z D. regulation X

D. regulation X The term "Regulation X" can refer to two different regulations in the United States. One, passed by the Federal Reserve Board, concerns credit extended to people who purchase United States Treasury securities. The other, also known as the Real Estate Settlement Procedures Act (RESPA) is concerned with the process of completing real estate sales. People who participate in such sales are monitored by the Department of Housing and Urban Development to determine whether or not they are adhering to legislation such as Regulation X.

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? Dodd-Frank Act Bank Secrecy/Anti-Money Laundering Act Fair and Accurate Credit Transactions Act. Gramm-Leach-Bliley Act

Fair and Accurate Credit Transactions Act, Section 114 of the Fair and Accurate Credit Transactions Act (FACTA or FACT Act) is known as the Red Flags Rule that requires financial institutions and creditors to implement a written identity theft prevention program. The provisions of the Red Flags Rule are enforced by the Federal Trade Commission (FTC).

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

HMDA

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? Equal Credit Opportunity Act Truth in Lending Act Fair Credit Reporting Act Home Mortgage Disclosure Act

HMDA

What law requires the lender to collect a borrower's demographic information for first mortgages and home improvement loans? ECOA HOEPA HMDA TILA

HMDA requires the collection of a borrower's demographic information. HMDA known also as Regulation C, requires this information to help prevent things like redlining, reverse redlining and blockbusting

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? If there are multiple creditors, use only the name of the creditor completing the LE. If a mortgage broker is completing the LE, use the name of the mortgage broker. 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. If a mortgage broker is completing the LE and the name of the creditor is unknown, leave this space blank.

If a mortgage broker is completing the LE, use the name of the mortgage broker, 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. If a mortgage broker is completing the LE, use the name of the creditor if known. If a mortgage broker is completing the LE and the name of the creditor is unknown, leave this space blank. If there are multiple creditors, use only the name of the creditor completing the LE.

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)? If a provider fee was listed in Section C of the LE, the fee always goes in Section C of the CD. If borrower Ellie chose the provider from a written list, the fee goes in Section C of the CD. If borrower Ellie chose the provider from a written list, the fee goes in Section B of the CD. 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.

If borrower Ellie chose the provider from a written list, the fee goes in Section B of the CD.

After the collection of certain statistical data, lenders are required to submit their annual loan/application register to their supervisory agency by what date under the Home Mortgage Disclosure Act?

March 1

To stay in compliance with the Equal Credit Opportunity Act and Regulation B, if Juan applied for a loan on March 1 and XYZ Mortgage Company rejected his loan application on March 5, XYZ must send Juan a written explanation of its decision by March 10. April 31. April 6. March 31.

March 31, Per ECOA, and as implemented by Regulation B, lenders must notify applicants of their credit status and reasons for action taken within 30 days of receiving a complete application concerning the lender's approval of, counteroffer to, or adverse action on the application.

An MLO is looking over a borrower's credit report and sees a fraud alert, under the Economic Growth, Regulatory Relief and Consumer Protection Act, how long can a fraud alert be on a borrower's credit report? 1 year 30 days 6 months 90 days

One Year

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

Prepaids

Dodd-Frank mandated which of the following rules that now appear under TILA: FACTA The Safeguard Rule Qualified Mortgage The Disposal Rule

Qualified Mortgage

HMDA requires the lenders to obtain what information for each borrower? Marital status and Age Race and Sex Marital status and Sex Age and Race

Race and Sex

An MLO is required to protect a borrower's non-public personal information, per what federal law? Regulation Z Regulation B Regulation X Regulation P

Regulation P

Under what law is a lender required to provide an adverse action disclosure if the borrower's credit is the reasoning for all or part of the decision to deny the loan application: Regulation X Regulation V Regulation Z Regulation C

Regulation V or the Fair Credit Reporting Act require that an adverse action notice be provided to a borrower within 30 days of a credit decision if the borrower's credit is the reasoning for all or part of the decision to deny the loan application.

RESPA is implemented by Regulation X. Regulation H. Regulation Z. Regulation B.

Regulation X

What federal legislation allows the borrower to challenge the value stated within an appraisal report? TILA FCRA ECOA RESPA

Since the property is being used as collateral for the loan, certain determinations are made based on the accuracy of the appraisal. Property condition and loan-to-value are dependent on accuracy and the Equal Credit Opportunity Act (ECOA) allows the borrower to challenge that information.

What does TRID stand for? The Rural Interface Diversity Act TILA-RESPA Interface and Disclosure Rules The Residential Integrated Disclosure Act TILA-RESPA Integrated Disclosure Rule

TILA-RESPA Integrated Disclosure Rule

The responsibility of financial institutions to meet both the deposit and credit needs of the community, including the needs of low-income families, is called? the Equal Credit Opportunity Act. the Fair Credit Reporting Act. the Community Reinvestment Act. the Home Mortgage Disclosure Act.

The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.

The ______ prohibits discrimination in granting credit and prohibits a creditor from discouraging someone from applying for a loan on the basis of sex, age, marital status, race, color, religion, national origin, receipt of public assistance, and exercised rights under the Consumer Credit Protection Act. Anti-Discrimination Housing Act Fair Housing Act Credit Consumer Protection Act Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in granting credit and prohibits a creditor from discouraging someone from applying for a loan on the basis of: sex, age (provided the applicant has the legal capacity to contract), marital status, race, color, religion, national origin, receipt of public assistance, and exercised rights under the Consumer Credit Protection Act. Although Fair Housing Act includes the protected classes of sex, race, national origin, and familial status, it does not provide protection from discrimination based upon age or source of income.

What is the maximum penalty for providing false information on a federally related loan? $250,000 fine and 30 years jail time Revoke license and $1,000 fine $5,000 fine and one year jail time Up to $1,000,000 fine and jail time

The Fraud Enforcement and Recovery Act of 2009 (FERA) implemented additional more stringent penalties to combat mortgage fraud including an increase penalty for providing false information on a federally related loan. The fine is up to $1,000,000 and the perpetrator can also face jail time.

After meeting with the borrowers to complete a loan application, you return to your office and order a Tri-Merged credit report. Now that you have a credit report, what Loan Disclosure must you now prepare and mail (or give) to them? Denial Letter Notice to Home Loan Applicant Rapid Rescore Credit Authorization Consent

The Notice to Home Loan Applicant is required under FACTA and must provide information like the consumer's credit score, the range of possible credit scores, any factors that adversely affected the score (up to 4 key factors), the date the score was received and the name of the company that provided the report.

As set forth by Regulation X, which of the following is NOT a condition required for a person licensed and able to perform both the services of an MLO and real estate broker? The individual compensated must actually perform both services. The individual must provide a bundled services discount to the party for the services. The individual must allow the borrower to shop elsewhere for the services offered. The individual must disclose the charges normally charged for both services.

The individual must provide a bundled services discount to the party for the services. Explanation: When an MLO is also licensed as a real estate broker, there is no requirement to discount services when offered together. However, when an MLO receives a payment for providing additional settlement services as part of a real estate transaction, Regulation X requires such payment be for services that are actual, necessary, and distinct from the primary services provided by the MLO. In addition, the MLO must make the same disclosure as required for an affiliated business arrangement including the nature of the relationship and financial benefit received from the arrangement.

How many days in advance of transferring a loan to another lender must the current mortgage servicer inform that customer of the transfer to another lender who will subsequently be servicing the loan? 15 3 45 20

Under RESPA, the former servicer is required to provide a disclosure at least 15 days before the effective date of transfer, this letter is referred to as the Goodbye Letter.

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

aids in identifying discriminatory lending patterns.

Applicant Amy is given a Written List of Settlement Service Providers at the same time she receives a Loan Estimate. The list of settlement service providers includes referrals to lender affiliates. The AfBA disclosure must be provided to Amy within three days of a complete application. at the same time she receives the Written List of Settlement Service Providers. within four days of consummation. within three days of the Written List of Settlement Service Providers being provided.

at the same time she receives the Written List of Settlement Service Providers.

According to the Fair Credit Reporting Act, seven years is the maximum length of time information can be reported on a credit report, EXCEPT for a bankruptcy filing. mortgage loan with delinquent payments. charged-off delinquent credit card account. paid tax lien.

bankruptcy filing, If a consumer files a Chapter 7 bankruptcy, the consumer will probably have to wait a full 10 years for the derogatory mark to drop off credit reports. A completed Chapter 13 bankruptcy and the accounts included in it should disappear from the consumer's credit reports seven years from the date the bankruptcy was filed. Seven years after an account becomes delinquent and seven years after a tax lien or judgment has been paid, CRAs must remove the negative information.

The Federal Trade Commission's Telemarketing Sales Rule prohibits telemarketers from calling anyone before 7 a.m. or after 9 p.m. before 8 a.m. or after 5 p.m. before 7 a.m. or after 5 p.m. before 8 a.m. or after 9 p.m.

before 8am or after 9pm

As defined and used throughout Regulation Z when referring to the delivery requirements for a Loan Estimate and Closing Disclosure, _____ means the time that a consumer becomes contractually obligated on a credit transaction. title transfer loan closing consummation lien possession

consummation

MLO Korina has started an application for applicant Brock. It is a violation of TRID if she collects any fees before she provides Brock with a Loan Estimate with the exception of the collection of a(n) appraisal fee. application processing fee. title search fee. credit report fee.

credit report fee, TRID sets forth that no fee, with the exception of a bona fide and reasonable credit report fee, may be received by an MLO or lender until the borrower has received the initial application disclosures, including the Loan Estimate, and the MLO/lender has acknowledged the borrower's intent to proceed with the mortgage loan.

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

doctors, The Red Flags Rule applies to financial institutions and creditors, that includes, but is not limited to finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies; or any other company that advances funds or routinely interacts with consumer credit agencies when performing a service and receiving payment once the work is complete. Lawyers, doctors, and other service providers are not classified as 'creditors' for the purpose of the Red Flags Rule.

The TILA-RESPA Rule applies to mortgages secured by mobile home. home equity lines of credit. reverse mortgages. home equity loans.

home equity loans

The servicer must notify the borrower at least ____ during the escrow account computation year if there is a shortage or deficiency in the escrow account. twice once monthly quarterly

once,

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? Origination Charges Services Borrower Did Not Shop For Closing Costs Prepaids

origination charges

According to the Truth in Lending Act, a borrower closing on what loan type must be given notice of the right to rescind the loan? construction non-owner occupied refinance purchase owner-occupied refinance

owner occupied refinance

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

protect consumers from identity theft

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, this is a changed circumstance that allows for a revised LE but the initial estimate must still be used for good faith analysis. this is not a changed circumstance that allows for a revised LE that can be used for good faith analysis. this is a changed circumstance that allows for a revised LE that can be used for good faith analysis. More information is needed to determine if this is a changed circumstance that allows for a revised LE used in the good faith analysis.

this is a changed circumstance that allows for a revised LE that can be used for good faith analysis.

If a revised Loan Estimate is emailed to a potential borrower, it is considered received the seventh business day after the email is sent. the next business day after the disclosure is emailed. the day the email is sent. three business days after the email is sent if not informed of receipt by the borrower sooner.

three business days after the email is sent if not informed of receipt by the borrower sooner.