Practice Exam

FHA loan is conventional or non-conventional

non-conventional

The temporary authority to act as a state-licensed MLO will expire in how many calendar days after the date the applicant was issued a temporary license?

120

A lender is in violation of Regulation N if it does 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.

24 Anyone subject to Reg N must keep copies for 24 months.

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.

5

At what point must a creditor automatically terminate private mortgage insurance on a conventional loan?

when a borrower has paid down to 78% of the original consummated value They have the OPTION to at 80%

Mary finally is building that dream home in the country on the five acres she has owned for seven years. Can she use the equity in the land in lieu of cash for a down payment on a construction loan?

yes, regardless of whether the land is free and clear, as long as there is enough equity

Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

Chap 7 = 10 yrs Chap 13 = 7yrs

What federal legislation requires that all printed advertising include the Equal Housing Opportunity logo?

FHA The Fair Housing Act requires that the Equal Housing Opportunity logo be displayed in all printed material and the term "equal housing lender" must be used when broadcasting over the airwaves.

A Direct Endorser is a lender who is authorized to underwrite what type of loan applications?

FHA-insured = DE

Section 502 loan

Have fixed rates based on current market rates interest rates can be modified as low as 1% 33yr payback period No down payment

The most common fraudulent action on the part of the appraiser is

Inflating the value

What cost is included in an APR calculation?

Mortgage insurance The APR reflects the total cost to borrow money. Mortgage insurance is one of those costs, but the others are merely costs associated with buying property, not necessarily with a mortgage, and so are not part of the APR calculation shown on the Closing Disclosure.

According to the Interagency Guidance on Nontraditional Mortgage Products, nontraditional mortgage loans may be LEAST risky for borrowers with

Low debt-income ratio

On the Closing Disclosure, applicable secondary market charges passed onto the borrower must be properly identified as

Origination Charges = Secondary market charges Secondary market charges must be properly identified as origination charges.

When a CRA investigates an item on a credit report which is disputed by a consumer and finds that it is an error, the CRA must do which of the following?

expunge the item from all future reports

Which of the following is NOT a document that requires the inclusion of a licensee's assigned NMLS unique identifier?

Unique identifiers are required on credit applications, a note or loan contract, security instruments, the Loan Estimate, the Closing Disclosure, and advertisements.

As part of an appraisal being conducted for a residential property, what element would be considered part of the gross living area?

bedroom's walk-in closet Only heated, finished living areas above grade are considered in the square footage for the gross living area.