Compucram missed questions
When a mortgage loan meets the criteria of a higher-priced mortgage loan and the price reflected in the consumer's purchase agreement exceeds ____ of the seller's original acquisition price during the first 90 days, lenders are required to obtain a second appraisal.
10 %
How many hours of CE do you need
10 hours 3- fed law and regulations 2- ethics which must include fraud, consumer protection and fair lending issues 2-instruction on lending standards for non traditional mtg products 1- undefined instruction pertaining to loan origination 2- Oregon specific defined electives
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
How many questions in the test?
125 only 115 scored
How many hours of lending standards for non traditional mortgage products
2 hours
According to Fannie Mae and Freddie Mac, the maximum qualifying ratios for a conventional conforming loan are
28/36
The _____ enforces the Fair Housing Act including investigating any cases concerning the refusal to rent or sell a property, denying someone a dwelling, and falsely stating that properties are unavailable.
Department of Housing and Urban Development
Regulation B implements what law
ECOA
Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan?
ECOA
The Fair Housing Act requires a lender to use what term in any advertisement broadcast over the airwaves?
Equal Housing Lender
Who primarily investigates mortgage fraud in the United States?
FBI
Question (2 of 32) What mortgage program has an upfront mortgage insurance premium?
FHA-insured
The federal ____ prohibits discrimination in housing based on race, color, religion, sex, national origin, disability, or familial status in the sale or lease of residential property.
Fair Housing Act
What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves?
Fair Housing Act
Of these industry insiders, who is most likely to have been involved in preparing a fraudulent sales contract?
Real estate agent
Mortgage loan originators are prohibited from
telling an appraiser a minimum value needed to approve the loan.
Underwriters on loans guaranteed by the VA do NOT consider
the housing expense ratio.
A higher-priced mortgage loan is one that
uses the average prime offer rate as an index to compare the annual percentage rate.
Ray is employed to take residential mortgage loan applications for a federally-chartered bank. To do this job, Ray must be a
registered mortgage loan originator.
If a loan includes an escrow account, the lender is allowed to require a cushion of up to two months, according to what law?
RESPA
If the final APR at settlement deviates by more than ______ from the initial APR on the preliminary Closing Disclosure on an irregular loan, an additional waiting period is triggered.
1/4%
The Federal National Mortgage Association (Fannie Mae) is
designed to increase availability of money to primary lenders.
As set forth by Regulation Z (Section 35) for higher-priced mortgage loans, if the price reflected in the consumer's purchase agreement is more than ___ higher than the seller's acquisition price during the first 90 days, lenders are required to obtain a second appraisal.
10 %
A seller takes back a $150,000 mortgage at 6% interest. Payments are interest-only for 10 years. What balloon payment amount will be due?
$150,000 - The entire principal must be repaid at the end of the loan term since the borrower paid only interest for 10 years.
With a VA-guaranteed loan, the lender may charge a flat fee, not to exceed ____of the loan amount, to cover the lender's costs and services for originating the loan.
1%
What are the 3 types of appraisal approaches?
1. Sales comparison approach 2. Cost approach 3. Income approach
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
3 business days after the lender receives a complete application.
How many hours of ethics including instruction on fraud, consumer protection, and fair lending issues
3 hours
How many hours of federal law and regulations?
3 hours
When a suspect is identified, a financial institution must file a Suspicious Activity Report no later than ____ calendar days after the date of initial detection of the facts that constitute the basis for filing of the report.
30
What is the maximum penalty for committing the federal crime of mortgage fraud?
30 years in prison and $1,000,000 fine
One of the qualifying standards for a conventional conforming mortgage is that the borrower's total debt obligations DO NOT EXCEED what percentage of stable monthly income?
36 %
How many hours of Oregon specific electives?
4 hours
A servicer must submit an initial escrow account statement to the borrower at settlement or within ___ calendar days of settlement for escrow accounts that are established as a condition of the loan.
45 days
A borrower offers to purchase a home for $120,000. His first mortgage amount is $90,000 and the seller is providing a second mortgage of 15% of the sale price. The borrower provides the balance as a cash down payment. What are the LTV and CLTV?
75% / 90%
How many hours of general electives?
8 hours
Which scenario best describes a land contract?
A buyer makes installment payments to the seller in exchange for the right to occupy the property; no deed transfers until all payments have been made or a specified point in the payment agreement.
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 higher-priced mortgage loan is defined as a loan where the APR of a mortgage loan exceeds the average prime offer rate by 1.5% for a first mortgage lien, 2.5% for a first lien jumbo loan, or 3.5% for a subordinate mortgage lien.
According to Regulation Z, creditors granting loans meeting HOEPA higher-priced mortgage loan criteria may not assess late fees in excess of ___ of past due payments or pyramid late fees.
According to Regulation Z, creditors granting loans meeting HOEPA high-cost or higher-priced loan criteria may not assess late fees in excess of 4% of past due payments or pyramid late fees.
Income Approach
Allows investors to estimate the value of a property based on the income the property generates. It is used by taking the net operating income of the rent collected dividing it by the capitalization rate.
Section 326 of the USA PATRIOT Act amended the Bank Secrecy Act to require financial institutions to establish written a customer identification program (CIP). Which statement is FALSE as it relates to an institution establishing a CIP program?
An individual must provide a residential or business street address; no other address is acceptable.
The ____ is typically the perpetrator in a fraud for property scheme.
Appraiser
Borrower Cade signs the note and mortgage for a refinance on his principal residence on Thursday, December 31. What is the earliest day the funds for his loan can be disbursed (assuming no bona fide financial hardship)?
Borrower Cade signs the note and mortgage for a refinance on his principal residence on Thursday, December 31. What is the earliest day the funds for his loan can be disbursed (assuming no bona fide financial hardship)?
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
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.
Fixed Disbursement Plan
What act requires all financial institutions and institutions that receive consumers' financial information to design, implement, and maintain safeguards to protect customer information?
Gramm-Leach-Bliley Act
The SAFE Act sets forth that states must establish minimum standards for licensing and registration for state-licensed MLOs. Which statement does NOT reflect a pre-licensing education or testing standard that must be established as part of MLO state license law?
If the SAFE MLO pre-licensing exam is failed three consecutive tests, the applicant must wait one year before taking the test again.
When was TILA enacted
In 1968 as Title I of the Consumer Credit Protection Act
Which element of an ARM is a statistical report that is a generally reliable indicator of the approximate change in the cost of money and may be used to adjust interest rates?
Index
Which statement about the Secure and Fair Enforcement for Mortgage Licensing Act is FALSE?
It mandates 12 hours of annual continuing education for loan originators.
The U.S. Department of Veteran's Affairs (VA)
guarantees residential loans for veterans.
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
Make redisclosure
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
Margin
During a telephone application, David states he has 10% down to work with to buy a home in the mountains. He may use it himself occasionally as he loves to ski, but plans to use it primarily for weekly rentals. The MLO can only offer 75% LTV for a rental property, but 90% for a vacation/second home. The MLO decides to call this property a second home on the application. What type of mortgage fraud is this?
Material Misstatement
When preparing a Loan Estimate, commissions of real estate brokers or agents are listed in what subsection?
Other
HMDA is implemented by regulation
Reg C
Which federal regulation limits the length of time that adverse collection information may appear in a consumer's credit report?
Regulation V
What rule requires all financial institutions to design, implement, and maintain safeguards to protect customer information while it is in the custody and control of the institution and its agents?
Safeguards rule
What tax form is used to review the income of a sole proprietor?
Schedule C
_____interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.
Simple
Lender Dick has obtained a complete mortgage loan application from borrower Jane. Within three days of receiving her application, Dick must provide Jane with a list of ____ HUD-approved housing counseling agencies that she can shop for.
Ten
Cost Approach
The process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation.
The estimate for the interest rate shown on a Loan Estimate must be available for at least ___ business days
There are no restrictions
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?
There are three triggers for HOEPA. There is an APR test, a points and fees test, and a prepayment penalty test. For loan amounts in excess of $20,000, HOEPA is triggered when points and fees exceed 5% of the loan amount. Mortgage broker fees are included in this computation. Since Bobbi has applied for a $300,000 loan, HOEPA would be triggered once the points and fees exceed $15,000. Subtracting $10,000 from this amount leaves $5,000 available for broker fees before triggering HOEPA.
Sales Comparison Approach
This approach is an analysis of recent sales that are the most comparable to the subject property. Must utilize a minimum of 3 comparable sales that were settled or closed within the last 12 months. Must comment on sales that are more than 6 months old.
What is the minimum number of comps required by most secondary lenders to ensure an accurate estimate of value when performing the market appraisal approach?
Three
Each state's regulatory authority must establish procedures for
examining records of loan originators.
When the broker negotiates a higher rate than the lender offers, the lender pays the broker
Yield spread premium
The tolerance for change for transfer taxes as provided on the Loan Estimate and Closing Disclosure is
Zero
To be eligible for an FHA-insured loan, one must be
a U.S. citizen, permanent resident, or non-permanent resident with a work visa.
A 360/180 loan typically has
balloon payment
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.
The Federal Trade Commission's Telemarketing Sales Rule prohibits deceptive and abusive telemarketing acts and practices including establishing standards of conduct for telemarketing calls. This Rule prohibits telemarketers from calling anyone
before 8 a.m. or after 9 p.m.
HECM programs impose an additional condition on prospective borrowers by requiring them to participate in a consumer counseling session given by an approved counselor
before they can apply for the loan.
All of the following are listed in Section B of BOTH the Loan Estimate and Closing Disclosure as services a borrower cannot/did not shop for EXCEPT the
borrower's title insurance premium.
Real estate agent Ike tells mortgage broker Tina that he will send her all of his clients if she'll give him $100 for each loan she closes. Although Tina turns him down, she does decide to send Ike tickets to a football game to thank him for referring his clients anyway and he accepted them. Who has committed an act prohibited by RESPA?
both since any gratuity could be considered a kickback
A borrower elects to lower his settlement costs by paying a slightly higher interest rate. This appears on the Loan Estimate as a
credit to the borrower
According to the Gramm-Leach-Bliley Act, what item is NOT considered nonpublic personal information and, therefore, is not protected?
recorded mortgages
The Equal Credit Opportunity Act prohibits discrimination in granting credit and prohibits a creditor from discouraging someone from applying for a loan on the basis of all of the following EXCEPT
job stability.
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 which of these loan types?
loan secured by condominium unit
Which of the following is NOT a function performed by the Consumer Financial Protection Bureau?
maintain competition to promote a marketplace free from anticompetitive mergers, business practices, or public policy outcomes
A ____ is a type of security instrument where the borrower (the mortgagor) conveys an interest in property to the lender (the mortgagee) as collateral for the debt, creating a voluntary lien on the property.
mortgage
On the Closing Disclosure, applicable secondary market charges passed onto the borrower must be properly identified as
origination charges.
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
prohibiting high-cost loans with adjustable rates.
Which of the following is NOT a responsibility imposed on states to ensure licensee compliance with the SAFE Act?
provide surety bond coverage for each licensee
Which situation is NOT a red flag that a prohibited property flipping act may be taking place?
purchasing and remodeling a house and selling it for quick profit
At the time that Dan applied for a mortgage with MMM and received an initial Loan Estimate (LE), he did not lock an interest rate. Two weeks later, Dan decides to pay the fee and lock the rate with MMM. While preparing the revised LE to reflect the new rate lock fee, the MMM underwriter notices that received appraisal and title fee invoices are slightly higher than originally disclosed. MMM sends Dan a revised LE that reflects new fees. For good faith calculation purposes, which of the following fees paid at consummation will be compared to the REVISED Loan Estimate?
rate lock extension fee
When a lender provides required advertising disclosures verbally over the telephone to a potential borrower, clear and conspicuous means all of the following EXCEPT
within a reasonable time frame.
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