NMLS

What would be the minimum down payment on a VA loan of $150,000? -$4,500 -$5,250 -$7,500 -$0

$0

Aggregate escrow requires that the borrower have which of the following? -$0 in the account or no more than 2 months impounds in reserves -$0 in account, or no more than 1 month impound in reserves -No more than 1% of the principal balance of the loan maximum in the impound account -$100 and no impound reserves

$0 in the account or no more than 2 months impounds in reserves

Penalties for violations are assessed per day. A "Knowing" violation is how much? -$10,000 -$25,000 -$50,000 -$1,000,000

$1,000,000

Calculate the borrower's maximum housing payment if the qualifying ratios are 28/36, the husband's income is $48,000 per year, and the wife makes $2,500 per month? -$2,044 -$1,820 -$2,628 -$2,340

$1,820

Under RESPA what is the dollar fine that can be imposed for each instance of a referral fee kickback or unearned fee? -$5,000 -$7,000 -$10,000 -$15,000

$10,000

What are the penalties for giving a referral fee to a realtor?-There are no penalties. -$10,000 per incident and up to one year in jail -$100,000 plus up to 30 years in jail -$1,000,000 plus up to one year in jail

$10,000 per incident and up to one year in jail

What are the penalties for violating Section 8 of RESPA? -$5,000 per incident and up to one year in jail -$10,000 per incident plus one year jail time -$100,000 plus up to 30 years in jail -$1,000,000 plus up to one year in jail

$10,000 per incident plus one year jail time

What is the penalty for a loan officer violating RESPA by paying a referral fee to a real estate agent? -$10,000/three years prison -$10,000/one year prison -$1,000/one year suspension -$5,000/one year prison

$10,000/one year prison

On an interest-only loan of $216,000, 30 years, at 7.25% interest, how much interest would be paid in nine months? -$11,745.00 -$12,933.75 -$11,236.96 -$12,997.63

$11,745.00

When a telemarketer calls a person on the do-not-call list the telemarketer is subject to a fine of: -$16,000.00 -$12,000.00 -$7,500.00 -$5,000.00

$16,000.00

Andrew has been paying interest-only payments on his mortgage of $500 a month for the past 10 years, the interest rate on the loan was 4%. At year 15, he will be required to pay a balloon payment. The principal balance at the time the loan closed was $172,000. What will be the balloon payment? -$103,200 -$68,800 -$172,000 -$170,000

$172,000

If an applicant works 40 hours a week and is paid $ 14.26 per hour, what is the applicant's average monthly income? -$2,487.68 -$2,281.60 -$2,471.73 -$2,444.57

$2,471.73

You are wondering what the total amount of interest your borrowers will pay on their 30 year fixed rate loan--if they kept that loan for its full 30 years. On the TIL you calculate the Amount Financed to be $145,000. Your customers P&I payment is $975.00 per month. Based on this information, what will be the amount of interest your customer will pay over the 30 year period? -$206,000 -$351,000 -$145,000 -$148,717

$206,000

A buyer had made an earnest money payment of $5,000. Later the buyer pays an additional $2,000 to be credited at closing on a property with a sale price of $160,000. If the required down payment is 20%, how much additional money will the buyer need to provide toward the down payment at closing? -$32,000 -$27,000 -$30,000 -$25,000

$25,000

If a loan originator violates or fails to comply with requirements in a temporary cease and desist order, the Regulator may impose a civil penalty of up to how much? -$10,000 -$15,000 -$25,000 -$30,000

$25,000

The Regulatory Authority may impose penalties for each violation up to, and not exceeding: -$25,000.00 -$10,000.00 -$5,000 -The Regulatory Authority is not permitted to impose penalties.

$25,000.00

68.What is the penalty for Red Flag non-compliance? -$5,000 per incident -$2,500 per incident -$10,000 per incident -$3,500 per incident

$3,500 per incident

Gregory's loan is $125,000. For it to be considered a qualified mortgage, the points and fees cannot exceed what amount? -$3,750 -$6,250 -$5,000 -$10,000

$3,750

The borrowers want a conventional loan for a $150,000.00 new home purchase. They do not want to pay for mortgage insurance. They have enough money to put down, but want to put the minimum down required that would allow for no mortgage insurance. What amount would be needed for the down payment? -$40,000.00 -$20,000.00 -$33,000.00 -$30,000.00

$30,000.00

A mortgage company telemarketer has been accused of inappropriately calling two consumers on the National Do Not Call Registry. What is the maximum fine the company could face for this violation? -$11,000 -$16,000 -$20,000 -$32,000

$32,000

A person was purchasing an income property which was scheduled to close and fund on June 25th. Rent of $1800 was paid for the month of June on the 1st. What was the buyer's proration amount? -$300 -$210 -$296 -$360

$360

What are the Fannie Mae / Freddie Mac loan limits as of 01-01-2012? -$417,000 -$225,500 -$322,700 -$359,650

$417,000

For loans purchased by FNMA or FHLMC, the conforming limit for 2012 is: -$322,700.00 -$333,700.00 -$417,000.00 -$300,700.00

$417,000.00

Hannah is purchasing a new property. The taxes on her new home are $1200 a year and the hazard insurance on her new home are $1400 a year. How much can the lender collect at closing to start Hannah's escrow account? -$217 -$432 -$200 -$316

$432

Liza is purchasing a new home. The purchase price of the home is $200,000. She has put down $2,000 in earnest money. If she is receiving FHA financing, how much more will she need for her down payment? -$7,000 -$5,000 -$4,000 -$18,000

$5,000

For an interest only loan of $180,000 with a 5% interest rate, how much is the dollar amount of interest for 7 months? -$5,500 -$6,500 -$9,000 -$5,250

$5,250

Agatha wants to purchase two discount points, and there are two origination points on her loan. The sales price of the property is $150,000, and she is putting 10% down on the property. How much are the discount points and origination points going to cost her? -$5,400 -$6,000 -$1,500 -$1,350

$5,400

The buyers purchased a home for $175,900. They put 10% down, and were charged an origination fee of 1% and discount points of 2.5%. How much money did the buyers have to bring to cover the origination fee and discount points? -$5,540.85 -$6,156.50 -$18,350.00 -$24,130.25

$5,540.85

The borrower is putting 10% down on a $180,000 sales price. She is paying 2.5 discount points and a 1% origination fee. What is the total of the origination fee and discount points she is paying? -$5,670 -$6,300 -$1,800 -$6,120

$5,670

When filling out the loan application, amounts entered should be rounded to the nearest: -$100.00 -$50 -$1,000.00 -$1.00

$50

For an interest-only loan of $210,000 with an interest rate of 3%, what would the monthly interest payment be? -$525 -$630 -$360 -$750

$525

What would be the minimum down payment on a FHA loan of $200,00? -$7,000 -$6,000 -$20,000 -$40,000

$7,000

Reginald works a full-time job as a schoolteacher and makes $43,000 a year. He also has been working a part-time job for the last two years working 10 hours a week at $10.50 an hour. His wife, Julia, works as a medical assistant and makes $22.50 an hour and works 45 hours a week. What is their gross monthly income? -$3,762 -$4,631 -$7,207 -$8,426

$8,426

A borrower wants a Cash Out refinance for 80% LTV on a house that appraises for $250,000. The borrower has a first mortgage of $87,000 and a second for $25,000. Closing costs will equal $3,000. How much cash is available for the borrower to receive? -$30,000 -$85,000 -$115,000 -$200,000

$85,000

A borrower purchases a home for $120,500 and is putting 10% down. If he has already paid $2,500 in earnest money, what is the rest of the down payment at closing? -$8,345 -$8,550 -$9,550 -$10,500

$9,550

Jamie is looking to refinance his property. He currently owes $55,000 on a first mortgage and pays a 4% interest rate on it. He also owes $5,000 on a HELOC paying 6% interest on it. He wants to obtain some cash-out and is expecting to get at least $30,000. The appraisal came in at $200,000. He also has a tax lien of $1,200 on the property and $4,000 in credit card debt he'd also like to eliminate. He qualifies for an 80% LTV and the closing costs are going to be $3,000 on the new loan. How much cash will Jamie have available? -$93,000 -$97,000 -$91,800 -$95,800

$91,800

Which of the following is a purpose of RESPA? -To regulate interest rates -To monitor high cost loans -To eliminate kickback and referral fees -To track real estate settlement trends

To eliminate kickback and referral fees

What is a purpose of the Truth in Lending Act? -To enable consumers to compare the cost of credit from lender to lender -To keep loan officers honest -To prevent kickback and referral fees -To oversee commercial lending

To enable consumers to compare the cost of credit from lender to lender

Which of the following is a purpose for the Mortgage Servicing Disclosure Statement? -To disclose the percentages of loans this lender has serviced in the last 3 years -To inform the borrowers that they have certain rights under the law -To inform the borrower that the servicing of the mortgage may be or has been transferred -To inform the borrower the percentages of servicing that has been sold, assigned or transferred

To inform the borrower that the servicing of the mortgage may be or has been transferred

The Secretary is required to submit periodic reports to Congress of the effectiveness of the S.A.F.E. Mortgage Licensing Act. Which of the following is NOT a reason for why the Secretary is required to do so? -To strengthen consumer protections -To keep interest rates low to encourage home ownership -To streamline communication between all stakeholders involved in residential mortgage loan origination and processing -To establish performance based bonding requirements for mortgage originators or institutions.

To keep interest rates low to encourage home ownership

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

To originate loans

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

To provide coverage for the lender or owner Correct Choice:4

In general there are two minimum standards for license renewal for State-licensed loan originators. The first is that the loan originator continued to meet the minimum standards for license issuance. What is the other minimum requirement? -To obtain recognition for outstanding practices -To satisfy annual continuing education requirements -To join a group, such as the NAMB or MBAA and maintain good standing -To reduce personal debt and increase personal assets

To satisfy annual continuing education requirements

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

To verify the absence of property flipping

Conforming loans most often use a loan application known as the: -Uniform Residential Loan Application. -Short Form Residential Loan Application. -GNMA Residential Loan Application. -Freddie Mac form 92900A

Uniform Residential Loan Application.

URLA is the acronym for: -Uniform Residential Land Appraisal. -Uniform Residential Loan Application. -Uniform Residential Lot Appraisal. -Universal Residential Loan Application.

Uniform Residential Loan Application.

What is an unacceptable source of funds for down payment on a Fannie/Freddie Loan? -The selling of an asset -Unverifiable cash on hand -A bonus from an employer that does not have to be repaid -A gift from the employer

Unverifiable cash on hand

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

Up to $1,000,000 fine and jail time

In a face-to-face application, what do you do if the borrower refuses to fill out the race, ethnicity and gender section on Section X of the 1003? -Continue with the loan application, but be sure to get the information completed before submitting the loan to the underwriter. -Process and complete the loan entirely without the information. -Use your best guess and complete the information in Section X of the 1003. -End the application process.

Use your best guess and complete the information in Section X of the 1003.

What kind of loan uses residual income as part of the qualifying process? -FHA -Conventional -Jumbo -VA

VA

What type of mortgage requires a funding fee? -VA -USDA -Conventional -FHA

VA

Which of the following would NOT be counted as income? -Income from a Trust -Payments from a note or mortgage that will continue for at least the next 36 months -VA fully authorized education benefits -Part-time income, if verified that it has not been interrupted for the past two years and is likely to continue

VA fully authorized education benefits

It is prohibited to advertise all of the following except: -"immediate approval" -"immediate closing" -"instant closing" -VA lender

VA lender

Which type of loan application requires a residual income analysis to be performed? -FHA loan -Jumbo -VA loan -Conventional

VA loan

Surety bonds must be maintained by: -licensees who will originate less than $7,500,000. -licensees who will originate $7,500,000 to $14,999,999.99. -licensees who will originate $15 Million to $29,999,999.99. -all licensees, unless excluded by the Regulatory Authority.

all licensees, unless excluded by the Regulatory Authority.

VA is the acronym for: -Verification and Admissions. -Veterans Administration. -Veteran Affairs. -Variable Add-ons.

Veteran Affairs.

Mortgage insurance benefits the borrower by: -allowing borrowers to obtain financing with lower down payments and higher LTVs. -making the payments if the borrowers lose their jobs. -paying off the home in the event of the death of any of the borrowers. -paying off the mortgage in the event of a fire.

allowing borrowers to obtain financing with lower down payments and higher LTVs.

Which of the following circumstances does NOT warrant a loan officer inquiring about a spouse? -When they are visually seen together by the MLO -Income from the spouse will be used to qualify for the loan -When the spouse will be obligated on the loan -When inquiring about liabilities

When they are visually seen together by the MLO

Which of the following situations always require full tax returns as documentation of income? -When proof of hourly wages are needed -When verifying self-employment income -Full tax returns are never required just the Adjusted Gross Income on the first page -When receiving W-2 only income

When verifying self-employment income

If the APR on a fixed rate loan increases from the initially disclosed rate by more than which of the following, an additional waiting period is triggered before the loan can close? -.125 percent -.250 percent -.375 percent -.500 percent

.125 percent

Jordan has a bankruptcy on her credit report. How long can that bankruptcy continue to stay on her credit report? -10 years -7 years -5 years -2 years

10 years

If two borrowers own property in joint tenancy, each borrower has what percent of ownership? -0%, the lender owns the property until the lien is paid in full -The percentage is determined by how much is written on note or deed -100% -50%

100%

The written Verification of Employment (VOE), is also known as FNMA form: -1005 -1099 -1006 -1031

1005

The Verification of Deposit (VOD) is also known as FNMA form: -W-2. -1099 -1031 -1006

1006

If a lender transfers the servicing of a mortgage, it must inform the borrower at least how many days in advance of the effective date of transfer? -15 -30 -60 -90

15

Regarding Mortgage Servicing Transfers, what are the number of days that the current mortgage servicer must inform that customer prior to transferring the loan to another lender - who will subsequently service that loan. How many days prior to this loan transfer does the current mortgage servicer have to inform the customer? -15 -20 -3 -45

15

How much notice is the lender required to give the borrower before transferring the "servicing" of the loan? -10 Days -45 Days -30 Days -15 Days

15 Days

What is the minimum amount of time that a lender has to inform the borrower that they are transferring servicing? -15 days -45 days -10 days -60 days

15 days

A borrower's name is on the National Do Not Call list. At what point after the loan closes and is sold to another company must the MLO stop contacting the borrower to solicit new business? -Immediately -After three months -One year -18 months

18 months

What is the guideline regarding length of history for a second job to be included as qualifying income? -6 months -1 year -2 years -3 years

2 years

How many years of residency history do you need to document on the 1003 for each borrower? -Only 1 year if they lived with parents -1 year if they rented prior to the purchase -2 years for both borrowers -2 years for at least one of the two borrowers

2 years for both borrowers

The borrower's gross monthly income is $5,000. The new mortgage loan will reduce his monthly payment to only $1,000 per month. The borrower will still owe a car payment of $350 and a student loan payment of $250. The borrower also has a cell phone bill of $90 per month. What is the borrower's new Housing Ratio? -20% -27% -32% -33.80%

20%

When must the Home Loan Toolkit be provided to the borrower? -3 days after application -3 days before closing -At the time of application -7 days after application

3 days after application

MDIA requires the appraisal be given to borrowers: -1 day before settlement. -3 days before settlement. -30 days after settlement. -Immediately after settlement.

3 days before settlement.

As part of a mortgage loan originator applicants pre-licensing education, how many hours must be focused on federal law? -2 hours -3 hours -4 hours -10 hours

3 hours

A potential borrower calls you for rates and programs. Assume that they are on the DNC Registry. You are allowed to call them back for what period of time? -30 days -3 months -1 year -18 months

3 months

If an applicant does not initially pass a test, they may retake the test after waiting at least 30 days. How many times may an individual retake a test before having to wait longer than 30 days? -Once -6 times -3 times -4 times per year

3 times

A refinance loan closes and funds. The lender forgot to tell the borrowers about the right of rescission. How long do the borrowers have to rescind the loan? -3 days -3 months -3 years -Only until the first payment is due

3 years

How long must a brokerage owner keep records? -3 years -4 years -5 years -7 years

3 years

If a loan is a refinance, and the loan is improperly closed and funded in one day with no three day rescission period, how long do the borrowers have to rescind the transaction? -1 day -3 days -1 week -3 years

3 years

Income used to qualify must have been received for 2 years and be likely to continue for at least: -3 years. -5 years. -1 year. -Indefinitely.

3 years.

If an applicant has been denied credit, how long does the lender have to get a letter of adverse action to him/her? -10 days -15 days -30 days -It is not necessary to send a letter as long as the borrower knew before they applied they had bad credit.

30 days

If the file is inactive for borrower non-performance a declination letter must be sent within? -10 days -15 days -30 days -It is not necessary to send a letter if the file is merely inactive.

30 days

Lucy has taken the National Test Component with the Uniform State Test two consecutive times and failed, how long must she wait before she can take it again? -30 days -6 months -60 days -90 days

30 days

Under ECOA, the lender is required to provide the borrower a reason for denial. How long does the lender have to provide that reason? -60 days -90 days -30 days -120 days

30 days

When is a Notice of Adverse action required when the borrower applies for a loan? -10 days -30 days -60 days -90 days

30 days

Daniel is looking to qualify his borrower for a conventional loan. He is attempting to determine the borrower's back-end debt-to-income ratio. What is the maximum back-end DTI ratio that Daniel can use on a conventional loan? -41% -36% -28% -32%

36%

When an underwriter is manually underwriting a Freddie Mac/Fannie Mae loan without compensating factors, what is the maximum debt ratio allowed? -34% -41% -36% -38%

36%

After the crisis of the Great Recession according to FHA underwriting when can a borrower repurchase again after a foreclosure? -7yrs from the credit report date -5yrs from the credit report date -2yrs from the credit report date -3yrs from the credit report date

3yrs from the credit report date

After the crisis of the Great Recession according to FHA underwriting when can a borrower repurchase again after a short sale? -7yrs from the credit report date -5yrs from the credit report date -2yrs from the credit report date -3yrs from the credit report date, or immediately if there was no late mortgage payments.

3yrs from the credit report date, or immediately if there was no late mortgage payments.

How many days prior to consummation or closing is the final Loan Estimate required to be provided to the borrower? -21 days before consummation or closing -10 days before consummation or closing -7 days consummation or closing -4 days consummation or closing

4 days consummation or closing

There are two ratios commonly used to qualify the buyer. What are they? -Debt ratio and net income ratio -Investment ratio and mortgage ratio -Income ratio and expense ratio -Housing ratio and total debt ratio

4.Housing ratio and total debt ratio

According to the Qualified Mortgage Rule, what is the maximum percentage limit on the total obligation debt to income ratio for a qualified mortgage? -41% -36% -28% -43%

43%

Which form allows the lender to verify your client's tax returns? -W-2 -4506-T -1099 -DD-214

4506-T

After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a short sale? -7yrs from the credit report date -5yrs from the credit report date -3yrs from the credit report date -4yrs from the credit report date

4yrs from the credit report date

After the crisis of the Great Recession according to Conforming and High Balance underwriting when can a borrower repurchase again after a Chapter 7 bankruptcy? -7yrs from the discharge date -5yrs from the discharge date -2yrs from the discharge date -4yrs from the discharge date

4yrs from the discharge date

When purchasing a 2-4-unit property according to FHLMC/FNMA guidelines, how many months of reserves are required? -6 months -1 month -3 months -1 year

6 months

FHA allows seller concessions. What is the maximum amount of seller concessions allowed on an FHA loan? -10% -4% -6% -8%

6%

What is the note rate for a $150,000 loan with a 2/1 buy down when the borrowers start with a payment rate of 4% for 12 months; then 5% for another 12 months; then 6% for the rest of the payment term? -The note includes all three interest rates. -4% -5% -6%

6%

293.On an FHA annually adjusting ARM, assume that the starting rate was 5%; the margin is 2.5%; the index in 6 months is 3%; the index in 12 months is 3.5%; the index in 18 months is 3.25%. What is the borrower's interest rate in 18 months? -5.00% -6.00% -5.50% -5.75%

6.00%

According to MDIA, what is the waiting period once initial disclosures are provided to the borrower before the loan can close? -10 business days -7 business days -5 business days -3 business days

7 business days

The fastest permissible closing time under MDIA is: -3 business days -5 business days -7 business days -10 business days

7 business days

Under the FCRA, when must credit reporting agencies delete obsolete information? -5 years from the date placed for collection or charged off -10 years from the date opened, except for bankruptcies -7 years from the date of last activity, except for bankruptcies -7 years from the date of last activity including bankruptcies

7 years from the date of last activity, except for bankruptcies

After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a foreclosure? -7yrs from the credit report date -5yrs from the credit report date -2yrs from the credit report date -3yrs from the credit report date

7 yrs from the credit report date

What is the loan-to-value ratio if the loan amount is $93,750, the appraised value is $125,000 and the sales price is $130,000? -75% -78% -80% -100%

75%

What percentage of correct answers to questions must be achieved in order to have passed a qualified written test? -65% -75% -80% -90%

75%

How is rental income calculated when the borrower owns rental properties other than the subject property? -100% of the income less the PITI. If the net is positive, include as income; if the net is negative, include as a monthly debt -Only when the borrower has a two year history of managing rental properties -75% of the income less the PITI. If the net is positive, include as income; if the net is negative, include as a monthly debt -Only when the borrower has a two year history of managing rental properties and the borrower has rent loss insurance

75% of the income less the PITI. If the net is positive, include as income; if the net is negative, include as a monthly debt

If a loan with private mortgage insurance was originated after July 1999, then the mortgage insurance must be dropped when the loan reaches the following percentage of the original sales price or appraised value: -88% -80% -75% -78%

78%

The requirement for private mortgage insurance is generally discontinued when the loan-to- value ratio falls below: -20% -50% -78% -90%

78%

Mortgage insurance is required by the lender, based on risk, credit score, length of the loan, fixed or variable and the LTV. The cost for PMI will vary, depending upon these factors. Which of the LTVs below would not be used for determining the cost of mortgage insurance? -85.01-90% -78-80.00% -80.01-85% -90.01-95%

78-80.00%

After the crisis of the Great Recession according to FHA High Balance when can a borrower repurchase again after a Chapters 7 and 11 bankruptcy? -7yrs seasoning -5yrs seasoning -2yrs seasoning -4yrs seasoning

7yrs seasoning

What is not likely to happen if the lender/investor finds fraud? -A 1% interest rate increase on the loan -The lender and/or broker will be required to repurchase the loan -The entire loan can be called due and payable -The loan officer must pay back any premium made on the loan

A 1% interest rate increase on the loan

What type of loan never requires monthly mortgage insurance? -A 100% VA loan -An 80% FHA loan -A 90% LTV conventional loan -An 85% LTV jumbo loan

A 100% VA loan

Which of the following would NOT be a red flag of the possibility of loan fraud? -Sales price is substantially below market value. -Name and address on the deposit check is different from the buyer. -A REALTOR® is involved in the transaction. -Deposit check was not cashed.

A REALTOR® is involved in the transaction.

Anna is looking to purchase a new home. She lives in a small town of under 20,000 people. What loan program would be a good option for her? -A VA loan -A USDA loan -An FHA loan -A conventional loan

A USDA loan

An IRRRL is what type of loan? -A VA streamline loan -An FHA streamline loan -A USDA purchase loan -A VA cash-out loan

A VA streamline loan

A loan paid in a lump sum after a fixed amount of time is called? -A conventional loan -An ARM -A balloon loan -A jumbo loan

A balloon loan

George has a loan that is amortizing over 30 years, but he will be required to pay the remaining principal in 15 years. What is this called? -A balloon payment mortgage -An adjustable rate mortgage -An interest-only mortgage -A reverse mortgage

A balloon payment mortgage

Trevor just received a promotion at work that is going to require him to move across the country. What type of loan might Trevor use to help him between selling his previous home and buying his new home? -A bridge mortgage -A graduated payment mortgage -A reverse mortgage -An adjustable rate mortgage

A bridge mortgage

Which of the following is not an acceptable source for the borrower's down payment on a Fannie Mae loan? -Funds the borrowers have saved in their checking account -Funds from an inheritance -A secured loan from a car that the borrowers own -A cash advance from a credit card if it doesn't show on the credit report

A cash advance from a credit card if it doesn't show on the credit report

Which of the following best describes Fannie Mae? -A government agency that buys FHA and VA loans -A government corporation that sets the interest rates for federally related institutions -A government-sponsored enterprise that purchases loans -A government agency that provides special funds for multi-family properties

A government-sponsored enterprise that purchases loans

Which of the following best describes Freddie Mac? -A government-sponsored enterprise that purchases loans from the primary market -A government agency that provides special funds to multi-family properties -A government agency that deals specifically with VA loans -A government corporation that sets the interest rates for federally related institutions

A government-sponsored enterprise that purchases loans from the primary market

Joanna is looking to purchase a property for $750,000. What type of loan would Joanna need to receive? -A Reverse Mortgage -A bridge loan -A jumbo loan -A line of credit

A jumbo loan

Which is considered an illegal referral fee? -A lead generating company getting a higher fee if the lead closes -MLOs buying leads from a legitimate lead generating company -MLOs pursuing lead from past borrowers -An employee of a lead generating company referring a potential borrower to an MLO

A lead generating company getting a higher fee if the lead closes

A borrower applies for a loan. After pulling the borrower's credit, the loan is denied. Which of the following must occur? -A loan denial letter must be sent to the borrower within 30 days of the date of the application. -The borrower may not get a loan at another Mortgage Company. -A loan denial letter must be sent to the real estate agent. -The borrower must wait one (1) year before applying for an FHA loan.

A loan denial letter must be sent to the borrower within 30 days of the date of the application.

Which of the following is NOT true of a loan originator? -A loan originator takes a residential mortgage loan application. -A loan originator performs purely administrative tasks. -A loan originator offers or negotiates terms of a residential mortgage loan for compensation or gain. -A loan originator assists in the financing of real property

A loan originator performs purely administrative tasks.

What is a feature of an ARM? -A loan amount that never increases -A monthly payment is regular -A loan which can adjust at any time -A loan that has an adjustable feature

A loan that has an adjustable feature

Which of the following would have no Annual MIP (2012)? -A loan with a 79% LTV -A loan with a 78% LTV and a term of 15 years or less -A loan with an 80% LTV -Annual MI is always required

A loan with a 78% LTV and a term of 15 years or less

Which of the following would not be a prohibited under the Loan Originator Compensation Rule? -A mortgage loan originator receives 10% additional for each ARM that they close -A mortgage loan originator receives $1,000 for selling a loan with an interest rate of over 4% -A mortgage loan originator receives a flat fee for each loan that they close -A mortgage loan originator receives a $5,000 bonus for loans over $250,000 that they close

A mortgage loan originator receives a flat fee for each loan that they close

Which of the following was added as a protected class under the Fair Housing Act? -A paraplegic -A person 62 years of age or older -An African-American -An American Indian

A paraplegic

Which one of the following statements about the UFMIP on FHA loans is correct? -It cannot be financed into the loan -It must be paid only by the buyer at closing -A portion of the MIP could be prorated if the loan is refinanced within three years into another FHA loan -There is never an annual premium if it is all paid up-front

A portion of the MIP could be prorated if the loan is refinanced within three years into another FHA loan

For the Bureau to determine that a state is providing effective supervision and enforcement, a supervisory authority must meet all BUT the following performance standards: -The supervisory authority must examine or investigate loan originator licensees in a systematic manner based on identified risk factors or on a periodic schedule. -A supervisory authority must be accredited under the CSBS-AARMR-NMLS Mortgage Accreditation Program. -The supervisory authority must approve or deny loan originator license applications and must renew or refuse to renew existing loan originator licenses for violations of state or Federal law. -The supervisory authority must discipline loan originator licensees with appropriate enforcement actions, such as license suspensions or revocations, cease-and-desist orders, civil money penalties, and consumer refunds for violations of state or Federal l

A supervisory authority must be accredited under the CSBS-AARMR-NMLS Mortgage Accreditation Program.

Which of the following is NOT true of a unique identifier? -A unique identifier is a number -A unique identifier is assigned by protocols established by the NMLSR. -A unique identifier allows for the electronic tracking of loan originators for the sole use of Federal banking agencies. -A unique identifier can be used to access employment history of and the publicly adjudicated disciplinary and enforcement actions against loan originators.

A unique identifier allows for the electronic tracking of loan originators for the sole use of Federal banking agencies.

Which of the following statements about a VA loan is true? -A veteran can have two or more VA loans in place simultaneously. -A veteran must pay off a previous VA loan before he/she can obtain a second VA loan. -Once a veteran uses his/her loan benefit, the benefit goes away. -Veterans can use their benefit to get a loan to purchase a personal residence a maximum of two times.

A veteran can have two or more VA loans in place simultaneously.

Lola is working on a loan for her sister, Joan. She knows Joan is currently receiving child support, and Joan has authorized Lola to use that income to qualify her. Lola also knows that her nephew is 17 years old, and once he turns 18, Joan's child support payment will drop dramatically. Lola decides to indicate on the 1003 that Joan's oldest child 14 instead of 17 to help Joan qualify for the loan. This would be considered: -Negligence -Actual Fraud -Misrepresentation -A good deed

Actual Fraud

Which of the following is true about an adjustable rate mortgage? -Adjustable rate mortgages payments never change -Adjustable rate mortgages interest rates are fixed -Adjustable rate mortgages interest rates are not fixed -Adjustable rate mortgage always includes interest-only periods

Adjustable rate mortgages interest rates are not fixed

If a creditor denies a loan, what document must be sent to the client to inform him of the denial? -Adverse Action Notice -GFE -TIL Statement -Nothing is required to be sent if the information is verbally relayed to the client

Adverse Action Notice

When are the funds disbursed for an owner-occupied residential refinance? -After the loan documents are recorded -At the time of the loan closing -Within seven days after the application -After the three business-day right of rescission period has expired

After the three business-day right of rescission period has expired

Under the 1968 Fair Housing Act, which of the following is NOT one of the protected classes: -Race -Color -Age -Sex

Age

Which of the following would be considered a mortgage loan originator? -Alexia is discussing a rate lock with a borrower -Henry is determining whether a borrower can repay the proposed loan -Jane is requesting a verification of employment from a borrowers employer -Jackson is discussing with a borrower the need for additional documentation for their loan

Alexia is discussing a rate lock with a borrower

What is the objective of FCRA? -To assure fairness, relevancy, confidentiality, and accuracy -To assure all borrowers have access to credit -To delete obsolete information -All of the above

All of the above

Which of the following are functions of FACTA? (Select all that apply) -To improve consumer access to credit information -To improve resolution of consumer disputes with credit agencies -To prevent identity theft and restore credit history to victims of identity theft -All of the above

All of the above

Which of the following is NOT a scoring system lenders use to evaluate credit? -Equifax BEACON -Trans Union EMPIRICA -Altera SCORE -Experian FICO

Altera SCORE

According to Regulation B, which of the following is not recommended? -Including income from alimony or child support if it is to be computed into the income -Asking about the number of children in the family -Always referring to the man as borrower and the woman as co-borrower -Asking if the applicant is married

Always referring to the man as borrower and the woman as co-borrower

AARMR is the national association of executives and employees of the various states who are charged with the responsibility for administration and regulation of residential mortgage lending, servicing, and brokering, and dedicated to the goals described at www.aarmr.org. What does AARMR stand for? -American Association of Residential Mortgage Regulators -American Association of Real Estate Mortgage Regulators -American Academy of Residential Mortgage Regulators -American Association of Registered Mortgage Regulators

American Association of Residential Mortgage Regulators

ALTA is the acronym for: -American Land Truth Act. -Afro-American Loan Truth Act. -All-Inclusive Loan and Title Association. -American Land Title Association.

American Land Title Association.

What are the payment options on an Option ARM? -Amortized over 30 years; amortized over 15 years; interest only; or negative amortization -Amortized over 30 years; amortized over 20 years; amortized over 15 years; or interest only -Amortized over 30 years; amortized over 15 years; interest only; or balloon payment -Amortized over 30 years; amortized over 20 years; amortized over 15 years; or amortized over 10 years

Amortized over 30 years; amortized over 15 years; interest only; or negative amortization

Fannie Mae would require mortgage insurance on which of the following loans? -An 83% LTV conventional loan -A 96.5% FHA loan -An 80% LTV first mortgage and 20% LTV second mortgage equaling a 100% LTV loan -A 100% VA loan

An 83% LTV conventional loan

Who of the following is in violation of the Section 8 provisions of RESPA? -An attorney who also earns fees for performing multiple settlement services -An employer who pays her employees for referrals -A real estate broker who pays a cooperating real estate broker for a referral -An MLO who leases office space in a real estate office at an above market amount

An MLO who leases office space in a real estate office at an above market amount

A Mortgage Lender shall maintain capital of not less than $______ per licensed location: -$100,000 -$200,000 -$300,000 -An amount determined by the state Regulatory Authority that reflects the dollar amount of loans originated.

An amount determined by the state Regulatory Authority that reflects the dollar amount of loans originated.

Fill in the Blank. A Mortgage Lender shall maintain capital of not less than $______ per licensed location. -An amount determined by the state Regulatory Authority that reflects the dollar amount of loans originated. -100,000 -200,000 -300,000

An amount determined by the state Regulatory Authority that reflects the dollar amount of loans originated.

According to the Fair Credit Reporting Act, which of the following does not entitle a borrower to a free copy of his credit report? -An applicant was refused credit due to insufficient income -A consumer has placed an alert in the credit report while serving in the military -A consumer was a victim of identity theft and a fraud alert included in the credit report -The credit file contains inaccurate information as a result of fraud

An applicant was refused credit due to insufficient income

What does a loan originator use to determine the estimated value of a property based on analytical comparison of similar property sales? -An appraisal -A market survey -An area survey -A cost-benefit analysis

An appraisal

If a trust deed is recorded, which of the following is true? -It verifies both the lender and borrower signed the document. -Ownership is conveyed. -A lien is released. -An encumbrance is created.

An encumbrance is created.

Providing a referral fee to a realtor is? -An acceptable practice -An illegal practice -An acceptable practice as long as it is a fair price for services actually provided -Acceptable only if fully disclosed

An illegal practice

When a Preliminary Title Report shows a judgment, which of the following is true? -Borrowers will not get a loan. -Judgments have no bearing on mortgages. -An indemnification agreement may be required. -The judgment must always be paid off.

An indemnification agreement may be required.

Which one of the following is not required to be licensed? -Any Mortgage Lender making less than five mortgage loans within any 12 consecutive months -Any person who acts as a Mortgage Broker less than 5 times within any 2 consecutive months -Independent loan processor contractors who engage in loan origination activities -An individual negotiating a residential mortgage loan with or on behalf of an immediate family member

An individual negotiating a residential mortgage loan with or on behalf of an immediate family member

Which of the following is required to be licensed? -An individual who negotiates a loan that serves as the individual's residence -A staff loan processor or underwriter (Not Contracted) -Any person solely involved in timeshare plans. -An individual who negotiates a mortgage loan for another for compensation

An individual who negotiates a mortgage loan for another for compensation

A loan originator is: -A person who only performs real estate brokerage activities and is not compensated by a lender, a mortgage broker, or other loan originator. -A person or entity solely involved in extensions of credit relating to timeshare plans. -An individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain. -A person who only handles clerical or data entry functions.

An individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain.

An interest rate at PAR would be? -The interest rate before any fees -An interest rate with no YSP or SRP -The rate charged by banks to their best customers -The rate quoted in radio advertising to induce clients to call, but which will require discount points

An interest rate with no YSP or SRP

APR is the acronym for: -Average Percentage Rate. -All-Inclusive Percentage Rate. -Annual Percentage Rate. -Amortized Percentage Rate.

Annual Percentage Rate.

Which is the only authorized site for obtaining your free credit report? -FreeCreditReport.com -AnnualCreditReport.com -FreeScore.com -CreditReport.gov

AnnualCreditReport.com

How often must a state require an individual licensed with an organization that has tax exempt status, to renew their loan originator license? -Annually -An organization that has tax exempt status, does not need to renew their loan originator license -Every 3 years -Every 5 years

Annually

What is the definition of a business day for the Loan Estimate disclosure? -Monday through Friday -Monday through Saturday -Any day on which the creditor's offices are open to the public for carrying out substantially all of its business functions -Monday through Saturday except Sundays and all Federal holidays

Any day on which the creditor's offices are open to the public for carrying out substantially all of its business functions

By taking and passing the UST, you will meet the exam requirements of how many states? -All States -Any future states that adopt the UST -Just the original 21 states -The original 29 states

Any future states that adopt the UST

What does the term "Nontraditional mortgage product" mean? -Any mortgage product other than a 30-year fixed rate mortgage -Any mortgage product other than a 30-year fixed rate or variable rate mortgage -Any mortgage product other than a 15-year fixed rate mortgage -Any mortgage product other than a 30-year variable rate mortgage

Any mortgage product other than a 30-year fixed rate mortgage

The APR does not include which of the following? -Mortgage Insurance -Appraisal -Interest rate -Origination charges

Appraisal

Which of the following is NOT a finance charge in a residential mortgage loan? -Loan origination fee -Appraisal fee -Mortgage insurance premium -Mortgage broker fee

Appraisal fee

Which of the following is not a prepaid finance charge? -Origination fee -Discount point -Upfront Mortgage Insurance Premium -Appraisal fee

Appraisal fee

Which of the following participants in a mortgage loan transaction would be most likely to overvalue a property? -Appraiser -Attorney -Surveyor -Title Company

Appraiser

How often must a borrower receive an annual privacy notice? -As long as they are customers -Every 6 months -Only at closing -With initial disclosures, then annually for the first 5 years

As long as they are customers

Which of the following is true about asking a borrower questions about divorce? -Asking questions about divorce is permissible if there is any documentation in the loan file that suggests a divorce. -Questions about divorce are always allowed. -If you suspect a divorce based on visual evidence, questions may be asked. -Questions about divorce are never allowed.

Asking questions about divorce is permissible if there is any documentation in the loan file that suggests a divorce.

Which of the following questions is not prohibited while taking a loan application? -Asking about childbearing intentions -Asking the borrower to add a spouse to the application -Asking questions to discouraging a borrower from applying -Asking the borrower his/her marital status

Asking the borrower his/her marital status

You want to open a mortgage brokerage and have talked to several lenders. Before you started doing business with them, what would you need to have? -Wholesale broker agreements -An attorney on retainer -An in-house underwriter -A processor with experience

Wholesale broker agreements

What law requires that a cash transaction of more than $5,000 be reported? -BSA/AML -Dodd-Frank -FTC Red Flags -RESPA

BSA/AML

An MLO advertises a low interest rate for qualified applicants. A prospective borrower meeting the qualifications applies. The MLO moves the borrower into another loan which makes more profit to the lender. This is an example of: -Ponzi scheme -Bait and switch -Extortion -Loan flipping

Bait and switch

A 360/180 best describes what type of loan? -Subprime -FHA -Balloon -ARM

Balloon

What is an amortized loan that has a final payment due earlier than the term to fully pay off the loan called? -Balloon loan -Construction loan -Reverse mortgage -Adjustable Rate Mortgage

Balloon loan

Renee is a real estate broker working for a property developer. She has been going door-to- door discussing with homeowners in a certain area the possibility of them selling. She often tells these homeowners that there has been an increase of Latinos moving into the area and that they really should move now before their property values drop because of this influx of lower income individuals. This would be considered: -Redlining -Reverse Redlining -Blockbusting -Churning

Blockbusting

The practice of getting people to sell their homes at bargain prices by suggesting that certain ethnic groups are going to move into the area is nicknamed: -Price fixing -Redlining -Steering -Blockbusting

Blockbusting

Under the Truth in Lending Act, which of the following is NOT a requirement? -Borrower review of HUD-1 -Three day right of rescission -Use of APR in advertising -Disclosure of loan costs

Borrower review of HUD-1

What form do you give to the borrower(s) to sign that authorizes the MLO to order a credit report? -Borrowers Signature Authorization -Affiliated Business Agreement -The Privacy Act Disclosure -Loan Credit Act Form

Borrowers Signature Authorization

Which of the following is true concerning title insurance? -Borrowers must pay for a lender's policy. -Borrowers must pay for a lender's and an owner's policy. -Borrowers must pay for an owner's policy. -Borrowers do not pay for title insurance, sellers always pay for it.

Borrowers must pay for a lender's policy.

Which of the following is true when taking a loan application? -Borrowers must fill in the government monitoring (HMDA) section. -Borrowers must provide their birthdates, ages of children and marital status. -Borrowers must decide on their loan program at application. -Borrowers must sign initial loan disclosures within 3 business days.

Borrowers must provide their birthdates, ages of children and marital status.

Clerical or support duties of a loan processor or underwriter would NOT include: -Counseling consumers about residential mortgage loan rates or terms. -Offering or negotiating loan rates or terms. -Both A & B -Data entry on a file.

Both A & B

If a borrower and a co-borrower are refinancing a home that they both occupy, at the closing - who must receive a copy of the rescission disclosure? -Both borrowers -Either borrower or co-borrower -Neither borrower because it is a refinance -Neither borrower because it is owner occupied and was already financed

Both borrowers

Which of the following would NOT be considered an administrative or clerical task? -Receiving borrower information -Processing loan applications -Distributing information for processing or underwriting a loan -Bringing together parties interested in the mortgage of a property

Bringing together parties interested in the mortgage of a property

Which of the following is NOT true concerning SRP? -The Lender that services the loan does not receive the SRP. -Brokers do not get the SRP. -Brokers may receive an SRP. -Lenders get the SRP when the loan is sold.

Brokers may receive an SRP.

When the borrowers pay a fee to get a lower interest rate, but the interest rate will not remain at that level for the life of the loan, but over time will raise to the quoted fixed rate. What is this called? -Origination fee -Buy down fee -Discount points -Adjustable rate

Buy down fee

What part about short sale flipping has temporarily been suspended? -Immediately selling for a profit after disclosing the dollar amount of all repairs -The requirement of full disclosure to both seller and buyer regarding purchase price -Buying the property and re-selling within 90 days -The need for approval by an underwriter for financing

Buying the property and re-selling within 90 days

How is the market value of an appraisal determined? -By analyzing similar sold homes that are in the same geographical area -By analyzing homes that generate the same amount of income when rented -By analyzing similar homes that are for sale in the same geographical area -By analyzing homes that cost the same amount to build

By analyzing similar sold homes that are in the same geographical area

How does the cost approach determine value on a property? -By analyzing the income generated from the property -By calculating the dollar amount to rebuild the home -By averaging nearby property values -By analyzing similar homes in the same geographical area

By calculating the dollar amount to rebuild the home

HMDA is implemented as what Regulation? -B -C -X -Z

C

You and the borrower believe an Adjustable Rate Mortgage would be best for the borrower. What is the name of the booklet you are required to give? -CHARM Booklet -ARM Disclosure -Fair Lending Practices Booklet -RESPA Booklet

CHARM Booklet

Which disclosure do you need for an ARM loan? -Home Buyers Guide -CHARM booklet -Understanding ARMs -HECM disclosure

CHARM booklet

Which organization helps develop model legislation applicable to the administration and regulation of mortgage lending? -MERS -USPAP -CSBS/AARMR -NAR

CSBS/AARMR

What is the appraiser most interested In when determining the value of an income property? -Future projections of expenses and rents -Location -Interest rates -Cash flow

Cash flow

With a conventional loan, what source of down payment is NOT acceptable? -Bonus from an employer -A secured loan -Cash on hand which is not verifiable -The documented sale of an asset

Cash on hand which is not verifiable

Which of the following would not be considered a prohibited act? -Make any payment, threat or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment threat or promise, directly or indirectly -Collect, charge, attempt to collect or charge or use or propose any agreement purporting to collect or charge any fee prohibited by the S.A.F.E. Act -Cause or require a borrower to obtain property insurance coverage -Fail to truthfully account for monies belonging to a party to a residential mortgage loan transaction.

Cause or require a borrower to obtain property insurance coverage

CRV is the acronym for: -Community Redevelopment Value. -Certificate of Residential Value. -Certificate of Reasonable Value. -County Residential Valuation.

Certificate of Reasonable Value.

When performing the sales comparison approach, what does "adjusting properties" involve? -Changing the subject property to make it more like the comparables -Changing the comparables to make them more like the subject property -Always using comparables that are exactly like the subject property -Finding comparables that sold for the same price as the subject property

Changing the comparables to make them more like the subject property

The Regulatory Authority may do all of the following if an applicant fails to meet requirements for receiving a license except: -Deny a license or Decline to renew a license -Revoke a license -Charge higher fees for licensure -Suspend a license

Charge higher fees for licensure

Under RESPA, which of the following would be considered legal? -Charging a slight fee over the actual cost of the credit report. -Charging $50 over the actual cost of the appraisal. -A payment to a real estate agent bringing a client for a loan. -Charging for fees that are direct costs of the loan.

Charging for fees that are direct costs of the loan.

Which of the following sources of income would NOT be allowed on a conforming conventional loan? -Salary income when the borrower has worked for only 6 months -Social Security income -Income from a rental property that has been owned only 2 years -Child support received for a 16 year old child

Child support received for a 16 year old child

What type of fraud scheme usually includes a "get rich quick" real estate seminar? -Chunking -Churning -Redlining -Illegal Property Flipping

Chunking

Travis is a mortgage loan originator, and he primarily does refinances for borrowers. He has a borrower, Steve, who calls him once a year to refinance and every time Travis refinances his property even though Steve does not need to refinance. Travis does this to make sure that he receives the fees for the refinance. What would this be considered? -Steering -Churning -Chunking -Redlining

Churning

The penalties issued by the Regulatory Authority are ____ penalties on mortgage loan originators. -Civil -Criminal -Contractual -Continual

Civil

Which was the first major legislation to directly affect equal rights to ownership of real property? -Civil Rights Act -Emancipation Proclamation -Federal Fair Housing Act -Homeowners Protection Act

Civil Rights Act

A person operating without a license is subject to: -Imprisonment -Civil money penalties -Criminal court proceedings -NMLS disciplinary actions

Civil money penalties

A borrower wants to purchase a 2nd home and tells you that they intend to rent the property out when they are not living in it. You have reviewed their financial information and realize that the borrower would qualify for financing if the property is classified as a 2nd residence. However, if the property is classified as an investment property, the borrower is unlikely to qualify. What should you do? -Classify the property as a rental property even though the borrower intends to reside there part of the year. -Classify the property as a 2nd residence; since the borrower intends to use the property for part of the year, this is acceptable. -Classify the property as a 2nd residence because it is not legal for the borrower to personally reside in a property classified as a rental for any length of time. -Deny the borrower because it is neither legal to rent out a 2nd residence or reside in a rental property for any length of time.

Classify the property as a rental property even though the borrower intends to reside there part of the year.

Which of the following is responsible for the accurate disbursements of all funds due to and from all parties in a mortgage transaction? -MLO -Appraiser -Real estate agent -Closing Attorney, settlement or escrow agent

Closing Attorney, settlement or escrow agent

On which two documents would a Pre-Payment Penalty be disclosed? -Closing Disclosure and Truth In Lending Disclosure -Note and Truth In Lending Disclosure -Deed of Trust and Intent to Proceed -Closing Disclosure and Loan Estimate

Closing Disclosure and Loan Estimate

Up to 30 days after consummation, creditors are permitted to issue revised ____ only in certain situations such as when changed circumstances result in increased charges. -Closing Disclosures -Loan Estimates -GFEs -TILs

Closing Disclosures

If a borrower is a commissioned employee and required to provide tax returns, how does the lender calculate income from the tax returns? -Commissioned income less all of Schedule A -Commissioned income only -Commissioned income less schedule 2106 expenses -Adjusted Gross Income

Commissioned income less schedule 2106 expenses

CRA is the acronym for: -Congressional Reclamation Act. -Community Reinvestment Act. -Community Redevelopment Act. -Cost of Reinvestment Act.

Community Reinvestment Act.

What is the name of the national organization composed of state bank supervisors dedicated to maintaining the state banking system and state regulation of financial services? -Committee of State Bank Supervisors (CSBS) -Committee of National Bank Supervisors (CNBS) -Conference of State Regulating Supervisors (CSRS) -Conference of State Bank Supervisors (CSBS)

Conference of State Bank Supervisors (CSBS)

The Truth in Lending Act is also known as: -Consumer Credit Protection Act -Fair Credit Reporting Act -Home Mortgage Disclosure Act -Trust Fund Accounting Act

Consumer Credit Protection Act

CFPB is the acronym for: -Congressional Fair Public Business Act. -Consumer Financial Protection Bureau. -Consumers Federal Policy Bureau. -Congressional Federal Protection Board.

Consumer Financial Protection Bureau.

If a lender is processing an FHA loan and finds out that the borrower has a questionable social security number, what should be done? -Continue to process and close the loan, FHA will insure it as long as the required documentation is in the file. -Keep processing and proceed as if nothing has happened, the SS# will be checked later in underwriting. -Immediately turn the loan down it is probably fraud -Contact the Social Security Administration and resolve the question

Contact the Social Security Administration and resolve the question

The loan officer suspects the social security number in an FHA application is incorrect, what must he/she do? -Contact the Social Security administration to verify it. -Proceed with the loan, because FHA will verify the social security number. -Proceed with the loan and HUD will verify it. -Give the borrower five days to bring in the verification.

Contact the Social Security administration to verify it.

PMI, or Private Mortgage Insurance, would be used for which of the following loans? -FHA loans -VA loans -Conventional loans -All Government loans

Conventional loans

What type of appraisal takes the cost of rebuilding the property, plus the cost of the land the property is on and subtracts any depreciation to determine a value of the property? -Income Approach -Sales Comparison Approach -Cost Approach -Investment Approach

Cost Approach

Land is given as a separate value in which of the following appraisal methods? -Cost approach -Income method -Market or sales approach -Land is never given a separate value

Cost approach

Examples of Red Flags include all of the following except: -Fraud alert on credit reports -Documentation which appears altered or forged -Address discrepancies -Credit scores

Credit scores

Seven years is usually the length of time information is kept on a credit report. Which of the following would be different? -Slow payments -Collection accounts -Criminal convictions -Mortgage ratings

Criminal convictions

Which of the following information will an MLO not gather on a loan application? -Employer, age of borrowers and monthly income -Current and Future income -Social Security number and ages of children -Schedule of property currently owned

Current and Future income

In the Real Estate Owned section of the 1003, you need to include all of the following: -Current residence, rentals, lots, and any other real estate owned -Current residence only -Current residence and other personal property owned -Current residence, farm lands and building lots

Current residence, rentals, lots, and any other real estate owned

What form is used in order to verify an honorable discharge? -26-1880 -DD 214 -1003 -NGB Form 22

DD 214

Which of the following does a standard Freddie/Fannie credit report contain? -A statement regarding future credit worthiness of a borrower -Credit inquiries from insurance companies -Payment amounts only for reported debts -Debts a person may owe

Debts a person may owe

When you order an Insurance binder on a borrower's loan file, the one-page sheet that summarizes all the insurance information is known as the: -binder summary page. -Declaration page. -1008 -binder reference page.

Declaration page.

The document that conveys ownership of real property from one person to another is known as the: -Mortgage -Deed -Title -Promissory Note

Deed

A lien is released by which of the following documents? -Deed of Trust -Deed of Re-conveyance -Quit Claim Deed -Warrantee Deed

Deed of Re-conveyance

If the borrower is self-employed, generally speaking, what can be added to the income? -Notes due and payable in less than one year -Adjusted Gross Income -Depreciation -Nothing, only W-2 income

Depreciation

What is the name of Fannie Mae's automated underwriting system? -Encompass -POINT by Calyx -Loan Prospector -Desktop Underwriter

Desktop Underwriter

What is the name of the automatic underwriting system used by Fannie Mae? -Loan Prospector -Desktop Underwriter -Direct Endorser -Loan Underwriter

Desktop Underwriter

Which of the following is not considered a protected class under Reg. B? -Age -Disability -Sex -National Origin

Disability

Whenever the loan is an ARM, Federal regulations require which of the following? -A maximum loan limit of $417,000 -An increase of no more than 1/2 percent per year -The lender to charge set amounts for the origination fee -Disclosure of the index used

Disclosure of the index used

Which of the following would NOT appear on the Truth-in-Lending Disclosure? -Finance charge -Amount financed -Total of Payments -Discount points

Discount points

A lender has a policy that they never lend less than $70,000 because they can't make any money off of loans lower than $70,000. What would this be considered: -Disparate Treatment -Disparate Impact -Discrimination -Blockbusting

Disparate Impact

A lender has a policy that only individuals between the age of 25-45 can receive home loans of over $200,000. What would this be considered: -Disparate Treatment -Disparate Impact -Discrimination -Blockbusting

Disparate Treatment

According to the FACT Act which of these could be considered a failure to secure private information? -Burning old files in a steel drum behind the office once a month -Hiring a document destruction company to remove all old files -Shredding documents and throwing them in the trash -Disposing of documents into the trash bins for the janitorial service to empty nightly

Disposing of documents into the trash bins for the janitorial service to empty nightly

The way to compute loan to value would be? -Divide the loan amount by the value of the property. -Multiply the property value by the loan amount. -Divide the property value by the loan amount. -Multiply the loan amount by the property value.

Divide the loan amount by the value of the property.

What federal law created the idea of a qualified mortgage? -Dodd-Frank -TILA -RESPA -ECOA

Dodd-Frank

Under which of the following circumstances would a repurchase, or buyback, NOT happen? -The borrowers never made any payments. -The borrowers are in default within the first few months. -During the term of the loan the borrowers were late on a few payments. -The secondary lender discovered fraud in the application.

During the term of the loan the borrowers were late on a few payments.

Regulation B is affiliated with which act? -TILA -ECOA -HMDA -HOEPA

ECOA

Regulation B is also known as -ECOA -HMDA -RESPA -TILA

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? -HMDA -RESPA -TILA -ECOA

ECOA

Which federal law prohibits someone from inquiring about childbearing? -HMDA -ECOA -Fair Housing Act -RESPA

ECOA

Which is not part of the original loan application? -Borrower's marital status -ECOA disclosure -Borrower provided ethnicity -Borrower provided birth date

ECOA disclosure

Which of the following does NOT directly influence interest rates? -Early payoffs -Foreclosure -Fraud -Federal Reserve Bank

Early payoffs

Which of the following must an individual do before he or she is allowed to engage in the business of a loan originator? -Obtain and maintain annually a registration as a loan originator -Obtain and maintain annually a license as a state licensed loan originator -Both A & B -Either A or B

Either A or B

Which of the following is acceptable discrimination under ECOA? -Race -Sex -Religion -Employment

Employment

Which of the following would NOT be a good source to establish credit history when a borrower does not have a traditional credit score? -Employment history -Rent history -Utility ratings -Insurance payment history

Employment history

What prevents a party from having clear title? -Impounds -Escrow -Entitlement -Encumbrance

Encumbrance

What is the amount of money that VA guarantees called? -Escrow -Endorsement -Encroachment -Entitlement

Entitlement

Which is not an application disclosure? -Servicing disclosure -Environmental hazard disclosure -Appraisal disclosure -APR disclosure

Environmental hazard disclosure

Borrower(s) may decide to disclose income from child support or alimony. If disclosed, which federal law requires that it be considered in the loan approval process? -Real Estate Settlement Procedures Act -Equal Credit Opportunity Act -Fair and Accurate Credit Transactions Act -Truth in Lending Act

Equal Credit Opportunity Act

What does the acronym ECOA stand for? -Economic Concern in Outlying Areas -Equal Credit Opportunity Act -Equality of Credit Obligations Act -Equal Credit Originations Act

Equal Credit Opportunity Act

What is ECOA? -Equal Credit Option Administration -Environmental Commission Oversight Act -Equal Consumer Opportunity Act -Equal Credit Opportunity Act

Equal Credit Opportunity Act

ECOA is the acronym for: -Equal Credit Opportunity Act. -Equal Community Opportunity Act. -Equity Conservation and Organization Act. -Equal Contribution and Options Act.

Equal Credit Opportunity Act.

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

Escrow Holdback.

What do we call it when the loan will not be fully funded until further conditions are met? -Escrowed funding -Conditional funding -Loan reserve funding -Loan held in trust

Escrowed funding

What is the general accuracy requirement for any amounts listed on the LE? -Must be within 10 percent of actual cost. -No more than $100 per category. -There is no general requirement. -Estimates must be made in Good Faith.

Estimates must be made in Good Faith.

What does an appraisal do? -Secures the value -Guarantees the value -Estimates the value -Determines the value

Estimates the value

An applicant for licensure must pass a written test which shall include questions on Federal and State law and regulation. Which of the following would NOT necessarily be included in this subsection? -Instruction on fraud -Consumer protection -Fair lending issues -Ethics

Ethics

The SAFE Act mandates that specific topics be covered every year. Which of the following is a required topic? -Appraisal -Ethics Fair lending and Consumer protection -FHA loans -Secondary markets

Ethics Fair lending and Consumer protection

How often must a lender perform an escrow account analysis to ensure that excess funds are not being kept? -Once a month -Twice a year -Every year on the loan -Once every two years

Every year on the loan

The Regulatory Authority may appoint an examiner to work on behalf of the Regulator in making examinations of loan originator operations. What responsibilities do these examiners typically have? -Examiners may administer oaths and affirmations, make examinations and examination reports. -Examiners have the responsibility of paying assessments to the Secretary in conjunction with carrying out examinations. -Examiners have legal authority to summon loan originators to be present for court appointments. -Examiners have the authority to instigate a cease and desist proceeding if the Secretary is found improperly usurping his or her authority.

Examiners may administer oaths and affirmations, make examinations and examination reports.

An MLO leaves a borrower's file open on his/her desk for just a moment. An Identity thief sees the borrower's credit report which contains a huge amount of information. Fortunately the MLO quickly returns. What potential Federal laws is the MLO violating? -ECOA and RESPA -FACT Act and GLBA -HMDA and TILA -RESPA and MDIA

FACT Act and GLBA

The Red Flags Rule is part of what law? -FACTA -FCRA -Gramm-Leach-Bliley Act -The MAP Rule

FACTA

Which federal law was put into place to improve consumer's access to credit information? -FCRA -FACTA -Gramm-Leach-Bliley -Red Flags Rule

FACTA

True or False? A mortgage loan originator may operate independent of employment by a licensed mortgage lender, mortgage broker, or mortgage servicer. The mortgage loan originator just needs to have a license. -TRUE -FALSE

FALSE

True or False? A reasonable fee may be charged to consumers in order to cover the costs of maintaining and providing access to information from the Nationwide Multistate Licensing System and Registry. -TRUE -FALSE

FALSE

True or False? A registered loan originator does not need to maintain a unique identifier through the NMLSR so long as he or she works for a subsidiary that is regulated by a federal banking agency. -TRUE -FALSE

FALSE

True or False? A state-licensed loan originator may take the same approved course in the same or successive years to meet the annual requirements for continuing education. -TRUE -FALSE

FALSE

True or False? An applicant who has had a loan originator license revoked previously is eligible for a license as long as they wait seven years before they apply for a new license. -TRUE -FALSE

FALSE

True or False? An independent contractor may engage in residential mortgage loan origination activities as a loan processor or underwriter without a state issued loan originator license. -TRUE -FALSE

FALSE

True or False? It is the NMLSR, not the Regulator, who possesses the sole authority to require a person to cease and desist loan originating practices when there is reasonable cause to suspect the commission of a past or future violation. -TRUE -FALSE

FALSE

True or False? Once information is entered into the NMLSR, any mortgage loan originator wishing to challenge that information must wait until the time of license renewal and pay a fee. -TRUE -FALSE

FALSE

True or False? Only some states require fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check. -TRUE -FALSE

FALSE

True or False? The SAFE Act does not mention subprime mortgage lending. -TRUE -FALSE

FALSE

True or False? The term "mortgage loan originator" includes a person or entity that only performs real estate brokerage activities and is licensed or registered in accordance with State law. -TRUE -FALSE

FALSE

True or False? When considering acts that would make an individual ineligible for a loan originator license, expunged convictions still have an affect on the eligibility of the individual. -TRUE -FALSE

FALSE

Which federal law restricts the use of credit reports and requires accuracy on credit report? -FCRA -FACTA -Gramm-Leach-Bliley -Red Flags Rule

FCRA

What kind of loan has Upfront Mortgage Insurance? -FHA -Jumbo -Conventional -VA

FHA

What loan requires an upfront mortgage insurance fee? -Conventional -FHA -VA -Subprime

FHA

What type of mortgage requires upfront mortgage insurance and monthly mortgage insurance? -VA -USDA -Conventional -FHA

FHA

What is the main difference between FHA and Conventional loan programs? -FHA is for first time home buyers -FHA insures the lender against losses -FHA doesn't require a down payment -There is no difference

FHA insures the lender against losses

MIP or Mortgage Insurance Premium would be used for which of the following loans? -Conventional loans -VA loans -Secondary financing -FHA loans

FHA loans

Mortgage Insurance Premium (MIP) would be used for which of the following loans? -VA loans -Secondary financing -FHA loans -Conventional loans

FHA loans

FHA loan limits change from time to time, and are based on the: -average selling price of homes in a county. -FNMA maximums minus 20%. -average income level of the county. -FHA median house prices.

FHA median house prices.

A Section 203K loan is a: -FHA program -A reverse mortgage -A VA program -A Fannie Mae program

FHA program

The most commonly used conventional underwriter guidelines are established by: -Federal Reserve. -VA/FHA. -GNMA and FNMA. -FNMA and FHLMC.

FNMA and FHLMC.

Relevant financial information about an applicant who applies for an FHA or conventional residential mortgage is entered on: -FNMA form 1008. -FNMA form 1003. -FNMA form 1003. -FHLMC form 95.

FNMA form 1003

What does FCRA stand for? -Factual Credit Reporting Act -Fair Credit Reporting Act -Fair Credit Release Act -Fair Credit Reporting Action

Fair Credit Reporting Act

FCRA is the acronym for: -Federal Credit Reporting Act. -Federal Certificate of Reimbursement Act. -Fair Credit Reporting Act. -Federal Community Redevelopment Act.

Fair Credit Reporting Act.

FHA is the acronym for: -Fair Habitation Act -Federal Housing Act -Fair Home Act -Fair Housing Act

Fair Housing Act

Which law prohibits discrimination based upon disability? -ECOA -Reg. C -Fair Housing Act -RESPA

Fair Housing Act

The Federal National Mortgage Association is also known as which of the following? -Fannie Mae -Freddie Mac -Ginnie Mae -Sallie Mae

Fannie Mae

Which of the following is a government sponsored entity? -Fannie Mae -Ginnie Mae -FHA -The USDA

Fannie Mae

FmHA is the acronym for: -Farming Housing Act. -Farmers Home Administration. -Federal Mortgages for Homes Act. -Family Home Administration.

Farmers Home Administration.

Which of the following would NOT be considered a Federal Banking Agency? -Comptroller of the Currency -Board of Governors of the Federal Reserve System -Federal Bureau of Investigation -National Credit Union Administration

Federal Bureau of Investigation

FDIC is the acronym for: -Federal Deposit Insurance Corporation. -Fair Distribution of Insurance Commissions. -Federal Development of Institutional Corporations. -First Deposit and Insurance Corporation.

Federal Deposit Insurance Corporation.

FHLMC is the acronym for: -Freedom from House and Loan Mismanagement Act. -Federal Housing and Loan Mortgage Commission. -Fair Home and Lending Management Commission. -Federal Home Loan Mortgage Corporation.

Federal Home Loan Mortgage Corporation. Correct Choice

What does FHA stand for? -Federal Housing Administration -Federal Housing Act -Federal Housing Agency -Federal Housing Academy

Federal Housing Administration

FNMA is the acronym for: -Federal Non-institutional Mortgage Administration -Federal National Mortgages Act -Federal National Mortgage Association -Federal National Monetary Association

Federal National Mortgage Association

In the testing of loan originators, you must take a qualified test that measures knowledge and comprehension in which areas? -Ethics and Federal Laws -Federal law, mortgage origination, and ethics -Federal and State law and regulation pertaining to mortgage origination -Federal and State law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues, general mortgage industry knowledge and origination

Federal and State law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues, general mortgage industry knowledge and origination

Are State-specific disclosures replaced by the new Loan Estimate and Closing Disclosure? -These are new Federal Disclosures and do replace all state disclosures -Federal disclosures never replace state specific disclosures -Federal disclosures cannot be superseded by state disclosures -State disclosures are now consolidated by the new LE and CD disclosures

Federal disclosures never replace state specific disclosures

FIRREA is the acronym for: -Financial Institutions Reform, Recovery and Enforcement Act. -Fair Institutional Rules, Regulations and Equalization Act. -Federal Institution Recover, Reform, and Executive Act. -Falsification of Restoration, Recover and Extrication Act.

Financial Institutions Reform, Recovery and Enforcement Act.

What information must an applicant furnish to the NMLSR in order to verify their identity? -Just Fingerprints -Only a personal history and experience -Simply an authorization for the System to obtain a credit report -Fingerprints, a personal history and experience and an authorization for the System to obtain a credit report

Fingerprints, a personal history and experience and an authorization for the System to obtain a credit report

If required, the borrower must retain flood insurance for how long? -Until the loan is paid down to 50% LTV -Until the loan is paid down below 80% LTV -For 10 years -For the life of the loan

For the life of the loan

When a property is located in a flood plain, the lender will require flood insurance to be in effect for how long? -For 10 years, then requires the borrower to obtain a flood protection letter -Until the LTV reaches below 80% -Until the LTV reaches 50% -For the life of the loan

For the life of the loan

When hazard insurance on the property lapses, what will the lender do? -Force placed insurance -Errors and omissions insurance -Special mortgage insurance -An umbrella policy

Force placed insurance

If the borrower's homeowner's insurance lapses, the lender will obtain which of the following? -Federal insurance -Forced place insurance -Credit insurance -Special mortgage insurance

Forced place insurance

Kay is behind on her mortgage payments and is concerned that she will soon be going into the foreclosure process. Kay receives a phone call from a company stating that they can help her avoid foreclosure if she pays them $3,000 upfront to discuss options with her servicer. What type of scheme is likely occurring in this situation? -Loan Flipping -Foreclosure Rescue Scheme -Illegal Property Flipping -Equity Skimming

Foreclosure Rescue Scheme

What is an unacceptable source of gift funds on an FHA loan? -From seller to borrower -From uncle to niece -From grandparent to grandchild -From an employer

From seller to borrower

What event occurs when the 3-day right of rescission has passed? -Closing -Funding -Post-Closing -Underwriting

Funding

The following two disclosures are required by RESPA, if applicable: -1003 and AfBA -GFE and AfBA -1003 and 1008 -Borrower's Signature Authorization and GFE

GFE and AfBA

Why was Regulation Z enacted? -Require lenders to protect borrowers non-public information -Enable banks to sell mortgages more easily -Give borrowers disclosures regarding costs and fees and the ability to cancel certain transactions -Prevent discrimination based on race ethnicity or gender

Give borrowers disclosures regarding costs and fees and the ability to cancel certain transactions

The Homeowners Protection Act of 1998 does which of the following? -Gives buyers the right to cancel a contract based on property condition -Requires a buyer to sign a disclosure regarding home inspections -Gives borrowers the right to cancel PMI when certain conditions are met -Provides consumers a means of protection through PMI

Gives borrowers the right to cancel PMI when certain conditions are met

According to RESPA, where must the YSP be disclosed? -Truth in Lending Disclosure -Notice of Right to Cancel -Good Faith Estimate -APR Calculation

Good Faith Estimate

A yield spread premium is disclosed on which document? -TIL disclosure -Good faith estimate -Servicing disclosure -Rescission disclosure

Good faith estimate

GNMA is the acronym for: -Government Non-institutional Mortgage Act -Government National Money Act -Government National Mortgage Association -Government National Monetary Association

Government National Mortgage Association

What are Fannie Mae and Freddie Mac also known as? -Congress owned enterprises -Government supervised but privately owned entities -Government sponsored enterprises -Privately owned entities

Government sponsored enterprises

Under what federal legislation, is a lender required to allow a borrower to opt-out of having their nonpublic personal information disclosed to a third party? -Gramm-Leach-Bliley -The USA Patriot Act -FACTA -FCRA

Gramm-Leach-Bliley

What federal legislation prohibits the exchange of information between consumer creditors under certain criteria? -Equal Credit Opportunity Act -Fair Credit Reporting Act -Gramm-Leach-Bliley Act -Truth in Lending Act

Gramm-Leach-Bliley Act

Lenders submit Loan/Application Registers in order to comply with what law? -CRA -FACT Act -FCRA -HMDA

HMDA

Section X on the 1003 is where information regarding what federal law goes? -HMDA -ECOA -QM -ATR

HMDA

What law requires the collection of race, ethnicity and sex for the purpose of preventing and detecting discriminatory practices? -HMDA -ECOA -Fair Housing Act -RESPA

HMDA

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

HMDA

The federal act that requires lenders to disclose mortgage loan information, by geographic area is: -HMDA. -FCRA. -ECOA. -RESPA.

HMDA.

The Uniform Settlement Statement is commonly referred to as the: -HUD-1 Form. -Good Faith Estimate. -Truth in Lending Statement. -Escrow Disclosure.

HUD-1 Form.

RESPA requires that all mortgage loan compensation be disclosed in which of the following documents? -HUD Settlement Cost Booklet -HUD-1 Statement -CHARM booklet -Truth in Lending Disclosure Statement

HUD-1 Statement

-Which of the following documents itemizes all settlement costs including lender charges? -Agreement of sale -HUD-1/Settlement statement -Form 1003 -Forbearance agreement

HUD-1/Settlement statement

-The Real Estate Settlement Procedures Act falls under the control of which agency? -HUD/CFPB -Federal Reserve -SEC -State Regulators

HUD/CFPB

FHA (Federal Housing Administration) loans fall under the control and guidelines of: -HUD/CFPB. -FNMA/FHLMC. -RESPA/TILA. -PAR/BPS.

HUD/CFPB.

According to the Truth-in-Lending Act (TILA), which of the following fees is EXCLUDED from the calculation of the annual percentage rate? -Hazard insurance -Wire Transfer -Prepaid interest -Mortgage insurance premiums

Hazard insurance

What is not included in the APR calculations? -Mortgage insurance premium -Origination fee -Processing fee -Hazard/Fire insurance premium

Hazard/Fire insurance premium

On Form 1003 Section X: Information for Government Monitoring Purposes is used in order to comply with which federal law? -Community Reinvestment Act -Fair Credit Reporting Act -Home Mortgage Disclosure Act -Truth in Lending Act

Home Mortgage Disclosure Act

What does HMDA stand for? -Home Mortgage Disclosure Act -Home Mortgage Disabilities Act -Housing Mortgage Disclosure Act -Home Mortgage Development Association

Home Mortgage Disclosure Act

What does the acronym HMDA stand for? -Home Mortgage Disclosure Act -Home Mortgage Discovery Act -Home Mandated Disclosure Act -Household Mortgage Disclosure Act

Home Mortgage Disclosure Act

-HMDA is the acronym for: -House and Mortgage Deposit Act. -Home Mortgage Discovery Act. -Home Mortgage and Development Act. -Home Mortgage Disclosure Act.

Home Mortgage Disclosure Act.

Which federal law allows borrowers to request PMI cancellation when their LTV reaches 80%? -Homeowners Protection Act -Reg. Z -RESPA -Home Ownership and Equity Protection Act

Homeowners Protection Act

How can one calculate monthly income for an applicant who is paid an hourly wage? -Weekly income x 52/12 -Weekly income x 12/52 -Hourly wage x 40 x 52/12 -Weekly income x 4

Hourly wage x 40 x 52/12

The SAFE Act is part of the: -Community Reinvestment Act. -Dodd-Frank Act. -Housing and Economic Recovery Act. -Real Estate Settlement and Procedures Act.

Housing and Economic Recovery Act.

What determines lien priority? -If it's the lowest interest rate -If it's recorded first, second etc. -If it has the largest loan balance -If it was subordinated to the first

If it's recorded first, second etc.

Under what circumstances would it be possible to consider capital gains as income for a Fannie Mae or Freddie Mac loan? -If the borrowers can get written verification from their mortgage loan servicer that the income will continue -If the borrowers can verify a minimum of two years income on their tax returns and still own the asset -If the borrowers can verify one year income on their tax returns and get a CPA letter -If the borrowers are using the asset/income as part of their down payment

If the borrowers can verify a minimum of two years income on their tax returns and still own the asset

Generally speaking, which loan does not require mortgage insurance? -If the combined loan to value is 90%, and the LTV is less than 80% -If the loan is greater than 80% LTV -If the combined loan to value is 95%, and the LTV is less than 81% -If the loan is less than 90% CLTV, and the LTV is 85%

If the combined loan to value is 90%, and the LTV is less than 80%

In which situation would it be most likely that a lender will reject a property? -If the effective age is unduly old -If the condition is marked "fair" by the appraiser -If the market value exceeds the costs to rebuild -If the net adjustments on the comparable were 5%

If the condition is marked "fair" by the appraiser

A borrower with an FHA loan sells the property on contract and transfers the title. Under which circumstance is this acceptable? -If the loan is assumable -If the new borrower occupies the property -If the original borrower indemnifies the lender against any losses -Under no circumstances

If the loan is assumable

Which of the following is not a penalty that the state regulatory authority can levy against a licensee? -Restitution -Imprisonment -License Suspension -License Revocation

Imprisonment

Hank just received an appraisal fee from his borrower. What type of account should Hank put this appraisal fee until it is paid to the appraiser? -In an investment account -In an interest bearing savings account -In an escrow account -In the lenders general operating account

In an escrow account

Identify which attribute is NOT considered illegal discrimination in granting credit under the Equal Credit Opportunity Act. -Color -Income -Race -Sex

Income

Which of the following is not included in a credit score? -Items from public records -Income information -A good rating of how someone has paid -A bad rating of how someone has paid

Income information

Which of the following is true concerning income with an FHA loan? -Borrowers may state income on any FHA loan -Income is not verified on FHA loans -Income must always be verified -Borrowers may only state income on an FHA ARM loan

Income must always be verified

Which of the following terms means, "an individual who performs his or her duties other than at the direction of and subject to the supervision and instruction of an individual who is licensed and registered as a loan originator"? -Loan Processor -Independent Contractor -Mortgage Loan Originator -Mortgage Loan Officer

Independent Contractor

An adjustable rate mortgage has two components to it, the index and the margin. After closing which of these can change? -Index only -Margin only -Both index and margin -Neither because the loan is "closed"

Index only

How does an ARM adjust? -Index only -Index plus the margin -Interest rate caps only -Federal Reserve Bond

Index plus the margin

Which of the following is true of an ARM? -Index rate + margin = ARM rate -Initial rate + margin = ARM rate -ARM rate + margin = index rate -Margin + cap = ARM rate

Index rate + margin = ARM rate

Which of the following is not a type of appraisal? -Income Approach -Sales Comparison Approach -Investment Approach -Cost Approach

Investment Approach

Which of the following best describes a lien? -Stops all fees from incurring on the property -Is a claim on the property -Forfeits the property -Allows the lender to sell the property

Is a claim on the property

Which of the following are NOT powers/duties of the Regulatory Authority? -Conduct Investigations -Issue Warrants -Conduct examinations of licensee's books and records -Issue Fees and Penalties

Issue Warrants

All of the following are examples of prohibited conduct, except: -Issuing a Satisfaction of Mortgage -Failing to account for or disburse funds properly -Paying compensation to an unlicensed individual -Charging high rates or fees exceeding Predatory laws

Issuing a Satisfaction of Mortgage

Which of the following is NOT true about the VOE? -It must be provided for all employed applicants, and must be fully completed, signed, and dated . -It must be sent directly by the processor to the employer. -It must be signed by the personnel department or the borrower's superior. -It can be sent electronically to the borrower to be presented to the lender.

It can be sent electronically to the borrower to be presented to the lender.

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

It created the NMLS

Which of the following is the most correct concerning a trust deed? -It must be signed by the borrower and the lender in order to make it legally enforceable. -It encumbers the borrower's title to the real estate. -It conveys title to the property. -It allows the lender to occupy the premises.

It encumbers the borrower's title to the real estate.

All of the following are true about the FTC Red Flags Rule except: -Protect sensitive personal data -Require the implementations of a written plan to detect and prevent industry theft -It is enforced by the CFPB -The penalty for noncompliance is $3,500

It is enforced by the CFPB

How does rate charged for PMI for a 90% loan compare to that for a 95% loan? -It depends solely on the loan amount -It is lower -It is higher -It is the same

It is lower

When is it acceptable to discourage a borrower from making a formal loan application due to the fact that the borrower receives income from public assistance? -When the credit score is below normal loan parameters -It is never correct to discourage a borrower from applying for a mortgage loan -When the income is below the government disclosed poverty line -When the loan size makes it a non-conforming loan

It is never correct to discourage a borrower from applying for a mortgage loan

What makes a mortgage loan a second mortgage? -It has a higher interest rate. -It is the smallest loan. -It is recorded in second position. -It is a HELOC.

It is recorded in second position.

When do you give an ARM disclosure? -When the rate may change at any time in the life of the loan. -Any time the rate changes in the first five years. -When the borrower asks for one. -Any time the rate changes in less than three years.

It is recorded in second position.

Which of the following is true concerning hazard insurance on a Freddie/Fannie loan? -It is not required when the LTV is less than 50%of the house value. -It is required on all loan transactions. -It is not required on loan transactions equal to or less than 78% of the house value. -It is not required when the LTV is less than 80% of the house value.

It is required on all loan transactions.

How does aggregate adjustment benefit the borrower? -It protects against escrow overages -It protects against escrow shortages -It protects against escrow elimination -It protects against escrow theft

It protects against escrow overages

What benefit does private mortgage insurance provide to the borrower? -It pays off the mortgage if either the borrower or co-borrower pass away. -It allows a longer grace period for payments. -It protects against property loss or damage. -It reduces the amount of down payment required.

It reduces the amount of down payment required.

Which of the following is asking for the manner in which title will be held? -Periodic tenancy -Tenancy for years -Common Joint tenancy -Joint tenants with full rights of survivorship

Joint tenants with full rights of survivorship

Which of the following would be an appropriate entry on the 1003 if asked for the "manner" in which title will be held? -Joint tenants with full rights of survivorship -Tenancy for years -In a bank safety deposit box -Periodic tenancy

Joint tenants with full rights of survivorship

A couple wants to buy a house together and both will be using their credit and income to qualify for the loan. However they are not married. How are they applying? -Jointly but on two separate loan applications -Not Jointly -Individually -Married applying jointly

Jointly but on two separate loan applications

What do you call a loan that exceeds Fannie/Freddie loan limits? -Conventional -Government -Jumbo -Conforming

Jumbo

When FNMA or FHLMC loan limits are exceeded, the loan is considered to be ___________. -Subprime -Jumbo -Suspended -Conforming

Jumbo

Another way to refer to non-conforming loans would be: -investment. -FHA. -Jumbo. -VA.

Jumbo.

If a borrower is self-employed and trying to get a government or conventional loan, which percentage of ownership in a business means that the borrower will not be required to provide tax returns? -Greater than 25% -Greater than 50% -Less than 25% -Greater than 50% but less than 75%

Less than 25%

Provide the term for the following definition: "an individual who performs clerical or support duties at the direction of and subject to the supervision and instruction of a state-licensed loan originator or a registered loan originator." -Loan Processor -Real Estate Broker -Mortgage Loan Originator -Independent Contractor

Loan Processor

Which of the following terms means an individual who, with respect to the origination of a residential mortgage loan, performs clerical or support duties at the direction of and subject to the supervision and instruction of a state-licensed or registered loan originator"? -Loan Processor or Underwriter -Independent Contractor -Mortgage Loan Originator -Mortgage Loan Officer

Loan Processor or Underwriter

What is the name of Freddie Mac's automated underwriting software program? -Loan Processor -Loan Prospector -Loan Underwriter -Loan Originator

Loan Prospector

What is the name of Freddie Mac's automated underwriting system? -Loan Prospector -Desktop Underwriter -Desktop Originator -FHLMC Loan Underwriter

Loan Prospector

What is the name of the automatic underwriting system used by Freddie Mac? -Loan Prospector -Desktop Underwriter -Direct Endorser -Loan Underwriter

Loan Prospector

A discount point is calculated as being 1% of what? -Interest rate -Down payment -Loan amount -Sales price

Loan amount

Who is required to comply with the Do Not Call list? -National Banks -Airlines -Political organizations -Loan officers

Loan officers

Which of the following is not common to split between buyer and seller? -Homeowner's Association Fees -Property taxes -Rents -Loan origination fees

Loan origination fees

LTVR/LTV is the acronym for: -Lot to value ratio -Loan to value ratio -Less than value ratio -Land to value ratio

Loan to value ratio

Which of the following must have an MLO license? -June, who is working as an attorney and negotiating terms on a loan for her client as part of her job as an attorney -William, who extends credit solely on timeshare plans -Jackson who is negotiating the terms of a loan on his primary residence -Lola, who is working as an independent contractor underwriter and is underwriting loans

Lola, who is working as an independent contractor underwriter and is underwriting loans

LIBOR is the acronym for: -London Inter-bank Offered Rate. -Land Investment and Bank Offered Regulation. -London Institutions of Britain Organization Rule. -Loan and Interest Board Of Rates.

London Inter-bank Offered Rate.

Which of the following would be considered a trigger term except: -Low down payment for qualified borrowers -$500 a month mortgage payments -3% interest rate -$1,000 down

Low down payment for qualified borrowers

Which rule mandates disclosure to consumers that mortgage relief providers have no connection to any government program or agency? -Home Mortgage Disclosure Act -Fair and Accurate Credit Transactions Act -MARS Rule -Safeguards Rule

MARS Rule

Which is not a credit reporting agency? -Equifax -TransUnion -Experian -MGIC

MGIC

All of the following must be deposited into trust accounts EXCEPT: -Application Fees -Rate-lock Commitment Fees -MLO Commission Checks -Prepaid Attorney Charges

MLO Commission Checks

According to RESPA an MLO is considered to have taken an application when the: -customer calls to ask about rates and the MLO asks questions. -customer calls to inquire about loan programs and the MLO asks questions. -MLO has gathered enough information to make a credit decision. -MLO provides a possible interest rate.

MLO has gathered enough information to make a credit decision.

Each individual state has its own prohibited content information, however some prohibited acts are consistent in every state. Which of the following would not be considered a prohibited act? -Conduct any business covered by the S.A.F.E. Act without holding a valid license as required under this Act, or assist or aide and abet any person in the conduct of business under this Act without a valid license as required under this Act -Make disclosures as required by the S.A.F.E. Act and any other applicable state or federal law including regulations thereunder -Fail to comply with the S.A.F.E. Act or rules or regulations promulgated under this Act, or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this A -Make, in any manner, any false or deceptive statement or representation

Make disclosures as required by the S.A.F.E. Act and any other applicable state or federal law including regulations thereunder

Under Section X, Information For Government Monitoring Purposes, you ask the borrower race, ethnicity and gender questions. The borrower tells you that s/he does not wish to furnish that information. In a face to face loan application, what should you do? -Tell the borrower that the questions must be answered for a loan application to be considered complete. -Leave the answers blank but check the box "I do not wish to furnish this information". -Fill in the answers you are sure are correct. -Make your best guess and fill in all the information.

Make your best guess and fill in all the information.

HMDA reports are due to the regulator by which of the following dates? -January 1st -March 1st -June 1st -December 31st

March 1st

Which of the following borrowers would be a good fit for a reverse mortgage? -Janet, who is 50 years old and owns her house, outright -Howard who is 66 years old and just purchased his home 3 years ago -Margaret who is 63 years old and owes only $10,000 on her current mortgage -Saul who is 62 years old and owes $100,000 on his home

Margaret who is 63 years old and owes only $10,000 on her current mortgage

What would the lender use to compute the adjustment on an ARM loan? -Periodic annual and lifetime caps -Margin and Index before the loan is locked, the index after the loan is locked and the rate caps -Margin, Index, and APR -Index and APR

Margin and Index before the loan is locked, the index after the loan is locked and the rate caps

ECOA prevents discrimination based on: -Income -Marital Status -Location -Employment

Marital Status

If appraising a 10 year old residential home, what is the best approach to determine value? -Market value -Property tax assessment -Income approach -Cost to rebuild

Market value

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

Material misstatement

All of the following are considered Federal Banking Agencies except: -The Board of Governors of the Federal Reserve System, The National Credit Union Administration and The Federal Deposit Insurance Corporation. -Mortgage Bankers. -The Director of the Office of Thrift Supervision. -The Comptroller of the Currency.

Mortgage Bankers.

Give the job title for the following definition: One who "assists a consumer in obtaining or applying to obtain a residential mortgage loan." -Loan Processor or Underwriter -Real Estate Broker -Mortgage Loan Originator -Independent Contractor

Mortgage Loan Originator

Which of the following requires the lender to disclose to borrowers the possibility that their loan will be sold, assigned or transferred to another? -Affiliated Business Arrangement Disclosure -GFE -Mortgage Servicing Disclosure -Service Providers List

Mortgage Servicing Disclosure

What is the best way to explain APR to borrowers? -Yield spread premium or service release premium plus all closing costs -Yield spread premium or service release premium plus the interest rate -Mortgage insurance plus the interest rate including loan costs -Interest rate plus all closing costs and prepaids

Mortgage insurance plus the interest rate including loan costs

Which of the following would NOT be an acceptable trust deed rider? -A condo rider -An ARM rider -A PUD rider -Mortgage insurance rider

Mortgage insurance rider

When obtaining hazard insurance, the lender will require a special clause to be inserted into the policy covering them from any loss. This is called? -Release from liability clause -Mortgagee clause -Hold harmless clause -Mortgagor clause

Mortgagee clause

On an appraisal what are the maximum allowed adjustment percentages? -Net 5% and Gross 15% -Net 10% and Gross 20% -Net 15% and Gross 25% -Net 20% and Gross 30%

Net 15% and Gross 25%

Which is not included in debt-to-income ratio? -Netflix monthly fee -MI on an FHA loan -HOA dues not included in the house payment -Credit card debt

Netflix monthly fee

According to FCRA, how often is a consumer entitled to a free copy of their credit score? -Never -Annually -Twice a year -Once every two years

Never

Is a referral fee ever allowed? -No, unless disclosed on the HUD and paid for by borrower -No -Only to a disclosed provider -Only to a lawyer that refers a loan

No

You are doing a refinance loan for your borrowers non-owner occupied property. You look at the property profile and see that the site address and your customers' address are different. What action should you take? -No action required -Call the FBI and report them for fraud -Call your customer to find out why the addresses are different -Mark the property type as owner occupied

No action required

Borrowers must receive the new Closing Disclosure form: -On the day the borrower signs -No later than 48 hours after the borrower signs -No later than seven business days before the borrower signs -No later than three business days before consummation

No later than three business days before consummation

TILA would not apply to which of the following: -Non Owner Occupied loans -Purchases -Refinance transactions -2-4 Unit Owner Occupied Rental units

Non Owner Occupied loans

Which of the following would describe a non-conforming loan? -Non-conforming loans do not follow FHA guidelines -Non-conforming loans do not follow Fannie Mae and Freddie Mac guidelines -Non-conforming loans follow Fannie Mae and Freddie Mac guidelines -Non-conforming loans are subprime loans

Non-conforming loans do not follow Fannie Mae and Freddie Mac guidelines

Which of the following would keep you from getting an FHA loan? -Not having a down payment -No college education -Not having a spouse -Self-employment

Not having a down payment

To transfer an FHA case number, FHA will allow the originating lender to charge how much? -For actual costs -.5% of the loan amount -no less than 1% of the loan amount -Nothing, unless it has been underwritten by the DE underwriter

Nothing, unless it has been underwritten by the DE underwriter

After initial disclosures and the borrower has given you their Intent to Proceed what other initial disclosure do you need to send the borrower? -Nothing, unless there is a Change of Circumstance -A new and final Loan Estimate -A Good Faith Estimate -A settlement Statement

Nothing, unless there is a Change of Circumstance

The borrower right to rescind the loan is disclosed in the: -72-hour Contingency Clause -Loan application -Notice of Right to Cancel -HUD-1 Settlement Statement

Notice of Right to Cancel

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? -Notice to Home Loan Applicant -Credit Authorization Consent -Denial Letter -Rapid Rescore

Notice to Home Applicant

Logan wants to buy an investment property but knows that he will get better terms on the loan if he tells the lender that this is his primary residence. What type of fraud would Logan be committing? -Occupancy Fraud -Identity Theft -Asset Fraud -Income Fraud

Occupancy Fraud

If a Mortgage Loan Originator (MLO) cannot close a loan, he/she can refers the loan to another MLO who can close the loan. Can the referring MLO receive a referral fee? -A referral fee is earned and should be paid to the first MLO. -A referral fee can be paid as long as it is disclosed on the Settlement Statement (HUD-1). -Paying a referral fee is against RESPA. -Paying a referral fee is allowed if the borrower approves it.

Paying a referral fee is against RESPA.

With an ARM, what happens to a borrower's payments if the index increases? -There will be a larger balance due and payable -Payments go down -Payments go up -Payments remain the same

Payments go up

When a lender learns that a property is in a flood zone, the lender must do which of the following? -Place flood insurance on the property at a cost to the borrower -Must immediately call the entire unpaid principle balance due and payable -Begin foreclosure in order to protect its financial interest -Notify the borrower of the flood insurance requirement and have the borrower purchase flood insurance

Place flood insurance on the property at a cost to the borrower

PUD is the acronym for: -Planned Unit Development. -Primary Utility Disclosure. -Preliminary Uniform Disclosure. -Planned Urban Development.

Planned Unit Development.

Your borrower wants to buy an investment property. Which of the following would be used in calculating the housing ratio? -Primary residence utilities -Investment property utilities -Primary residence payment -Investment property reserves

Primary residence payment

PITI is the acronym for: -Principal, Interest, Taxes, Insurance. -Primary Integrated Taxes and Investment. -Price, Investment, Taxes, Insurance. -Property Interest and Tax Installment.

Principal, Interest, Taxes, Insurance.

Which of the following circumstances would disqualify the use of income generated from a basement apartment in qualifying for a Freddie/Fannie loan? -Property was appraised as a single-family dwelling -The property is zoned for 2-4 units -LTV is calculated as a 2-unit property -The apartment was vacant for 4 months

Property was appraised as a single-family dwelling

The Nationwide Multistate Licensing System and Registry accomplishes all of the following except...? -Provides uniform license applications and reporting requirements for State-licensed loan originators. -Provides a comprehensive licensing and supervisory database as well as provides increased accountability and tracking of loan originators. -Enhances consumer protections and supports anti-fraud measures including the collection and disbursement of consumer complaints on behalf of State and Federal mortgage regulators. -Provides tracking of the number of loans each mortgage loan originator writes, including loan amounts and types.

Provides tracking of the number of loans each mortgage loan originator writes, including loan amounts and types.

A licensed mortgage lender may not do which of the following in their advertising? -Publish an advertisement that does not include the lenders unique identifier on their advertisement -Publish an advertisement with their exact name as it appears on their license -Publish an advertisement that shows an insignia designating membership in a particular state association -Publish an advertisement that shows the lenders exact address as it appears on their license

Publish an advertisement that does not include the lenders unique identifier on their advertisement

Which of the following situations is not a red flag that illegal flipping may be taking place? -A group of sellers and buyers changing ownership of one property among them -An inflated appraisal -Purchasing and remodeling a house and selling it for a quick profit -A series of sales within a short period of time such as multiple sales within the last 12 months

Purchasing and remodeling a house and selling it for a quick profit

Which of these actions would indicate that a mortgage loan originator is not committed to privacy and safeguard compliance? -Requiring all computers be password protected and passwords changed periodically -Shredding paper documents and erasing electronic records -Contracting a document disposal company for weekly pick up of locked shredding containers -Putting files in unlocked file cabinets

Putting files in unlocked file cabinets

Which law promotes informed shopping by requiring the disclosure of settlement services to the borrower? -Reg. C -RESPA -Reg. B -TILA

RESPA

In an effort to become an informed borrower, each borrower should receive from the lender all of the following EXCEPT: -Real Estate Purchase Contract. -Good Faith Estimate. -Truth In Lending Disclosure Statement. -RESPA Settlement Costs booklet.

Real Estate Purchase Contract.

RESPA is the acronym for which of the following? -Realty Ethics Settlement Policy Act -Real Estate Sales Procedures Act -Real Estate Settlement Practices and Act -Real Estate Settlement Procedures Act

Real Estate Settlement Procedures Act

RESPA is the acronym for: -Real Estate Sales Procurement Act -Real Estate Sales Process Act -Real Estate Settlement Procedures Act -Rights, Equalization, Stabilization and Processing Act

Real Estate Settlement Procedures Act

All of the following Acts are part of Reg Z except: -Consumer Credit Protection Act. -Truth In Lending Act. -Mortgage Disclosure Improvement Act. -Real Estate Settlement Procedures Act.

Real Estate Settlement Procedures Act.

What fee is not included in the Good Faith Estimate? -Appraisal fee -Credit reporting fee -Mortgage broker fee -Real estate broker fee

Real estate broker fee

"Any activity that involves offering or providing real estate brokerage services to the public," could be used to define what activity? -Loan originating -Real estate brokerage -Loan processing -Property appraisal

Real estate brokerage

Which of the following would a lender NOT consider to be paid in advance? -Real estate commission -Mortgage insurance -Prepaid interest -Hazard insurance

Real estate commission

Which of the following is NOT calculated into the APR? -Fixed interest rate -Lender's origination fee -Realtor's commission -Discount points

Realtor's commission

A lender services a large metropolitan area but refuses to lend in one specific area because the people in that area are low-income. This would be considered: -Reverse redlinig -Redlining -Blockbusting -Steering

Redlining

A minority borrower is refused a loan because the neighborhood that they have chosen has a high number of foreclosures. This is an example of what illegal practice? -Blockbusting -Rating -Redlining -Steering

Redlining

The practice of denying home financing in certain neighborhoods is called: -Redlining -Bait and switch -Dart boarding -Skimming

Redlining

The SAFE Act is designed to do all of the following except: -Reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators. -Establish and maintain a nationwide mortgage licensing system and registry -Reduce fraud by creating an enforcement agency that prosecutes unethical activity -Provide consumers with easily accessible information, offered at no charge, through electronic media, including the Internet

Reduce fraud by creating an enforcement agency that prosecutes unethical activity

Which of the following would NOT be a purpose of a "cash-out refinance"? -Increase the amount of the existing first mortgage and provide cash to the borrower -Refinance at a lower interest rate, reducing the monthly payments; and increase the balance to provide immediate cash -Refinance at a lower loan amount, by providing a significant amount of cash to make up the difference -Pay off a second mortgage with the cash

Refinance at a lower loan amount, by providing a significant amount of cash to make up the difference

Which federal law prohibits mortgage relief service providers from requiring an advance fee before the provider has obtained and the borrower has accepted a written offer from the borrower's lender or servicer? -Reg. N -Reg. O -Reg. X -Reg. Z

Reg. O

The Truth in Lending Act does which of the following? -Requires all loan applications be made in person -Prevents advertising FHA financing to the exclusion of Conventional -Regulates advertising regarding interest rates -Requires a closing cost breakdown on residential loans

Regulates advertising regarding interest rates

What is the federal regulation that implements the Real Estate Settlement Procedures Act? -Regulation C -Regulation X -Regulation Z -Regulation B

Regulation X

Which two regulations require timely disclosures be provided to the borrower within three business days of a 1003? -Regulation B and Regulation C -Regulation H and Regulation Z -Regulation G and Regulation X -Regulation X and Regulation Z

Regulation X and Regulation Z

The 3/7/3 Rule is associated with which law or regulation? -Regulation B -FACT Act -SAFE Act -Regulation Z

Regulation Z

Which law prohibits MLOs from influencing an appraiser to overstate the value of a home in order to get a closed-end loan on the borrower's primary residence approved? -Regulation B -Regulation C -Regulation X -Regulation Z

Regulation Z

HOEPA is an addendum of: -Regulation B. -Regulation C. -Regulation X. -Regulation Z.

Regulation Z.

Which of the following would not be a prohibited practice regarding an appraisal? -Threatening non-payment to manipulate the appraiser into raising the value of the property -Bribing the appraiser for a higher appraised value -Requesting that the appraiser reviews additional comparables -Refusing to use an appraiser again if they do not change the value on an appraisal

Requesting that the appraiser reviews additional comparables

Which of the following is not a HOEPA trigger test? -APR Test -Points and Fees Test -Prepayment penalty Test -Rescission Test

Rescission Test

The following definition describes which of the following?Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or residential real estate upon which is constructed, or intended to be constructed, a dwelling. -Residential Mortgage Loan -Residential Real Estate -Nontraditional Home -Construction Loan

Residential Mortgage Loan

Fill in the blank. Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a dwelling, is called a _____________________. -Short term mortgage loan -Nontraditional mortgage loan -Commercial mortgage loan -Residential mortgage loan

Residential mortgage loan

When considering a VA loan, what additional type of income must be considered? -Residual Income -Social Security Income -Child Support Income -Investment Income

Residual Income

Which of the following would require a person to be licensed as a loan originator? -Assisting a borrower or prospective borrower who is filling out an application by explaining the contents of the application and where particular borrower information is to be provided on the application -Generally describing for a borrower or prospective borrower the loan application process without a discussion of particular loan products. -Responding to a borrower's inquiry resulting from a prequalified offer, collecting detailed identifying information and/or loan application information from the borrower or prospective borrower on behalf of a lender. -Receiving a loan application through the mail and forwarding it, without review, to loan approval personnel.

Responding to a borrower's inquiry resulting from a prequalified offer, collecting detailed identifying information and/or loan application information from the borrower or prospective borrower on behalf of a lender.

Which of the following situations would be considered a prohibited act or practice? -Tyler discusses with a borrower particular rates and terms that they qualify for -Laurie, an independent contract processor, renews her mortgage loan originator license -Riley, working as a processor for a mortgage lender, discusses specific options for locking a borrowers loan -Eileen, a mortgage loan originator, provides an additional appraiser comparables with the hopes that the appraiser might change the value on her borrower's appraisal

Riley, working as a processor for a mortgage lender, discusses specific options for locking a borrowers loan

If the borrower is self-employed, what does the lender look for on the tax returns for income? -Adjusted Gross Income -Schedule C and non-cash expenditures including depreciation -Net Schedule C income -FICA income

Schedule C and non-cash expenditures including depreciation

In qualifying the income of a sole proprietor borrower, the originator should consider which of the following to be most important? -Form 1040 adjusted gross income -Schedule C net income -Expenses reported on Form 2106 -Schedule C net income plus non-cash expenses and depreciation

Schedule C net income plus non-cash expenses and depreciation

If at any time it is determined that the Nationwide Multistate Licensing System and Registry is failing to meet the S.A.F.E. Act's requirements, who is charged with establishing and maintaining a licensing and registry database of loan originators? -The Secretary of State -The Federal Bureau of Investigation -Secretary of Housing and Urban Development -The Bureau of Consumer Financial Protection

Secretary of Housing and Urban Development

What entity works with the NMLSR to establish a backup licensing system, licensing and registration requirements, unique identifiers, and state licensing law requirements? -State Secretary -Secretary of Housing and Urban Development -Secretary of State -Mortgage Licensing State Secretary

Secretary of Housing and Urban Development

What is HOEPA also known as? -Section 30 -Section 32 -Section 33 -Section 34

Section 32

Where, in the TILA is the explanation for higher-priced loans located? -Section 32 -Section 35 -Section 23 -Section 42

Section 35

The Lender Credit section of the LE and CD can be found where? -Section A -Section D -Section I -Section J

Section J

S.A.F.E. is the short title for what Mortgage Licensing act of 2008? -Secure and Fair Enforcement -Secure and Fair Environment -Safe and Fair Enforcement -Systematic and Fair Enforcement

Secure and Fair Enforcement

The Loan Estimate must be: -Received within 3 days of the application -Disclosed within 3 days of the application -Sent within 3 business days of the application -Received within 3 business days of the application

Sent within 3 business days of the application

SRP stands for: -Standard Rate Product. -Servicing Release Pricing. -Service Release Premium. -Standard Rate Premium.

Service Release Premium.

Which disclosure is due within 3 business days of application? -Fair Housing Disclosure -HUD-1 -ECOA Notice -Servicing Disclosure

Servicing Disclosure

Which of the following does RESPA require to be given to the borrower? -Settlement Cost Booklet -Right of Rescission -Lead Based Paint Disclosure -APR Disclosure

Settlement Cost Booklet

Which of the following does RESPA require on a purchase? -Lead paint notice -A 1008 -APR disclosure -Settlement cost booklet

Settlement cost booklet

What is the soonest you can send a Closing Disclosure after the Loan Estimate? -You don't have to send it after, if you need to update the LE, you can do so after the CD was sent as long as you send another CD after it. -Same day. -You have to wait at least one day between sending. -You have to wait at least three days between sending.

You have to wait at least one day between sending.

The borrower applies for a loan and asks about tax impacts. Which of the following should be told to the borrower by the MLO? -Origination fees are tax deductible. -Get tax advice from a trusted friend. -Speak with a tax advisor for tax deductibility. -Mortgage interest is tax deductible.

Speak with a tax advisor for tax deductibility

Reporting of suspected loan fraud should be done at this level of government: -County -State -City -National

State

The guide booklet for all purchase and refinance transactions using the LE and CD is called? -Settlement Cost booklet -Your Home Loan Toolkit -HUD Closing Cost guide -CHARM booklet

Your Home Loan Toolkit

Which of the following must be conspicuously disclosed on all advertisements? -Business name -Company Website Address -License number -Your Unique Identifier

Your Unique Identifier

All fees on the Loan Estimate fall into three (3) categories, these are? -Zero, 10% Cumulative and No Tolerance -Zero, 10% and Unlimited tolerance -Zero, 3% and 10% tolerance -10%, 10% and Zero tolerances

Zero, 10% Cumulative and No Tolerance

Which of the following flood zones require flood insurance? -Zone A -Zone B -Zone Y -Zone Z

Zone A

According to the SAFE Act the only traditional loan in America today is: -a 30 year fixed rate. -any fixed rate loan. -a 30 or 15 yr. fixed rate loans. -Any loan that is not an ARM.

a 30 year fixed rate.

The term, "person" means a natural person. The definition would include all of the following EXCEPT: -corporation. -limited liability company. -association. -a city, county or state government.

a city, county or state government.

FNMA is best described as: -a government sponsored enterprise that buys closed loans. -a government owned and controlled organization that oversees FHA and VA loans. -a government owned organization that approves loans to be purchased from member banks. -a government owned corporation that participates in mortgage backed securities.

a government sponsored enterprise that buys closed loans.

FHLMC (Freddie Mac) is best characterized as: -a government owned organization that approves loans to be purchased from member banks. -a government sponsored enterprise, owned and controlled by the U.S. government. -a government corporation that deals in mortgage backed securities. -a government organization that purchases FHA, and VA loans.

a government sponsored enterprise, owned and controlled by the U.S. government.

A discount point is best described as a charge that the borrower pays to: -a lender to decrease the interest rate on a mortgage loan. -a mortgage broker at the time of application to obtain a favorable rate. -the seller as part of the closing costs of a loan. -a lender to protect against foreclosure.

a lender to decrease the interest rate on a mortgage loan.

You have a borrower/salesperson that incurs expenses that are not reimbursed and are claimed on the tax returns. How is the income calculated? -Make no adjustment for the expenses, these are write-offs for tax purposes. -Subtract the expenses on Form 2106 from the gross income. -The borrower does not need to provide a copy of the tax returns to calculate income if s/he is a W-2 employee. -Use the gross monthly income figure your borrower discloses.

Subtract the expenses on Form 2106 from the gross income.

Regulation Z is also known as which of the following? -ECOA -FHA -RESPA -TILA

TILA

Section 32 which covers high cost loans is part of which federal law? -ECOA -HMDA -RESPA -TILA

TILA

Under what law does the Ability to Repay Rule fall under? -TILA -RESPA -Dodd-Frank -ECOA

TILA

Which law promotes informed use of credit by requiring the disclosure of the APR to the borrower? -Reg. C -RESPA -Reg. B -TILA

TILA

What does TRID stand for? -TILA-RESPA Interspersed Documents -TILA-RESPA Integrative Discovery -TILA-RESPA Integrated Disclosures -TILA-RESPA Integrated Documents

TILA-RESPA Integrated Disclosures

True of False? A depository institution includes any credit union. -TRUE -FALSE

TRUE

True or False. There is more than one definition of business day for TRID. -TRUE -FALSE

TRUE

True or False? A State-licensed loan originator who is approved as an instructor of an NMLS approved continuing education course may receive credit for the originator's own annual continuing education requirement. -TRUE -FALSE

TRUE

True or False? A loan originator who applies to be licensed again after expiration shall complete the Continuing Education requirements for the last year in which the license was held prior to issuance of a renewed license. -TRUE -FALSE

TRUE

True or False? A loan processor or underwriter who does not represent to the public, through advertising or other means of communicating or providing information, that such individual can or will perform any of the activities of a loan originator shall not be required to be a State- licensed loan originator. -TRUE -FALSE

TRUE

True or False? A state-licensed loan originator may not apply credits for education courses taken in one year to meet the continuing education requirements of subsequent years. -TRUE -FALSE

TRUE

True or False? An applicant for licensure will not be issued a mortgage loan originator license if at any time preceding such date of application, the applicant had a felony involving an act of fraud, dishonesty, or a breach of trust, or money laundering. -TRUE -FALSE

TRUE

A balloon loan is best described as: -a loan that is paid in one lump sum. -a loan that has a floating rate. -a loan that exceeds the loan limit. -a loan that is paid annually.

a loan that is paid in one lump sum.

True or False? An applicant is ineligible for a license if they have been convicted of, or pled guilty or no contest to, a felony in a domestic, foreign, or military court in the seven years prior to their application for a license. -TRUE -FALSE

TRUE

True or False? An individual does not need to be licensed if that person performs only purely administrative or clerical tasks on behalf of a loan originator. -TRUE -FALSE

TRUE

True or False? An individual engaging solely in loan processor or underwriter activities, shall not represent to the public, through advertising or other means of communicating. -TRUE -FALSE

TRUE

True or False? If an applicant has been involved in an act of fraud, dishonesty, or a breach of trust, or money laundering at any time preceding the date of application, they will not be eligible for a license. -TRUE -FALSE

TRUE

True or False? It is the Secretary's responsibility to conduct an extensive study of the root causes of default and foreclosure of home loans, using as much empirical data as is available. -TRUE -FALSE

TRUE

True or False? No license may be revoked or suspended until after issuing a Notice and a Hearing. -TRUE -FALSE

TRUE

True or False? Non-federally insured credit unions which employ loan originators, shall register such employees with the Nationwide Multistate Licensing System and Registry by furnishing the information concerning the employees' identity. -TRUE -FALSE

TRUE

True or False? Only some states require fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check. -TRUE -FALSE

TRUE

True or False? Pre-licensing education may be offered either in a classroom, online or by any other means approved by the Nationwide Multistate Licensing System and Registry. -TRUE -FALSE

TRUE

True or False? Requiring a consumer to pay a referral fee is considered prohibited conduct. -TRUE -FALSE

TRUE

True or False? States are encouraged to use unique identifiers for their loan originators in lieu of social security numbers. -TRUE -FALSE

TRUE

True or False? The Regulator has both summons and examination authority over any loan originator as may be relevant or material to an investigation of such loan originator for compliance with the licensing requirements. -TRUE -FALSE

TRUE

True or False? The SAFE Act encourages states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators. -TRUE -FALSE

TRUE

True or False? The SAFE Act is designed (in part) to establish and maintain a nationwide mortgage licensing system and registry. -TRUE -FALSE

TRUE

True or False? The definition of a Mortgage Loan Originator does not include an individual engaged solely as a loan processor. -TRUE -FALSE

TRUE

True or False? When referring to surety bonds, immediately upon recovery upon any action on the bond the licensee shall file a new bond. -TRUE -FALSE

TRUE

The APR is the interest rate plus the finance charges computed and expressed as: -a percent. -an annual payment. -a dollar amount. -the amount financed.

a percent.

Which of the following methods of disclosure does NOT meet the requirements of the Equal Credit Opportunity Act (ECOA)? -E-Mail -Mailed Letter -Telephone -Faxed letter

Telephone

MLOs are prohibited from which of the following? -Asking an appraiser to consider other comparable properties -Obtaining multiple appraisals on a property -Telling an appraiser a minimum value needed to approve the loan -Withholding fees from appraisers for substandard performance

Telling an appraiser a minimum value needed to approve the loan

When the interest rate floats, it means which of the following? -That the interest rate cannot go up but can go down -That the interest rate can continue to go up or down until it is locked -That the interest rate cannot go down but can go up -That the interest rate cannot go down or up

That the interest rate can continue to go up or down until it is locked

Which of the following must be provided to the client on an ARM loan? -The "Consumer Handbook on Adjustable Rate Mortgages" -The "ARM Handbook" -"When Your Home is on the Line" -"Your Settlement Costs and You" booklet by HUD

The "Consumer Handbook on Adjustable Rate Mortgages"

Which of the following will not affect a borrower's fixed rate mortgage payment? -An increase in property taxes -An increase in hazard insurance -The 10 year treasury bond -A decrease in property taxes

The 10 year treasury bond

Which of the following is not one of the new disclosures required under TRID? -The Loan Estimate -The Closing Disclosure -The Home Loan Toolkit -The Adverse Action Notice

The Adverse Action Notice

Who is granted broad administrative authority to administer, interpret and enforce this Act (S.A.F.E.), and promulgate rules or regulations implementing this Act, in order to carry out the intentions of the Legislature? -The Commissioner -The Secretary of State -The Lieutenant Governor -The State Financial Supervisorial Authority

The Commissioner

The Nationwide Multistate Licensing System and Registry is developed and maintained by which of the following: -The Conference of State Bank Supervisors and the NMLS -The American Association of Residential Mortgage Regulators and the NMLS -The Conference of State Bank Supervisors and The American Association of Residential Mortgage Regulators -The NMLSR

The Conference of State Bank Supervisors and The American Association of Residential Mortgage Regulators

Which of the following is not considered a Federal Banking Agency? -The Consumer Financial Protection Bureau -The Director of the Office of Thrift Supervision -The National Credit Union Administration -The Federal Deposit Insurance Corporation

The Consumer Financial Protection Bureau

What does COFI stand for? -Central Office of Financing Institute -Comptroller Of Financial Institutions -The commodity used to determine the borrower's interest rate -The Cost Of Funds Index

The Cost Of Funds Index

Which of the following would NOT be included in a list of Federal Banking Agencies? -The Board of Governors of the Federal Reserve System -The National Credit Union Administration -The Comptroller of the Currency -The Director of the Office of Credit Compliance

The Director of the Office of Credit Compliance

What law allows for e-signatures as long as the borrower gives permission? -The Electronic Signatures in Global and National Commerce Act -The Dodd-Frank Act -Gramm-Leach-Bliley -Homeowners Protection Act

The Electronic Signatures in Global and National Commerce Act

The CHARM booklet was prepared by: -the CFPB. -The Dept. of Housing and Urban Development. -The Federal Housing Administration. -The Federal Reserve Board.

The Federal Reserve Board.

The lender discloses the prepayment penalty on which of the following documents? -The 1003 and the TILA -The Good Faith Estimate and the TILA Disclosure -ECOA and TILA disclosure -The trust deed and the trust deed note

The Good Faith Estimate and the TILA Disclosure

In which situation is there no monthly mortgage insurance on an FHA loan (2012)? -The LTV is less than 89.99% and the loan is a 15 year term -The LTV is less than 78% and the loan 15 years or less -There is always monthly mortgage insurance on a 15 year loan -The LTV is 80% and the borrowers have paid for at least 3 years

The LTV is less than 78% and the loan 15 years or less

What are two of the most important documents that the borrower signs at settlement? -The Loan Note and the Deed of Trust -Error and Omissions and the Loan Note -The Loan Note and First Payment Letter -The Mortgage and Right of Rescission

The Loan Note and the Deed of Trust

At the top of page 3 of the Loan Estimate. Who is the primary contact on the loan? -The Lender -The Loan Officer -The Settlement Agent -The Broker

The Loan Officer

What might the results be for a loan officer, if within two months of granting a refinance loan, the borrowers went to another lender who offered a lower rate and refinanced again? -The MLO's company may have to pay a premium recovery. -The wholesale broker agreement may automatically be cancelled. -The initial investor could sue for interest not earned. -The MLO could sue the borrowers for unethical behavior.

The MLO's company may have to pay a premium recovery.

All advertising of a Mortgage Loan Originator must include which of the following? -A photograph of the Mortgage Loan Originator -The Mortgage Loan Originator's unique identifier -Types of loans the Mortgage Loan Originator makes -A disclaimer from the NMLS

The Mortgage Loan Originator's unique identifier

Which disclosure, required to be sent three days after application, indicates to the borrower whether or not the servicing of their loan may be sold or transferred? -The Mortgage Servicing Disclosure -The Service Providers List -The Home Loan Toolkit -The Affiliated Business Arrangement Disclosure

The Mortgage Servicing Disclosure

What entity was created by CSBS and AARMR for the purpose of licensing and registering mortgage loan originators? -The NMLS -The CFPB -The CSBS/AARMR Database -The FTC

The NMLS

All of the following changes are because of The Dodd-Frank Wall Street Reform and Consumer Protection Act except? -The Consumer Financial Protection Bureau (CFPB) -The definition of a Qualified Mortgage (QM) -The Ability to Repay Rule (ATR) -The Red Flag Rule (RFR)

The Red Flag Rule (RFR)

Which of the following is not required by HOEPA? -The APR -The Loan amount -The Right of rescission on a refinance -The Right to receive a copy of seller information

The Right to receive a copy of seller information

Who provides the Annual Escrow Account Disclosure Statement? -The Mortgage Loan Originator -The Broker -The Title Company -The Servicing Lender

The Servicing Lender

A Mortgage Banker is: -a person who engages in the mortgage loan business by directly or indirectly originating and closing mortgage loans with its own funds in the primary market for consideration. -a person who engages in the mortgage loan business by directly or indirectly negotiating or placing mortgage loans for others in the primary market for consideration. -a person who only performs real estate brokerage activities unless the person is compensated by a lender, a mortgage broker, or other loan originator -a contract MLO who works outside of the office and is not sponsored.

a person who engages in the mortgage loan business by directly or indirectly originating and closing mortgage loans with its own funds in the primary market for consideration.

Each loan originator is identified in the NMLS database by: -a license number. -a unique identifier. -his/her Social Security number. -employing the mortgage loan originator.

a unique identifier.

The 1003 is which of the following? -The Underwriting Transmittal -The Uniform Residential Loan Application -The Uniform Residential Appraisal Report -The APR disclosure

The Uniform Residential Loan Application

Which of the following would not require a redisclosure of the CD and start the 3 day wait time over? -Addition of a pre-payment penalty -The adjustment of a fee to bring it into compliance -A change in APR above .125 on a fixed rate -A change in APR above .250 on an ARM

The adjustment of a fee to bring it into compliance

The best description of LTV is a percentage of what? -The amount borrowed compared to the sales price or the appraised value -The down payment compared to the sales price or appraised value -The total of the borrower's monthly debts compared to his/her total monthly income -The loan amount compared to the borrower's total assets

The amount borrowed compared to the sales price or the appraised value

Which of the following best defines yield spread premium? -The amount of premium given by the lender when the interest rate closed is at par -The amount of premium given by the lender when the interest rate closed is floating -The amount of premium given by the lender when the interest rate closed is below par -The amount of premium given by the lender when the interest rate closed is above par

The amount of premium given by the lender when the interest rate closed is above par

Which of the following is NOT a minimum standard for licensing as a state-licensed loan originator? -The applicant has never had a loan originator license revoked. -The applicant has not been convicted/guilty of a felony in the 7-years preceding the date of application for licensing. -The applicant has demonstrated financial responsibility through maintaining a credit score above 600 points. -The applicant has completed pre-licensing education and has passed an approved test.

The applicant has demonstrated financial responsibility through maintaining a credit score above 600 points.

An applicant could still be eligible for a license under which of the following conditions? -The applicant was previously involved in an act of money laundering ten years prior to their application. -The applicant pled guilty to a felony in a domestic court eight years prior to their application. -The applicant has previously had a loan originator license revoked. -All of these conditions would be grounds for immediate rejection of an application.

The applicant pled guilty to a felony in a domestic court eight years prior to their application.

In order to carry out the purposes of examination and investigation authority, all of the following may be done EXCEPT: -retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations. -use, hire, contract or employ public or privately available analytical systems, methods or software to examine or investigate the licensee, individual or person. -access personal and confidential information and distribute said information to the public in the event that doing so would be in the best interest of the general public. -accept and rely on examination or investigation reports made by other government officials, within or without the state.

access personal and confidential information and distribute said information to the public in the event that doing so would be in the best interest of the general public.

The purpose of the Uniform Settlement Statement is to: -disclose the APR. -make sure the lender receives fair compensation. -account for all money involved in the transaction. -explain to the borrower the terms of the loan.

account for all money involved in the transaction.

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

adjust the comparable to the subject property.

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

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

What is the period between rate changes in an ARM called? -change period -index period -term period -adjustment period

adjustment period

Which of the following applies to the right of rescission except: -It's only available on owner occupied refinance transactions -The lender is required to provide 2 copies of the notice of right to rescind at closing -The borrower has 4 days from choosing to rescind the loan -If the borrower does not receive the 2 copies of the notice of right to rescind the borrower has 3 years to rescind the loan

The borrower has 4 days from choosing to rescind the loan

Under Equal Credit Opportunity Act (ECOA), when looking to qualify a borrower, a lender may not consider which of the following? -The borrower is a senior citizen -The borrower has an average credit score -The borrower has had 10 jobs in the past 2 years -The borrower has a low monthly income

The borrower is a senior citizen

If the annual percentage rate (APR) of a loan changes more than .250 of 1% from the original disclosure on an irregular (ARM) transaction, which of the following would be applicable? -The lender is in violation of the law. -The borrower can "lock-in" the loan to avoid further interest increases. -The lender must pay for the borrower's credit report. -The borrower must be given a new disclosure at least 3 business days before the loan can be closed.

The borrower must be given a new disclosure at least 3 business days before the loan can be closed.

Using Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp.) guidelines, what is true if a borrower is purchasing a non owner-occupied 2-4 unit property? -The borrower must have six months PITI in the bank -The loan payment must be sufficient to cover rents -The rent must be sufficient to cover the loan payment -The rent must be lower than the loan payment

The borrower must have six months PITI in the bank

Which of the following is NOT required for bonuses and overtime to be counted as income? -The borrower must establish a positive trend for bonus and overtime income. -The employer must verify that the borrower has received the bonuses and overtime for the past two years and that it is expected to continue. -If the bonuses and overtime is more than 25% of the total income, the borrower must prove the income with two years of signed tax returns. -The borrower must show that the total of bonuses and overtime has been decreasing for the past two years, and that this trend will continue.

The borrower must show that the total of bonuses and overtime has been decreasing for the past two years, and that this trend will continue.

Which of the following would be considered a red flag in an owner occupied refinance loan? -The borrower owns a second home further than 50 miles away. -The borrower lives with his/her parents in the subject property. -The borrower owns another home in the same neighborhood. -The borrower resides in a home in the same neighborhood as subject property

The borrower resides in a home in the same neighborhood as subject property

If fraud is discovered by the servicer, what is LEAST likely to occur? -The borrower will experience a rate increase -A buyback by the originating lender -Calling the note due -The originating lender returns any premium fees

The borrower will experience a rate increase

Approval of a reverse mortgage application will be largely based on which of the following? -The borrower's income -The borrower's credit report -The borrower's equity -The current loan interest rate

The borrower's equity

Luke is a mortgage loan originator, and he is working with a new borrower. Luke needs to determine how much the home is worth versus the loan amount that the new borrower is requesting. What is Luke attempting to determine? -The borrower's debt-to-income ratio -The borrower's loan amount -The borrower's appraised value -The borrower's loan to value ratio

The borrower's loan to value ratio

For the purpose of complying with HMDA rules, a mortgage loan originator must ask all of the following questions except? -The borrower's race -The borrower's ethnicity -The borrower's marital status -The borrower's sex

The borrower's marital status

Borrowers come to you for a mortgage loan. Which of the following would be appropriate to tell them about a fixed-rate mortgage? -Some have up-front fixed fees, but not all. -The rate is fixed for a time, and then may adjust. -The up-front fees are fixed. -The interest rate never changes.

The interest rate never changes.

The borrower wants to get an FHA loan, but a judgment appears on the credit report. Which of the following represents how the judgment will be treated? -As long as the judgment was over one year ago, it has no bearing. -With a letter of explanation, the borrower may be approved for an FHA loan. -The judgment must be paid in full before the borrower can get an FHA loan. -If the judgment was over two years ago, it will have no bearing.

The judgment must be paid in full before the borrower can get an FHA loan.

A borrower wants to get an FHA loan, but a judgment appears on his credit report. Which of the following represents how the judgment will be treated? -As long as the judgment was over one year ago, it has no bearing. -With a letter of explanation, the borrower may be approved for an FHA loan. -The judgment usually must be paid. -If the judgment was over two years ago, it will have no bearing.

The judgment usually must be paid.

Who sets the margin on an ARM? -FHA -The regulatory agency -Federal Reserve Board -The lender

The lender

A mortgage lender gave a final disclosure to a borrower which understated the APR by 50 basis points. What should be done? -The lender has to give the loan at the lower amount. -The lender should prepare new documents and redisclose in accordance with MDIA required waiting periods. -Re-close the transaction. -Nothing, as it was less than the required amount for redisclosure.

The lender should prepare new documents and redisclose in accordance with MDIA required waiting periods.

In the mortgage business, what does the word "term" refer to? -The various "terms" of the promissory note -The amount of time your mortgage license has left before expiration -The length of time of the loan -The time it takes from application to settlement

The length of time of the loan

For a loan to be considered a QM loan, it must meet certain requirements. Which of the following is not one of those requirements? -The loan cannot have any negative amortization -The loan cannot have an interest only payment -The loan cannot have a balloon payment -The loan cannot have a prepayment penalty

The loan cannot have a prepayment penalty

Which loan has priority? -The loan with the lowest rate -The loan that is called the first mortgage -The loan that has the largest balance -The loan that was recorded first

The loan that was recorded first

What two pieces of information is needed to determine what an adjusted interest rate will be on an adjustable rate mortgage? -The margin and the index -The margin and the current interest rate -The index and the current interest rate -The margin, the index, and the current interest rate

The margin and the index

A mortgage company is giving a borrower an FHA 1-year ARM. Which of the following is true? -There is no maximum for changes to the index. -The margin never changes. -The loan is funded by HUD. -The index can only change a max of 1% per year.

The margin never changes.

When fraud on the part of the borrower is found in a loan file, which of the following is likely to occur? -The borrower will not be affected until default -The mortgage broker may be forced to buy back the loan -The loan officer will go to jail -Nothing - it's built into the rates

The mortgage broker may be forced to buy back the loan

The unique identifier of any person originating a residential mortgage loan shall be clearly shown on all of the following except? -Solicitations or advertisements. -Any other documents as established by rule, regulation or order. -All residential mortgage loan application forms. -The office front door or marquee.

The office front door or marquee.

A borrower has an Interest Only mortgage loan and wishes to make the minimum monthly payments required. If the homeowner decides to payoff the loan at the end of the loan term, what will the homeowner be required to pay? -The original loan amount -A balance greater than the original loan amount -A balance less than the original loan amount -The entire purchase price of the property

The original loan amount

If original loan amounts, ending maturity dates and interest rates are the same for two loans. The first loan is an interest-only loan and the other loan is fully amortized. Knowing that, which of the following is true? -The first loan will have a lower interest cost. -The other loan will have a balloon payment. -The other loan will have higher monthly payments. -The first loan will be paid off quicker because it is interest only payments.

The other loan will have higher monthly payments.

When a self-employed borrower is a 25% owner of his business, which of the following documents is required? -The past two years balance sheets -The past two years tax returns -The past two years profit and loss statements -Articles of incorporation

The past two years tax returns

Private Mortgage Insurance is required on conforming 1st mortgage loans when the Loan-To- Value is: -above 80%. -70% - 79.99%. -above 80% except if the loan has a 15-year term. -80% - 89.99%.

above 80%.

An example of prohibited conduct is: -Having the license number and NMLS number on advertising -accepting fees from a consumer in the Loan Originator's own name. -accepting fees in the name of the Loan Originator's employer. -accepting fees payable to 3rd party providers. -having the license number and NMLS number on advertising.

accepting fees from a consumer in the Loan Originator's own name.

How does the secondary market help lenders? -They sell loans. -They insure loans. -They guarantee loans. -They purchase loans.

They purchase loans.

Applicants may retake the exam a total of three (3) times with each retake attempt occurring at least how long after the preceding exam? -Thirty (30) days -Fifteen (15) days -One (1) week -One Month

Thirty (30) days

Which of the following would fall into the 10% cumulative tolerance category if the consumer were allowed to shop? -Origination Fee -Title Insurance Fee -Underwriting Fee -Processing fee

Title Insurance Fee

A state-licensed loan originator means any individual who is all of the following EXCEPT: -a loan originator. -an employee of a depository institution. -not an employee of a subsidiary that is regulated by the Farm Credit Administration. -licensed by a state as a loan originator with a unique identifier from the NMLSR.

an employee of a depository institution.

When money is not paid out and withheld from the funding at a loan closing, these monies are usually held as: -an impound. -an escrow. -an encumbrance. -a withholding.

an escrow.

All of the following are required to be licensed except: -any Mortgage Lender making less than five mortgage loans within any 12 consecutive months. -any person who acts as a Mortgage Broker less than 5 times within any 2 consecutive months. -an independent contractors who engage in loan origination activities as a loan processor or underwriter. -an individual negotiating a residential mortgage loan with or on behalf of an immediate family member.

an individual negotiating a residential mortgage loan with or on behalf of an immediate family member.

A bank, insurance company, savings and loan association, thrift or any lending institution whose loan is regulated by law, is usually known as: -the Federal National Mortgage Association. -a private mortgage repository. -the mortgage broker association. -an institutional lender.

an institutional lender.

You can pay off a FHLMC/FNMA loan without a penalty: -after 1 year. -after three years. -any time during the life of the loan. -when the LTV is 80% or below.

any time during the life of the loan.

If the Regulatory Authority orders a cease and desist, the order becomes effective: -at time the Licensee is served papers. -at the time the Regulatory Authority signs the order. -after the Licensee responds to the order. -The Regulatory Authority cannot order a cease and desist.

at time the Licensee is served papers.

When verifying income for a loan, the borrower's pay-stubs should NOT: -clearly identify the borrower as an employee. -identify the pay period. -be handwritten by the employee. -show Year-To-Date earnings.

be handwritten by the employee.

When doing an appraisal, the appraiser, unless specifically instructed otherwise, will consider the financial part of the transaction to be: -cash or cash equivalent. -a loan with a reasonable down payment. -a high down payment of at least 20%. -The appraiser is not concerned with the financial part of the transaction.

cash or cash equivalent.

The Patriot Act requires loan originators to: -check all gift donors against the known terrorist list. -report suspicious individuals. -keep records with customer identifying information for years. -verify citizenship/legal residency before submitting a file to underwriting.

check all gift donors against the known terrorist list.

Surrender of an MLO license does not affect the MLO's: -ability to originate loans as an employee for a licensed lender. -civil or criminal liability for acts committed prior to the surrender. -ability to process loans as a contract processor. -ability of taking loan applications as an independent contractor.

civil or criminal liability for acts committed prior to the surrender.

A loan originator who applies to be licensed again must: -receive a new unique identifier. -complete the Continuing Education requirements for the last year in which the license was held. -write a letter to the Regulatory Authority requesting a new license. -None of the above.

complete the Continuing Education requirements for the last year in which the license was held.

Regulation Z requires: -disclosure of the settlement costs to buyers and sellers. -disclosure of the impound accounts and the prepaids of the borrower(s). -computation and disclosure of the APR to the borrowers. -disclosure of servicing information on the loan.

computation and disclosure of the APR to the borrowers.

Confidentiality and information sharing by the NMLS about MLOs applies to all of the following EXCEPT: -employment history. -disciplinary actions against mortgage loan originators. -enforcement actions against mortgage loan originators. -credit scores.

credit scores.

In order to be issued a license, an individual must demonstrate financial responsibility, character and general fitness. For the purpose of showing financial responsibility, an individual should not have any of the following, EXCEPT: -current outstanding tax liens or other government liens and filings. -foreclosures within the past three years. -current outstanding judgments as a result of medical expenses. -a pattern of seriously delinquent accounts within the past three years.

current outstanding judgments as a result of medical expenses.

The Truth in Lending Disclosure Statement must reveal all the following EXCEPT the: -date of the first payment. -annual percentage rate -finance charge. -amount financed.

date of the first payment.

An underwriter does all of the following EXCEPT: -determine that the seller has the legal right to sell the property. -determine if the loan is in compliance with investor criteria. -determine the credit worthiness of the borrower. -determine the acceptability of collateral.

determine that the seller has the legal right to sell the property.

Your borrower has a joint-asset account with another person. Most of the money in the account belongs to the non-borrower. The lender requires two months of bank statements. Under this circumstance, the documentation needed by the lender requires you to: -obtain a VOD with only the borrower's name on it. -remove the non-borrower's information since it is not applicable. -disclose and document deposits for the borrower and non-borrower. -temporarily transfer all the money into a separate account with only the borrower's name on it.

disclose and document deposits for the borrower and non-borrower.

Each of the following would be considered a "recurring cost" EXCEPT: -Property taxes -hazard insurance. -discount points. -mortgage insurance. -property taxes.

discount points.

As the lender looks over the borrower's loan application and is deciding whether or not to make the loan, the lender may consider the: -economic health of the borrower. -psychological state of the borrower. -physical state of the borrower. -All of the Above.

economic health of the borrower.

A calculation of the return on investment that considers the price paid, the time held and the interest charged, which on a discounted loan could be greater than the interest charged is called the: -effective rate. -nominal rate. -effective yield. -premium rate.

effective yield.

On an FHA loan, the discount points can be paid: -only through having them added to the loan. -only by the borrower. -only by the seller. -either by the borrower and/or the seller.

either by the borrower and/or the seller.

New VA loans are available to: -family members of veterans. -eligible veterans. -any qualified buyer. -friends of veterans.

eligible veterans.

The Unique Identifier, issued by NMLS, of any person originating a residential mortgage loan shall be clearly shown on all of the following except: -emails. -advertisements. -business cards. -websites.

emails.

Assuming there has been no fraud or adverse action, a borrower is entitled to a free copy of his/her credit report: -every six months. -every year. -every 2 years. -every 3 years.

every year.

The borrower uses his home's equity for a mortgage loan for business purposes. The borrower will use $80,000 to buy restaurant equipment. This loan will be: -exempt from RESPA because it is a business purpose loan. -exempt from RESPA because it is a business purpose loan. -covered by RESPA, as the collateral is a mortgage on the borrower. -covered by RESPA because it is to an individual no matter the purpose of the loan. 5.exempt from RESPA because restaurant equipment loans are not federally related.

exempt from RESPA because it is a business purpose loan.

In a face-to-face loan application with the lender, if the applicant does not wish to answer the questions in the government monitoring section, the loan officer must: -research and obtain the information. -end the process. -check the box "I do not wish to furnish this information". -fill out the information based on visual observation.

fill out the information based on visual observation.

If a property were located in a flood zone, the borrower would be required by the lender to obtain: -flood insurance. -a flood waiver. -a flood protection letter. -nothing extra, but the property hazard policy would be looked at more carefully.

flood insurance.

Under FHA loan rules, effective June 2013, loans beginning at 90% LTV or more will pay an annual mortgage insurance premium (MIP): -for at least 11 years. -for the life of the loan. -until the LTV reaches 78%. -until the LTV reaches 80%.

for the life of the loan.

A requirement in the Dodd-Frank Act requires qualified mortgages (QM) to have/to be: -a Balloon payment. -fully amortizing. -interest only payments. -negative amortization.

fully amortizing.

An MLO referred his pre-approved borrower to a real estate company that both he and his partner own. According to RESPA the MLO must: -also provide a list of alternative real estate companies to the borrower. -disclose the relationship only if the borrower asks. -give full disclosure to the borrower at or prior to the time the referral is made. -not make the referral. Referrals are prohibited by RESPA.

give full disclosure to the borrower at or prior to the time the referral is made.

The main difference between FHA and VA is that VA: -has lower discount points than FHA loans. -has no prepayment penalty. -guarantees the loan whereas FHA insures the loan. -allows assumptions.

guarantees the loan whereas FHA insures the loan.

The state regulatory authority may refuse to renew a license for an MLO if there is a finding that the licensee: -purchased more personal or business real estate than initially disclosed. -has been unethical in the transaction of mortgage lending. -purchased another company in the financial services industry. -has released an employee due to illegal activity by that employee.

has been unethical in the transaction of mortgage lending.

You interview a customer and collect all the information needed to fill out the 1003 and run credit. Before running credit, you specifically ask the client if it is okay to run their credit, and they consent. You should now: -have the customer sign a Borrower's Authorization form and then pull credit. -hang up the phone and run their credit. -ask the borrower to repeat their verbal consent, record it, and then pull credit. -feel confident a Borrower's Signature Authorization is not required as the consent has already been given.

have the customer sign a Borrower's Authorization form and then pull credit.

An MLO is to be state-licensed if: -he/she called a borrower to gather missing information needed to complete an application. -he/she counseled a borrower about loan terms and interest rates. -he/she explained the GFE sent to a borrower. -he/she reviewed the borrower.

he/she counseled a borrower about loan terms and interest rates.

An individual takes "a residential mortgage loan application" if the individual does all of the following, EXCEPT: -he/she is involved in the approval of the loan. -When he/she has received the borrower's or prospective borrower's request or information indirectly. -he/she only input the information into an online application or other automated system. -he/she Is responsible for verifying information.

he/she is involved in the approval of the loan.

It is unethical for an MLO to provide the ______________________________in the loan documentation. -Social Security number of a client -identity of a prior borrower to obtain a loan for a borrower unable to qualify on their own -current occupancy of the property -employment history of a client

identity of a prior borrower to obtain a loan for a borrower unable to qualify on their own

If you are a lender, it is acceptable to REQUIRE the services of a specific provider: -if you have no ownership interest in the provider. -if the other service provider is an affiliate. -as long as you provide the borrower with the appropriate disclosure within three business days of the loan application. -only if the service provider is licensed.

if you have no ownership interest in the provider.

You are working with a customer who has disclosed they have new payment obligations that do not appear on their credit report. You realize that your customer qualifies for a loan based on figures calculated using only payment obligations reported on their credit. In order to ensure your client qualifies, you decide to exclude the payment obligations that do not appear on the credit report. This action is: -Illegal but ethical -legal but unethical. -legal and ethical. -illegal and unethical. -illegal but ethical.

illegal and unethical.

You have completed the necessary Pre-licensure education, testing, and application requirements to obtain your mortgage license. You have been hired by a brokerage and expect your background check to clear shortly. You have a friend who is eager to proceed with a loan application and your manager at the brokerage has said that you can start the file under his/her name, then switch it back to your name once your license arrives. This action is: -legal and ethical. -illegal but ethical. -illegal and unethical. -legal but unethical.

illegal and unethical.

Upon the recovery of any claim on the bond, the licensee shall file a new bond: -within 3 months. -within 14 days. -within 5 days. -.immediately.

immediately.

When an MLO accepts any third party fee from a borrower, the funds should be placed: -in an investment account. -in an escrow account. -mixed with the general funds of the company. -on the loan.

in an escrow account.

A state law that requires payment of interest on an escrow account is: -consistent with RESPA and could therefore be enforced by the state. -in direct violation of RESPA and would therefore be overturned in court, - -inconsistent with RESPA and Federal law would take precedent. -a violation of RESPA interest is not paid on escrow accounts.

in direct violation of RESPA and would therefore be overturned in court

For a Mortgage Servicer, refusing to reinstate a delinquent loan after receiving a payment made to pay all past due amounts: -is permitted. Once the loan has become delinquent, the lender may do whatever they want with it. -is prohibited. Loans must be reinstated once all past due payments have been made. -may be either permitted or prohibited, depending on the length of time the loan has been delinquent. -is permitted if the loan was more than 180 days late

is prohibited. Loans must be reinstated once all past due payments have been made.

All of the following are powers/duties of the Regulatory Authority except: -conduct Investigations and Issue Fees and Penalties. -issue Warrants and Participate in Arrests. -conduct examinations of licensee's books and records. -collect and submit fingerprints and participate in background Investigation done by FBI.

issue Warrants and Participate in Arrests.

The Regulatory Authority may do any of the following if an applicant fails to meet requirements for receiving a license except: -deny a license. -issue a license. -suspend a license. -revoke a license.

issue a license.

The Regulatory Authority may do all of the following except: -establish licensing rules and regulations. -issue, revoke, deny, suspend, and condition licenses. -audit, investigate, and conduct enforcement actions necessary to carrying out the SAFE Act Audit, investigate, and conduct enforcement actions necessary to carry out the SAFE Act. -issue warrants and make arrests as a result of fraudulent activity by a Mortgage Loan Originator.

issue warrants and make arrests as a result of fraudulent activity by a Mortgage Loan Originator.

The SAFE Mortgage Licensing Act is NOT designed to: -increase integrity in the residential mortgage loan market. -enhance consumer protections. -reduce fraud. -keep mortgage rates low with licensing standards.

keep mortgage rates low with licensing standards.

You pull credit on a husband and wife. It turns out their debt-to-income ratio is too high. You notice the majority of the debts belong to the husband. You also note that the wife has enough income to qualify on her own. You remove the husband from the loan, submit the file, and receive approval. This action is: -legal but unethical (except for communal property sales). -illegal but ethical (except for communal property sales). -illegal and unethical (except for communal property sales). -legal and ethical (except for communal property sales).

legal and ethical (except for communal property sales).

A loan officer creates a marketing plan to make between 2k and 4k per loan. His cousin calls, he agrees to do the 300k loan for .75% commission. This is: -legal and unethical but okay because he is family. -illegal and ethical. -illegal and unethical. -legal and ethical because he is within his marketing plan.

legal and ethical because he is within his marketing plan.

On a Federal Residential Loan Application: You initially disclose a rate of 5% to the customer but are floating the rate. Over the next few days, rates improve and you have the option to lock the customer in at a rate of 4.75% and earn the same compensation. This behavior would be considered: -illegal and unethical. -legal and ethical. -illegal but ethical. -legal but unethical.

legal and ethical.

A potential client is shopping around for a competitive rate and a 15-day lead time to close. The brokerage you work for offers highly competitive rates, has an average lead to close time of 30 days, and a fast lead to close time of 21 days. Understanding these figures, you tell the client you can meet their demands and secure their business. This action is: -legal but unethical. -illegal but ethical. -illegal and unethical. -legal and ethical.

legal but unethical.

You have been working with a client for the past six months who has finally been approved by the lender and is ready to close. Two days before closing, interest rates drop and you explain to your customer that you are unable to go with a different lender at the better rate because of the standing commitment to the current lender. You also inform your client that breaking a rate with a lender is very damaging to the broker-lender relationship. After explaining the situation, your client still chooses to back out of the loan and go with a different loan officer. Your client's action in this situation is: -illegal but ethical. -illegal and unethical. -legal but unethical. -legal and ethical.

legal but unethical.

For one person to sign a legal document for another person generally would be considered forgery, unless the person signing had: -a close relationship with the person, i.e., spouse, child, or parent. -There are no circumstances when this is legally allowable. -legal power of attorney. -a writ of being handicapped and unable to sign for themselves.

legal power of attorney.

Some lenders and investors were willing to make subprime loans because: -borrowers typically had greater income stability than with other real estate loans. -borrowers typically had greater net worth than with other real estate loans. -lenders could charge higher rates for the added risk. -lenders experience less risk with subprime loans than with other real estate loans.

lenders could charge higher rates for the added risk.

Early default is usually an indicator of: -FICO score. -a prepayment penalty. -yield spread premium. -loan fraud.

loan fraud.

When a lender in the primary mortgage market sells loans to the secondary market in groups of loans that are similar in quality and size, it is referred to as a: -float agreement. -jumbo package. -loan pool. -conforming loan bundle.

loan pool.

According to Reg. Z, the borrower's automatic right to rescind the loan within 3 business days does not apply to: -loans used to refinance the borrower's home. -loans secured by second trust deeds. -equity lines of credit. -loans to purchase or build the borrower's residence.

loans to purchase or build the borrower's residence.

The Real Estate Settlement Procedures Act does not apply to: -higher loan amounts of $1 million or more on residential properties. -loans used to finance the purchase of 25 acres or more. -refinance transactions. -purchase loans that are secured by a first mortgage on the property.

loans used to finance the purchase of 25 acres or more.

Background checks performed by the Regulatory Authority includes all the following except: -fingerprints, personal history and experience. -state, national, and international criminal history. -marital History. -administrative, civil, or criminal findings by a governmental agency.

marital History.

Interest rates for an FHA loan are set by: -HUD. -Federal Reserve Bank. -market forces and/or negotiation between lender and borrower. -Federal Reserve Board.

market forces and/or negotiation between lender and borrower.

The best appraisal method to be used for a single family residence would be: -market, sales or comparison approach. . -income approach. -cost approach. -gross rent multiplier approach.

market, sales or comparison approach.

Background checks performed by the Regulatory Authority do not include: -a Credit Report. -administrative findings by a governmental agency. -civil, or criminal findings by a governmental agency. -medical findings by a governmental agency.

medical findings by a governmental agency.

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

mortgage.

The entity that services a loan, basically takes on the duties of the: -mortgagee. -mortgagor. -trustor. -obligor.

mortgagee.

According to the SAFE Act a mortgage loan originator employed by a federally insured depository institution: -is not required to be registered or licensed. -must be both registered and licensed. -must be registered. -must be licensed.

must be registered.

Fill in the Blank. In order to maintain a loan originator license, the applicant must be covered by either a surety bond or a(n) __________ , or pays into a state fund, as required by the state loan originator supervisory authority. -employer's letter of credit/recommendation -high credit score -national lender as an employer -net worth

net worth

FHA allows loans on all property types except: -non-owner occupied. -manufactured housing. -2-4 Units. -condominiums.

non-owner occupied.

It is permissible to sign a borrower's application or related documents on behalf of or instead of another Mortgage Broker, Lender, or Loan Originator as long as: -that individual has given consent. -the document must be submitted in a timely manner and the individual who needs to sign cannot do so. -there is a note indicating your action. -none of the above, this action is not permitted.

none of the above, this action is not permitted.

All of the following are grounds for the Regulatory Authority to revoke a license except: -material misstatements in an application. -conviction of any crime of moral turpitude. -failure to account for funds received or disbursed. -not completing Continuing Education before Dec 31st.

not completing Continuing Education before Dec 31st.

If a borrower wants to do a Rate/Term refinance loan and is still in the process of paying off a Chapter 13 bankruptcy, in order to do this loan you will need to: -make sure the bankruptcy was filed at least 7 years ago. -send a letter to the lender requesting permission to proceed. -obtain signed approval from the customer's bankruptcy court judge. -do nothing; special processes are only required for Chapter 7 and Chapter 11 bankruptcies.

obtain signed approval from the customer's bankruptcy court judge.

Each individual state has its own prohibited content information, however some prohibited acts are consistent in every state. All of the following would be considered a prohibited act except: -directly or indirectly employing any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person. -engaging in any unfair or deceptive practice toward any person. -obtaining a loan on real property. -Soliciting or entering into a contract with a borrower that provides, in substance, that the person or individual subject to the S.A.F.E. Act may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for

obtaining a loan on real property.

"Concessions," as relates to the mortgage business are: -illegal forms of advertising by real estate agents and companies. -offers by sellers to pay the buyers' down payment. -offers by sellers to contribute to the closing costs of the buyer. -special add-ons built into the property to make it more sell able to induce buyers into purchasing.

offers by sellers to contribute to the closing costs of the buyer.

Licensee must disclose license and NMLS Number in each of the following circumstances EXCEPT: -at the time fee is paid by loan applicant. -on residential mortgage loan application forms. -on solicitations / advertisements, including, without limitation, business cards and websites. -on personal emails to family and friends.

on personal emails to family and friends.

The Unique Identifier, issued by NMLS, of any person originating a residential mortgage loan shall be clearly shown on all of the following except: -Residential Mortgage Loan Application Forms. -Residential Mortgage Loan Applications. -on the company's front door. -Residential Mortgage Loan Application Advertisements.

on the company's front door.

Negative amortization is when the: -borrower is not making payments on the loan. -mortgagee makes payments to the mortgagor. -payment is interest only, and the principal of the loan is not being reduced. -payment is less than the required interest amount and the loan balance increases.

payment is less than the required interest amount and the loan balance increases.

When there is a clause in a mortgage that requires the borrower to pay an extra fee if the loan is paid off early, it is known as a: -post-payment penalty. -prepayment penalty. -early payoff charge. -prepayment privilege.

prepayment penalty.

When a loan is immediately being sold onto the secondary market, the responsibility of "funding" belongs to the: -borrower. -secondary lender. -primary lender. -seller.

primary lender.

You just closed a loan with a customer and would like to take them out to dinner to celebrate their new home purchase. Midway through the meal, you realize paying for your clients' meals may be considered a violation of RESPA. You should: -ask your clients to pay for your meal. -proceed; it is ok to for you to pay for their meals. -ask your clients to pay for their meals. -pay only if their meal is under $25 which is allowed.

proceed; it is ok to for you to pay for their meals.

The Fair Credit Reporting Act covers all of the following EXCEPT: -disclosing obligations on users of consumer reports. -prohibiting discrimination regarding the handicapped. -regulating the consumer reporting industry. -ensuring fair, timely and accurate reporting of credit information.

prohibiting discrimination regarding the handicapped.

TILA requires all of the following on the initial disclosure except the: -amount financed. -finance charge. -promissory note. -total of payments.

promissory note.

The purpose of Fannie Mae and Freddie Mac is to: -make all loans. -insure all loans. -reinsure or guarantee just FHA and VA loans. -provide a source of funds to the primary market mortgage lenders.

provide a source of funds to the primary market mortgage lenders.

You are working on a file referred to you by a realtor. The realtor calls you to see if there is going to be any problem getting the customer qualified. The realtor wants to know what the borrower's credit scores are before presenting the offer. The most appropriate course of action is to: -refer the realtor to the borrower. -never disclose a borrower's information to a realtor. -obtain permission from the borrower to disclose the information. -tell the realtor the credit score.

refer the realtor to the borrower.

A Good Faith Estimate: -must be within $500 of the final costs. -is an estimate only and is not required to reflect the actual settlement costs. -should exhibit a reasonable relationship to the actual final settlement costs. -be within $1,000 of the final costs.

should exhibit a reasonable relationship to the actual final settlement costs.

The borrower knows that he has derogatory credit. He convinces his brother who has better credit and income to apply. The brother of the borrower is considered a(n): -identity thief. -investor. -mortgage rescuer. -straw buyer.

straw buyer.

A borrower who qualifies for B, C or D paper or less favorable terms and interest rates is referred to as a: -subprime borrower. -conforming borrower. -non-conforming borrower. -secondary borrower.

subprime borrower.

An alternative documentation loan is a type of: -subprime loan. -reverse mortgage. -adjustable rate loan. -seller financing.

subprime loan.

Monthly payments must generally be calculated by assuming that the loan is repaid in ________ during its term. -substantially equal monthly payments -substantially equal annual payments -substantially equal bi-weekly payments -unequal annual payments

substantially equal monthly payments

Underwriters calculate overtime income for a loan by: -using a year-to-date average of the overtime income. -taking a one year average of the overtime income. -taking a two year average of the overtime income. -never allowing overtime income.

taking a two year average of the overtime income.

The Regulatory Authority shall NOT have free and reasonable access to licensees': -books. -records. -offices. -tax returns.

tax returns.

The relationship between the loan amount and the total amount financed, represented as a percentage, is known as: -an ARM. -the APR. -a discount point. -.the note rate.

the APR.

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 Home Mortgage Disclosure Act. -the Community Reinvestment Act. -the Fair Credit Reporting Act. -the Equal Credit Opportunity Act.

the Community Reinvestment Act.

The Nationwide Multistate Licensing System and Registry is developed and maintained by: -the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators. -the American Association of Residential Mortgage Regulators (AARMR) and the National Mortgage Licensing System (NMLS). -the National Credit Union Administration (NCUA) and the Comptroller of the Currency. -the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA).

the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators.

On a conforming purchase loan transaction, the maximum percent a seller can contribute under "Seller Contributions" is determined by: -the LTV on the purchase loan. -the loan amount. -the borrower's middle credit score. -both the LTV and DTI.

the LTV on the purchase loan.

The Regulatory Authority shall renew a mortgage loan originator's (MLO) license if all of the following are done EXCEPT: -the originator continues to meet the minimum requirements. -the originator paid the fee to renew. -the originator satisfied the Continuing Education. -the MLO retests.

the MLO retests.

All of the following are considered a Federal Banking Agency EXCEPT: -The Board of Governors of the Federal Reserve System. -The Comptroller of the Currency. -the FDIC. -the NMLS.

the NMLS.

To accurately predict when a refinanced owner occupied property mortgage loan will fund after settlement, you must consider: -the Three-Day Right of Rescission. -the day of the week the loan closes. -if the lender does "table funding". -if you are allowed to back date or not.

the Three-Day Right of Rescission

The 1003 is also known as: -the settlement closing document. -the transmittal summary. -the loan, disclosure document. -the URLA.

the URLA.

When offering or negotiating the terms of a loan, all of the following may occur, except when: -further verification of information is necessary. -the offer is conditional. -other individuals must complete the loan process. -the appraised value must equal the purchase price.

the appraised value must equal the purchase price.

When an ARM loan is obtained, additional disclosures to the borrower include all the following EXCEPT: -a loan program disclosure. -the balance in the lender's trust account. -a $10,000 loan historical example. -a handbook explaining Adjustable Rate Mortgages.

the balance in the lender's trust account.

It is allowed to discriminate under ECOA if: -the borrower is too young to enter into legally binding documents. -the borrower is too old to understand. -the borrower doesn't speak the same language; you cannot communicate. -Never

the borrower is too young to enter into legally binding documents.

One of the acknowledgments in the signature section of the 1003 loan application, signifies that: -both the MLO and the borrower acknowledge that the borrower has received all appropriate disclosures. -the borrower commits to the repayment of the loan if granted. -the borrower represents that all information contained in the form is the truth. -the MLO has properly explained all blanks on the 1003 loan application.

the borrower represents that all information contained in the form is the truth.

As it relates to a loan, the right of redemption is the right of: -the borrower to renegotiate the terms of the loan. -the lender to foreclose on a property. -the lender to sell the property during the redemptive period. -the borrower to redeem their property during the redemption period.

the borrower to redeem their property during the redemption period.

If the ratios needed to qualify the buyer were expressed as 28/36, it would mean: -the income ratio must fall between 28 and 36. -the debt ratio must fall between 28 and 36. -the debt to income ratio or housing ratio is 28% and the total debt to income ratio is 36%. -the debt or back end ratio is 28 and the front end is 36.

the debt to income ratio or housing ratio is 28% and the total debt to income ratio is 36%.

RESPA imposes requirements about or prohibits all of the following except: -legal kickbacks and referral fees. -the loan origination fee. -the amount of prepaids. -information that must be disclosed to the borrower at the loan application or within 3 business days of the application.

the loan origination fee.

RESPA pertains to: -appraisal companies. -title companies. -the loan process. -the mortgage insurance process.

the loan process.

A lender will not accept a double contract because: -it only benefits the buyer and the seller. -the broker and the realtor could get paid twice. -the loan would be closed and funded based on misrepresentations to the lender. -it creates excess paperwork.

the loan would be closed and funded based on misrepresentations to the lender.

During the term of a fully amortized loan which of the following is true? -the monthly amount going to principle increases -the monthly amount going to interest increases -the monthly payment amount going to principal decreases -the principal balance increases

the monthly amount going to principle increases

The Regulatory Authority may renew a mortgage loan originator's license if all of the following occurs except: -the originator continues to meet the minimum requirements. -the originator paid the fee to renew. -the originator has been involved in an act of fraud, dishonesty, or a breach of trust. -the originator satisfied the continuing education requirements.

the originator has been involved in an act of fraud, dishonesty, or a breach of trust.

The purpose of the Equal Credit Opportunity Act is: -to ensure that all low-income borrowers are given favorable treatment when applying for a loan. -to ensure that all creditors have an equal opportunity to make loans. -to ensure that every borrower will get a loan. -to ensure that all borrowers are given an equal opportunity to get a loan.

to ensure that all borrowers are given an equal opportunity to get a loan.

A unique identifier assigned to each loan originator is used for all of the following reasons EXCEPT: -to facilitate electronic tracking and uniform identification of loan originators. -to allow public access to loan originator licensing information. -to provide personal loan originator information to the general public. -to access information related to the employment history of and the publicly adjudicated disciplinary and enforcement actions against loan originators..

to provide personal loan originator information to the general public.

To satisfy a lender's requirement to verify a prospective borrower's income, a lender will typically want to see employment history for the past: -three years. -one year. -five years. -two years.

two years.

The term "Housing Finance Agency" includes any authority that is/has all of the following EXCEPT: -when chartered by a state to help meet the affordable housing needs of the residents of the state. -when it has the status of a tax-exempt organization. -when it is supervised directly or indirectly by the state government. -when it is subject to audit and review by the state in which it operates.

when it has the status of a tax-exempt organization.

When the mortgage loan amount is at 78% LTV or less of the purchase price of the home, private mortgage insurance: -will be cancelled upon written request of the borrower. -will be cancelled automatically by the title company. -will be cancelled automatically by the lender. -will be required for the life of the loan.

will be cancelled automatically by the lender.

The Borrower is entitled to the disclosure of the costs of a mortgage loan in writing in a form he may keep: -within three business days of the loan application. -prior to making application for a loan. -within 7 business days of the loan application. -Within 3 business days prior to loan closing.

within three business days of the loan application.

It is okay to advertise for specific interest rates, points, or terms if: -you have offered those terms in the past. -your competitors offer similar rates, points, or terms. -you currently offer the terms advertised. -you have considered TILA.

you currently offer the terms advertised.

Under RESPA, the aggregate impound limits at closing are: -zero dollars or 1 months taxes and insurance. -1% of the entire principal balance. -zero dollars / up to 2 months taxes and insurance. -$100 and three months taxes and insurance.

zero dollars / up to 2 months taxes and insurance.

How many years of employment should you document on the 1003 for each borrower? -1 year only -1 year if they are W-2 employees -2 years for both -2 years for at least one of the two borrowers

2 years for both

What are FHA's automated underwriting qualifying ratios? -29/41 -24/36 -36/43 -28/36

29/41

A borrower must provide copies of their business tax returns if they own what percent of the business? -5-10% -10-15% -15-25% -25% or more

25% or more

What is the housing ratio for a borrower who makes $24,000 a year with a payment amount of $560? -25% -28% -23% -31%

28%

When a file is being manually underwritten, the Fannie/Freddie maximum qualifying ratios are: -28/36. -28/43 -29/41. -25/39.

28/36.

True or False? The Regulatory Authority may conduct investigations and issue subpoenas. -TRUE -FALSE

TRUE

Which of the following would NEVER require mortgage insurance? -Federal Housing Administration Loans -Loans with secondary financing -Veterans' Affairs loans -Conventional Loans

Veterans' Affairs loans

The APR includes fees that are required to get the loan. Not included are costs which would occur with a: -first time homebuyer. -home refinance loan. -cash buyer. -construction loan.

cash buyer.

True or False? A state-licensed loan originator may only receive credit for a continuing education course in the year in which the course is taken. -TRUE -FALSE

TRUE

Under Regulation Z which of the following advertisements would require full disclosure of the rate term payment and balance? -"Interest rates are at an all-time low" -"Monthly payments could be under $950 per month" -"No money down" -"Stop paying rent"

"Monthly payments could be under $950 per month"

Allie is looking to purchase a new property. She currently makes $3,200 a month gross. What would be the maximum payment she could have on her new property? -$1,376 -$992 -$2,208 -$2,308

$992

Which of the following are powers/duties of the Regulatory Authority? -Arrest and imprison -Conduct examinations of licensee's books and records -Participate in Background Investigations done by the FBI -Prevent a licensee from taking Continuing Education classes

.Conduct examinations of licensee's books and records

The term "20 basis points" expressed as a percentage is: -0.02% -0.20% -2.00% -20.00%

0.20%

Which of the following are NOT specifically listed as courses required for continuing education? -3 hours of federal laws training -2 hours of ethics -2 hours of nontraditional mortgage product training -1 hours of NMLSR history training

1 hours of NMLSR history training

How much is 1 discount point? -A 1% reduction in the note rate -$1,000 -1% of the loan amount -1% of the sales price

1% of the loan amount

An affiliated business arrangement must be given if there is what percent of an ownership interest? -1% ownership -over 10% ownership -a 25% ownership -If more than 5% is owned the affiliated company cannot be used

1% ownership

The borrowers are purchasing a house with a sales price of $300,000 they put 30% as a down payment. If they paid $3,150 in points, how many points does that represent? -1.05 -2 -2.25 -1.5

1.5

How much is charged for the up front mortgage insurance on an FHA loan (2012)? -1.25% -1.50% -1.75% -2.25%

1.75%

The UFMIP on a 30-year FHA loan (as of June 2012-2013) is? -1.00% -1.75% -2.00% -2.25%

1.75%

What is the amount of FHA's UMIP (2012)? -1.50% -2% -2.25% -1.75%

1.75%

The Verification of Mortgage (VOM) must be provided for all existing mortgages and be sent to the underwriter by the: -processor. -title company. -borrower. -real estate agent.

1.processor.

The estimate closing costs on the mortgage loan disclosed either on the Good Faith Estimate or Loan Estimate are good for: -3 days -7 days -10 days -21 days

10 days

Long term debts are those that have payments remaining for more than: -10 months. -6 months. -12 months. -28 months

10 months.

According to the Fair Credit Reporting Act, a bankruptcy could remain on a credit report for how long? -3 years -5 years -7 years -10 years

10 years

How long before a discharged bankruptcy will be removed from a credit report? -Never 2 -5 years -7 years -10 years

10 years

The Uniform Residential Loan Application is also known as the: -1002 -4506T -MU-4 -1003

1003

How many of the 125 National Test with UST questions are scored? -125 -120 -115 -110

115

COFI is an Index used in which district? -11th District -The Federal District -Cost of Funds Index District -Cost of Funds Index

11th District

According to RESPA, a lender making a purchase loan may collect how many months of hazard insurance at settlement? -12 months -14 months -Two months -Only what is required to pay the insurance premium

14 months

How many questions are on the National Test with the UST? -100 Questions -125 Questions -150 Questions -175 Questions

125 Questions

What percentage of the national test relates to Uniform State Content? -25% -23% -16% -13%

13%

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 -20 -35 -45

15

If the borrower's monthly gross income was $6,000 and the monthly housing expense was: first mortgage payment, $900; monthly property tax $110; monthly hazard insurance $28; and monthly mortgage insurance $60, what is the housing ratio or front end ratio? -15.00% -16.00% -18.30% -17.30%

18.30%

After the crisis of the Great Recession according to FHA Standard underwriting when can a borrower repurchase again after a Chapter 13 bankruptcy? -7yrs from the credit discharge date -5yrs from the credit discharge date -1yr from the credit discharge date -3yrs from the credit discharge date

1yr from the credit discharge date

After the crisis of the Great Recession according to VA underwriting when can a borrower repurchase again after a Chapter 13 bankruptcy? -7yrs into the payout on a case by case basis. -4yrs into the payout on a case by case basis 3.1yr into the payout on a case by case basis 4.3yrs into the payout on a case by case basis

1yr into the payout on a case by case basis

How long must a creditor or servicer retain the Escrow Closing Notice and the Post-Partial Payment Policy disclosure? -5 years -2 years -3 years -10 years

2 years

How many years of employment is required to be disclosed on the 1003? -2 years -3 years -10 years -7 years

2 years

The Truth In Lending Act requires that a borrower be given how many copies of the notice of his right to rescind? -4 -3 -2 -1

2

In order to meet the pre-licensing education requirement, a person shall complete at least 20 hours of approved education. Which of the following is NOT included in the minimum educational requirements? -2 hours of training related to predatory lending laws -3 hours of Federal law and regulations -3 hours of ethics training -2 hours of training related to nontraditional mortgage products

2 hours of training related to predatory lending laws

889.A mortgage loan originator is required to keep a record of compliance with TILA for how many years? 1.2 years 2.3 years 3.5 years 4.7 years

2 years

An active duty service person, or a veteran obtaining his/her first VA loan would pay what amount for the VA funding fee (2012)? -2% -2.15% -2.40% -2.25%

2.15%

What is the funding fee for an active duty veteran or a veteran who has not previously used his/her entitlement and who is not putting down a down-payment (2012)? -1.40% -2.00% -2.15% -1.50%

2.15%

Which of the following is an example of a subprime loan? -2/28 -3/1 -5/1 -360/180

2/28

When was the Housing and Economic Recovery Act signed into law? -2007 -2008 -2009 -2010

2008

What gross percentage of variance on an appraisal report is tolerable when evaluating comparables? -25 -15 -20 -10

25

Which property is exempt under RESPA? -Owner occupied dwellings -25 acres or more -Condominiums -PUDs and condominiums

25 acres or more

After the crisis of the Great Recession according to VA underwriting when can a borrower repurchase again after a foreclosure? -7yrs from the credit report date -5yrs from the credit report date -2yrs from the credit report date -3yrs from the credit report date

2yrs from the credit report date

After the crisis of the Great Recession according to VA underwriting when can a borrower repurchase again after a short sale? -7yrs from the credit report date -5yrs from the credit report date -2yrs from the credit report date -3yrs from the credit report date

2yrs from the credit report date

After the crisis of the Great Recession according to Conforming and High Balance when can a borrower repurchase again after a Chapter 13 bankruptcy? -7yrs from the discharge date -5yrs from the discharge date -2yrs from the discharge date -4yrs from the discharge date

2yrs from the discharge date

After the crisis of the Great Recession according to VA underwriting when can a borrower repurchase again after a Chapter 7 bankruptcy? -7yrs from the discharge date -5yrs from the discharge date -2yrs from the discharge date -3yrs from the discharge date

2yrs from the discharge date

A loan greater than $100,000 is not considered a qualified mortgage (QM) if the points and fees paid by the consumer exceed what percent (%) of the total loan amount? -2 -3 -5 -6.5

3

According to MDIA, when must you provide a copy of the appraisal to your borrower? -3 business days prior to settlement -At settlement -1 business day prior to settlement -Within 90 days after a borrower request for the appraisal

3 business days prior to settlement

In order to renew your license, you must annually complete which of the minimum requirements pertaining to Continuing Education: -3 hours of Federal Law, 2 hours of Ethics, 2 hours of non-traditional and 1 Elective -2 hours of Federal Law, 2 hours of Ethics, 2 hours of non-traditional and 2 Electives -3 hours of Federal Law, 2 hours of Ethics, 1 hours of non-traditional and 2 Electives -2 hours of Federal Law, 3 hours of Ethics, 2 hours of non-traditional and 1 Elective

3 hours of Federal Law, 2 hours of Ethics, 2 hours of non-traditional and 1 Elective

For license renewal, an MLO is required annually to complete a minimum of how many hours of continuing education on the topic of federal law? -2 hrs. -3 hrs. -7 hrs. -8 hrs.

3 hrs.

Carlisle currently has an ARM and his ARM is going to adjust for the first time. The margin on his ARM is 2.25 and his ARM is tied to the LIBOR, and it's currently sitting at 1.25. What would be his interest rate if it adjusted today? -2.25% -1.25% -4.50% -3.50%

3.50%

A lender has how many business days to notify the borrower of an underwriting decision? -3 -10 -30 -60

30

The Equal Credit Opportunity Act is a law that requires the lender to provide the borrower a reason for denial within how many days of loan application? -3 -10 -30 -45

30

The FCRA allows a consumer to dispute inaccurate credit information. How many days are allowed for an incorrect item to be investigated? -30 -60 -90 -120

30

Fill in the Blank. In the event that a Cease and Desist hearing is called, the notice instituting proceedings shall fix a date not earlier than ______ days nor later than ______ days after service of the notice. -15; 30 -15; 60 -30; 45 -30; 60

30; 60

What are the qualifying ratios on an FHA loan when manually underwritten? -28/36 -31/43 -29/41 -33/38

31/43

What is the conventional mortgage back end DTI ratio? -28% -29% -36% -41%

36%

After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a Chapter 7 bankruptcy? -7yrs from the credit discharge date -5yrs from the credit discharge date -3yrs from the credit discharge date -4yrs from the credit discharge date

4yrs from the credit discharge date

Fill in the Blank. A State-licensed loan originator who fails to maintain a valid license for a period of___________ or longer shall retake the test. -5 years -3 years -2 years -1 year

5 years

By taking and passing the UST , as of 3/1/16, you will meet the exam requirements of how many state mortgage agencies? -10 agencies -21 agencies -35 agencies -51 agencies

51 agencies

Hugo is looking to refinance his current property. He currently pays $1200 a month on his home. He also pays $500 a month in child support, $200 for his cell phone, $300 for his student loans, $150 for his credit cards and $200 for his car insurance. Hugo makes $4000 a month gross. What is Hugo's total debt ratio? -50% -43% -53% -51%

53%

A borrower purchasing an investment property must have how many months of payments in reserve? -6 months -3 months -2 months -No months are required

6 months

How long is the waiting period to take the test again after failing 3 consecutive times? -1 year -6 months -4 months -3 months

6 months

If a home is purchased with an FHA owner-occupied loan, the borrower must move in within? -10 days -20 days -30 days -60 days

60 days

On an FHA residence loan, the borrower must occupy the premises within how many days after closing? -45 days -15 days -60 days -30 days

60 days

How many days do you have to correct a non-numeric clerical error on the Closing Disclosure? -10 day after consummation -20 days after consummation -30 days after consummation -60 days after consummation6

60 days after consummation

Most lenders see that a credit score may raise serious questions about a borrower's willingness to repay debts if the score were lower than: -680 -699. -640-659. -700-719. -620-639.

620-639.

What is the HCLTV (HTLTV) assuming a $200,000 value, a $100,000 first mortgage loan, and a $50,000 Home Equity Line of Credit second mortgage with a drawn amount of $30,000? -50% -65% -75% -100%

75%

How many hours of annual continuing education are required by the SAFE Act for state-licensed mortgage loan originators? -3 hours -8 hours -11 hours -20 hours

8 hours

How many hours of continuing education are required for mortgage loan originators? -8 hours -10 hours -12 hours -20 hours

8 hours

In order to meet the annual continuing education requirements, at least how many hours of approved education are required? -4 hours -6 hours -8 hours -20 hours

8 hours

According to Fannie/Freddie guidelines, how long is a credit report good for? -90 days -30 days -60 days -120 days

90 days

Which of the following would NOT be considered a non-traditional mortgage product? -An FHA 15 year mortgage -A VA 25 year mortgage -A Conventional 5/1 ARM -A Conventional 30-year mortgage

A Conventional 30-year mortgage

Which of the following is NOT true of an organization that would be considered a bona fide nonprofit organization? -A bona fide nonprofit organization promotes affordable housing or provides homeownership education, or similar services. -A bona fide nonprofit organization conducts its activities in a manner that serves public or charitable purposes, rather than commercial purposes. -A bona fide nonprofit organization does not compensate its employees. -A bona fide nonprofit organization provides or identifies for the borrower residential mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs.

A bona fide nonprofit organization does not compensate its employees.

Which of the following fraud situations does not involve a straw buyer? -A borrower using a relative -A borrower manipulating a paystub to qualify for a loan -A borrower agreeing to a loan under his name even though he never intends to live in the house or to make the payments. -Two friends scheme to save a home from foreclosure, one friend taking out a loan as owner occupied and the other living in the home

A borrower manipulating a paystub to qualify for a loan

Which of the following situations would NOT require full tax returns to support a loan application? -When a borrower owns other real estate with an income or loss reported -A borrower on Social Security -An employee with bonus income exceeding 25% of total income -When a borrower is employed by a family member

A borrower on Social Security

At closing, which would not be a standard trust deed rider? -An ARM rider -A compliance agreement rider -A planned unit development rider -A graduated payment mortgage rider

A compliance agreement rider

Title is transferred from one party to another through which of the following? -A conveyance -Entitlement -A gift -An encumbrance

A conveyance

RESPA regulations require that an annual escrow statement be provided to the borrower within what time frame? -10 days after the end of the calendar year -Annually -30 days BEFORE the end of the calendar year -Annually 15 days after the funding of the loan by the new servicer

Annually

What is used to buy down a person's interest rate and costs 1% of the loan amount? -An origination point -A discount point -Par rate -Prime rate

A discount point

Rebecca just recently passed the bar exam and became a licensed attorney. She is looking to purchase a new home, and her mortgage loan originator suggested that they look into a loan that has lower payments at the beginning and the payments then increase during the life of the loan. What type of loan is this? -A bridge mortgage -A graduated payment mortgage -A reverse mortgage -An adjustable rate mortgage

A graduated payment mortgage

What is a discount point? -A fee paid to lower the borrower's first loan payment -A fee paid to help pay for part of the borrower's closing costs -A fee to the lender for originating the loan -A fee to permanently reduce the interest rate on a loan

A fee to permanently reduce the interest rate on a loan

When would a subordination agreement be appropriate? -A first mortgage is being refinanced and doesn't want to lose priority to an existing 2nd mortgage. -A first mortgage is being paid off, and the holder of the second mortgage wants to ensure they will have first priority. -A second mortgage is obtained, and the lender wants to ensure that it will be second in priority. -Subordination clauses are never used in the creation of loans, since they create confusion as relates to priority.

A first mortgage is being refinanced and doesn't want to lose priority to an existing 2nd mortgage.

The underwriter will require verification of employment. Which of the following will NOT serve this purpose? -A notarized affidavit from the borrower -Telephone call to the employer by the loan processor -Paycheck stubs -A written letter or completed form directly from the employer

A notarized affidavit from the borrower

Borrowers who qualify for conforming loans would be referred to as: -D paper borrowers. -B paper borrowers. -C paper borrowers. -A paper borrowers.

A paper borrowers.

Which of the following is the best comparable to use for a loan? -An almost identical home, recently sold in foreclosure -Three similar homes currently listed on the same street -A similar home that is currently under contract -A recently sold home, in the neighborhood, similar to the subject property

A recently sold home, in the neighborhood, similar to the subject property

COFI is the acronym for: -Calculation of Foreign Indexes. -Cost of Funds Index. -Coefficient of Funding Index -Confluence of Funds Index

Cost of Funds Index.

Which of the following transactions is not governed by the new TRID Rules? -A reverse mortgage -A closed-end second mortgage -A refinance transaction -A purchase money transaction

A reverse mortgage

Michael does not have enough money to put 20% down on his conventional loan to avoid PMI but really can't afford the payment with the additional cost. Instead of looking for the additional money to put down in cash, Michael contacts a second lender who lends him the additional money he needs to put the 20% down. That second lender and the loan Michael receives is never disclosed to the 1st lender. What would that second loan be considered? -A silent second -A second lien loan -A payday loan -home equity line of credit

A silent second

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

Borrower - legal title, Lender - a lien

Genevieve wants to buy a home, but her credit score took a tank after her divorce. Her brother, Donald has a great credit profile, though, and she asks him to apply for a loan for her. Genevieve promises Donald that she will pay the mortgage. What would Donald be considered? -A good brother -A straw buyer -An investor -A mortgage relief service provider

A straw buyer

What are the Fannie Mae and Freddie Mac guidelines regarding an investment property? -Rents must be greater than the mortgage payment -Borrower must put 20% down -Borrower must have 6 months reserves -Maximum Debt to income ratio is 45%.

Borrower must have 6 months reserves

Which of the following is not one of the three rules outlined within the Gramm-Leach-Bliley Act? -Safeguards Rule -Pretexting Rule -Ability to Repay Rule -Opt-Out Rule

Ability to Repay Rule

Which of the following could be classified as real estate brokerage activity? -Providing privacy and anonymity between parties interested in purchasing, selling or leasing property. -Working with an un-licensed person when the law requires that person to be registered or licensed. -Negotiating financing terms on behalf of any party relating to the sale of property. -Acting as a real estate agent or real estate broker for a buyer of a real property.

Acting as a real estate agent or real estate broker for a buyer of a real property.

What type of scheme is usually occurring when there is a nonexistent property? -Air Loan -Chunking -Churning -Illegal Property Flipping

Air Loan

Standard endorsements on title insurance don't cover which of the following? -Environmental issues -Restrictions and CC&R's -The property address -Air hazards

Air hazards

When a trust deed (or deed of trust) is recorded, which of the following is true? -Ownership is conveyed -A lien is released -An lien is created -It verifies both the lender and borrower signed the document

An lien is created

HMDA requires lenders to request what information from applicants in a face to face interview for home mortgage loans? -Applicant -Number of children the applicant has -Religion of the applicant -Source and seasoning of the down payment

Applicant

According to RESPA, when must an Affiliated Business Arrangement (AfBA) disclosure be provided? -At the time of application even if there are no AfBAs -At or prior to the time a referral is made if there is an AfBA -Within three business days of settlement even if there are no AfBAs -Never; TILA, not RESPA, requires this disclosure

At or prior to the time a referral is made if there is an AfBA

With an FHA loan, which of the following is true concerning qualifying ratios? -Automated underwriting may approve a borrower with ratios higher than 29/41 -A borrower with a very high credit score may get a loan with 55% debt ratio -A borrower with a very low credit score can only borrow to a 31% debt ratio -The maximum ratios in any circumstance are 31/43

Automated underwriting may approve a borrower with ratios higher than 29/41

ECOA is also known as Reg.: -X -Z -B -C

B

Discount points would only be used if the interest rate offered to the borrower were which of the following? -Above par -The prime rate -Below par -Par or anything above par

Below par

-Which of the following entities oversees MDIA? -CFPB -HUD -State Attorney's General -Dept. of Veteran Affairs

CFPB

When a borrower asks for an FHA loan, which of the following is false concerning the borrower's credit? -Collections will not affect the credit score -If the credit score is less than 640, the borrower may still get a loan -With excellent credit, the borrower will not get a better mortgage rate -If the borrower has credit issues, but can convince an underwriter of credit worthiness, s/he may still get a loan

Collections will not affect the credit score

Which of the following financial institutions originates the largest amount of residential mortgage loans without necessarily using its depositors' funds? -Commercial banks -Credit Unions -Savings & Loan -Thrifts and Loan

Commercial banks

Two people obtain a loan and buy a home, taking ownership as joint tenants. Which of the following would NOT be true? -Both must sign on the loan -Each owns 50% -Neither could sell without the other's permission -Each owns 100%

Each owns 50%

Which of the following does not have an effect on mortgage interest rates? -Fraud -Foreclosure -Early Payoff -The Federal Reserve System

Early Payoff

A transaction where the buyers have signed a contract to purchase real property, but have the intention of immediately selling it to another buyer is called: -FICO -A kickback -Flipping -A service release premium

Flipping

The Loan Estimate after disclosure must be kept for how long? -Until Consummation -For 60 days after consummation -For 3 years after disclosure -For 5 years after disclosure

For 3 years after disclosure

The Closing Disclosure must be kept for how long? -For 60 days after consummation -For 3 years after disclosure -For 5 years after disclosure -For 1 year after consummation

For 5 years after disclosure

How long is flood insurance required? -Until the next drought -For the first 5 years -For the life of the loan -Until the LTV is 78% or less

For the life of the loan

Javier is looking to purchase a home, but he does not make enough money to obtain the loan that he wants. Javier, instead of looking for a less expensive property, changes his W-2 to reflect that he is making an additional $1,000 a month. What type of fraud is this? -Fraud for property -Fraud for profit -Fraud for criminal enterprise -Negligent fraud

Fraud for property

If a loan officer were to take a loan application Tuesday at 1:00 p.m., what is the last day that the good faith estimate must be mailed or disclosed? -The same day, Tuesday before end of business -The next day, Wednesday before 5pm -Friday before midnight -Within 3 days before 5pm

Friday before midnight

A mortgage loan that features lower payments in the beginning and increases during the life of the loan is also known as which of the following? -Bridge mortgage -Graduated payment mortgage -Construction to permanent loan -Fixed interest rate mortgage

Graduated payment mortgage

Which of the following is not an index that is typically used for adjustable rate mortgages? -Margin -COFI -HELOC -LIBOR

HELOC

The borrower wants to buy an investment property. Which of the following would NOT be calculated in the back-end ratio? -Health insurance -Car payment -Primary residence payment -Investment property HOA fees

Health insurance

In computing debt ratios, which of the following would NOT be considered? -Second mortgage -Car payment -Hazard Insurance -Health insurance premiums

Health insurance premiums

Which types of loan are governed by HOEPA? -Higher priced loan -High cost loan -Subprime loans -Qualified mortgages

High cost loan

Section 35 of TILA governs what type of loan? -High Cost -Higher priced -Subprime loans -Open-ended loans

Higher priced

HELOC is the acronym for: -Home Equity Line of Credit.. -Housing Equity Loan Corporation. -Housing Equity Loans Of Commission. -House and Environmental Landscaping of Compensation Act.

Home Equity Line of Credit..

One purpose of the Fair and Accurate Credit Transaction Act is to prevent -Predatory lending -Discrimination in lending -Loss of borrower -Identity theft

Identity theft

When is an Affiliated Business Agreement required? -Always when there is a co-borrower/affiliate -Only purchase loans -If an affiliated business is providing services -It is no longer required

If an affiliated business is providing services 4.It is no longer required

If an advertisement contains TRIGGER TERMS, what must then be disclosed? -APR only -APR and payment amount -Interest rate, term, balance, and APR -Interest rate, closing costs, and APR

Interest rate, term, balance, and APR

In which order is the borrower's mortgage payment disbursed? -Interest, principal, escrow -Principal, interest, escrow -Escrow, interest, principal -Interest, escrow, principal

Interest, principal, escrow

Which of the following is not required as part of the application process for a mortgage loan originator? -Fingerprints -Background Check -Interview of Professional References -Credit Check

Interview of Professional References

Seller's Closing Disclosures not prepared by the creditor must be: -Kept for five (5) years -Never be kept as sellers are not taking out a loan -Reviewed for accuracy but does not need kept as part of the transaction -Kept for three (3) years

Kept for five (5) years

For a property purchased for $225,000 with a first mortgage loan amount of $150,000, and a HELOC for 25,000 the LTV and CLTV are? -LTV 77% / CLTV 77% -LTV 66% / CLTV 77% -LTV 77% / CLTV 66% -LTV 150% / CLTV 128%

LTV 66% / CLTV 77%

You have a customer who has been approved by the lender and is ready to close. The customer backs out at the last minute because of a recent interest rate drop and opts to go with a different loan officer. You paid for the appraisal and want to invoice the customer and be reimbursed. This course of action would be considered: -Legal and ethical -Illegal and unethical -Legal but unethical -Illegal but ethical

Legal and ethical

According to HMDA what must be forwarded to the regulator by March 1 of each year? -Adverse Action Notices -Mortgage Call Report -Loan Application Register (LAR) -Red Flags Policy

Loan Application Register (LAR)

What law prohibits loan originators compensation from being based on terms of a loan? -Qualified Mortgage -Ability to Repay -Loan Originator Compensation -Regulation X

Loan Originator Compensation

Each licensee shall make or compile reports or prepare other information as directed. Of the following reports/pieces of information most frequently required, which would NOT be required? -Accounting compilations -Information lists and data concerning loan transactions in a format prescribed -Such other information deemed necessary -Loan types by each MLO

Loan types by each MLO

Which ratio is described as the loan amount divided by the property value? -Debt to Income ratio -Loan-to-value ratio -PITI -Housing expense ratio

Loan-to-value ratio

Which of the following is not considered "prohibited conduct"? -Negligent behavior -Making a costly error -Not acting in good faith -An act of commission as well as omission

Making a costly error

Define "Business day" under the Truth in Lending Act for the three day right of rescission. -Monday through Friday, except federally related holidays -Monday through Saturday, except federally related holidays -Monday through Saturday except legal public holidays -Any day the mortgage company is open for "business"

Monday through Saturday except legal public holidays

MIP is the acronym for: -Mortgage Interest Prediction -Multi Interest Prevention Act -Mortgage Insurance Premium -Malpractice Investigation Penalty

Mortgage Insurance Premium

NMLS stands for: -National Mortgage Licensing Standards -National Mortgage License System -Nationwide Multistate Licensing System -Nationwide Mortgage Licensing Service

Nationwide Multistate Licensing System

NMLS is the acronym for: -National Mortgage Licensing System. -Nations Management License System. -Nationwide Mortgage Loan System of Licensure and Registration. -Nationwide Multistate Licensing System and Registry

Nationwide Multistate Licensing System and Registry

A reverse mortgage has which of the following features? -A prepayment penalty -Negative amortization -Graduated payments -Two closings

Negative amortization

According to the Fair Credit Reporting Act, when are borrowers entitled to get a copy of their credit reports? -Once a year -When the borrower has been turned down for a loan -When the borrower is on public assistance -A borrower has no right to a free copy of his credit report

Once a year

How long must an applicant wait to receive a new license if they have previously had their license revoked? -7 years -10 years -5 years -Once an individual's license has been revoked, that person is never eligible for a future license.

Once an individual's license has been revoked, that person is never eligible for a future license.

Home Owner Association (HOA) dues are disclosed: -Always on the Loan Estimate -If known and only on the Closing Disclosure -Never, as these fees are never charged by the creditor -Only after the fee is known

Only after the fee is known

The consumer can be charged an appraisal review fee? -Only after an appraisal and you know a review is needed -If the appraiser requests a review appraisal be completed -Never -Only if the review fee is disclosed on the Loan Estimate

Only if the review fee is disclosed on the Loan Estimate

A "trigger term" is any number used in advertising, other than the APR. When a trigger term is used, the advertising must include all of the following EXCEPT the: -Origination fee -Payment -Rate -Term

Origination fee

According to the Truth in Lending Act which loan type includes the right to rescind? -Construction -Non-owner occupied refinance -Owner occupied refinance -Purchase

Owner occupied refinance

Which of the following is NOT a penalty for violating the SAFE Act? -Deny, suspend, revoke, condition or decline to renew a license -Pay a fee to the CSBS and AARMR -Impose fines on persons subject to this Act pursuant -Order or direct persons subject to this Act to cease and desist from conducting business

Pay a fee to the CSBS and AARMR

Your customer calls you in the morning and tells you to lock the interest rate at the 5.5% you initially disclosed. You commit to lock the rate, but your day becomes busy and you aren't able to lock it until later in the day. When you go to lock the rate, you notice that the pricing has changed since this morning and the rate of 5.5% is now going to cost an additional $500.00. What is the most appropriate course of action? -Call the customer before locking the rate and tell them about the $500 cost -Pay the $500 cost and lock the rate -Float the rate until rates improve -Lock the rate and charge a $500 administration fee at closing

Pay the $500 cost and lock the rate

When is the funding on a residential construction loan made? -At the time the loan documents are signed -Periodically, as the home is being built -When the home is complete and an occupancy permit issued -When the filing period for all mechanics liens has expired

Periodically, as the home is being built

Background checks performed by the Regulatory Authority cannot include: -fingerprints. -state, national, and international criminal history. -Personal history and experience. -Personal checking account information.

Personal checking account information.

PR is the generally accepted acronym for: -Premium Title Report -Present Time Reclamation Association -Preliminary Title Report -Preliminary Tax Report

Preliminary Title Report

Total Loan Costs includes all of the following except: -Origination Charges -Services you Can Shop For -Services You Cannot Shop For -Prepaids

Prepaids

Which of these property types can be owner occupied? -A second residence -Investment property -Primary residence -Condotels

Primary residence

The mortgage loan you submitted to the Lender has been approved. However, there are some conditions that the Lender requires before the loan docs will be sent to the closing office. These conditions are referred to as: -Prior to doc -Prior to funding -Doc order -Re-draw

Prior to doc

PMI is the acronym for: -Preliminary Mortgage Investigation -Private Mortgage Insurance -Premium Mortgage Insurance -Primary Mortgage Insurance

Private Mortgage Insurance

When an individual is collecting documents for the purpose of completing the loan file, what are they considered to be doing to the loan? -Processing -Underwriting -Originating -Closing

Processing

Which of the following documents would contain the details about the loan amount, payment, when payments are due, late penalty, interest rate, etc.? -Mortgage -Promissory note -Loan package -Trust Deed

Promissory note

Regulation B does which of the following? -Protects a borrower from fraudulent use of their information -Requires Upfront Mortgage Insurance on all FHA loans -Provides equality in the extension of credit -Regulates advertising of APR

Provides equality in the extension of credit

Which of the following is not included in background checks for MLO candidates? -Submitting fingerprints for a criminal history check -Submitting personal history and experience -Authorizing the NMLS or regulator to obtain a credit report -Questioning of friends, coworkers, or family members regarding personal character

Questioning of friends, coworkers, or family members regarding personal character

A Mortgage Servicing Disclosure Statement is required by what law? -MDIA -RESPA -SAFE Act -TILA

RESPA

Regulation X is also known as what law? -FCRA -FHA -RESPA -TILA

RESPA

Which is the primary law that affects mortgage loan closings? -TILA -ECOA -RESPA -HMDA

RESPA

HMDA requires the lenders to obtain which of the following information for each borrower? -Age and Race -Race and Sex -Marital status and Sex -Marital status and Age

Race and Sex

When an individual "offers or negotiates terms of a residential mortgage loan for compensation or gain" he/she also does all but which of the following? -Presents for consideration by a borrower or prospective borrower particular residential mortgage loan terms -Communicates directly or indirectly with a borrower, or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms -Receives a residential mortgage loan application for the purpose of facilitating a decision whether to extend an offer of residential mortgage loan terms to a borrower or prospective borrower -Receives or expects to receive payment of money or anything of value in connection with or as a result of any residential mortgage loan terms entered into as a result of such activities

Receives a residential mortgage loan application for the purpose of facilitating a decision whether to extend an offer of residential mortgage loan terms to a borrower or prospective borrower

Front end ratios do NOT include which of the following? -Principal and interest -Hazard insurance -Rent Payment -Property taxes

Rent Payment

Which of the following is not included in the debt-to-income qualifying ratio? -Installment loans -Rent on current housing -Housing payment -Monthly revolving payments

Rent on current housing

The following definition describes which of the following? Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or residential real estate upon which is constructed, or intended to be constructed, as a dwelling. -Residential Mortgage Loan -Residential Real Estate -Nontraditional Mortgage -Sub-Prime loan

Residential Mortgage Loan

There is a lender working in a large metropolitan area, but currently, they are targeting a low- income neighborhood and charging more for their loans because the individuals in the area are mostly African American. This would be considered: -Chunking -Churning -Reverse Redlining -Redlining

Reverse Redlining

A HECM is what type of loan: -Reverse mortgage -Bridge loan -Graduated payment mortgage -Line of credit

Reverse mortgage

814.A _____ is an interpretation of a Statute. -Statute -Rule -Bill -Legislator

Rule

What federal law details the licensing requirements for mortgage loan originators? -Dodd-Frank -SAFE Act -TILA -Loan Originator Compensation

SAFE Act

When purchasing a home with an FHA loan, which of the following is true concerning employment? -Self-employment is not allowed -Salaried employment is always verified -The employer must have been in business for 2 years -Employment is not verified for an FHA loan

Salaried employment is always verified

What type of appraisal uses compares multiple similar recently sold properties to a borrower's property to determine the value? -Income Approach -Sales Comparison Approach -Cost Approach -Investment Approach

Sales Comparison Approach

Business income is derived from a sole proprietorship and is calculated on which of the following tax forms? -Schedule C -Schedule E -Form 1099 -W-2

Schedule C

S.A.F.E. Act is the acronym for: -Safe And Federal Enforcement Act. -Secondary Amortizing Federal Efficiency Act. -Safe And Sound Financial Emergency Act. -Secure and Fair Enforcement Mortgage Licensing Act.

Secure and Fair Enforcement Mortgage Licensing Act.

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

Security instrument/collateral

If a borrower is denied financing based on credit, which of the following must be done? -Send a written adverse action notice 30 days after the date of the credit report. -Notify borrower by telephone within the next couple of days. -Send a written adverse action notice within 30 days of the date of the application. -Notify borrower in person within the next 15 days.

Send a written adverse action notice within 30 days of the date of the application.

The Privacy Act allows a lender to do which of the following? -Share a borrower's information with those necessary to complete the loan request -Share a borrower's information with anyone if no fee is received -Sell a borrower's information to anyone as long as it is private -Sell a borrower's information with the parent company, affiliates and non-affiliates

Share a borrower's information with those necessary to complete the loan request

Non-conforming or jumbo loans are generally restricted to certain types of property. Which of the following typically IS allowed to receive these loans? -Condominiums -PUD's -Second homes -Single family residences over $417,000

Single family residences over $417,000

After failing three (3) exams, an applicant must wait how long before taking the exam again? -Ninety (90) Days -180 Days -One (1) Month -Six (6) Months

Six (6) Months

Which of the following would qualify as the best comparables for a residential dwelling? -A comparable from a home that has been sold, but has not been closed -Sold homes that are similar to the subject property -Three comparables from homes that have been listed on exactly the same street -A comparable that indicated the highest value of the home, as provided by the real estate agent

Sold homes that are similar to the subject property

Which of the following, under RESPA, could NOT provide settlement services for the loan and purchase of an owner occupied property? -Someone who holds a power of attorney -The lender originating the loan -A licensed escrow officer -A licensed attorney

Someone who holds a power of attorney 2.The lender originating the loan

Included with the application is a "Continuation Sheet." What is the purpose of this form? -To note the financial obligations of the buyer and seller -Space for information or explanations for which there isn't sufficient room on the application -List the verifications associated with income -Provide a summary of the entire transaction

Space for information or explanations for which there isn't sufficient room on the application

Andrew's borrower wants to refinance his home and Andrew has put together some great options. Of those options, Andrew wants his borrower to chose the ARM option because his company is giving bonuses to everyone who sells an ARM. Andrew pressures his borrower into choosing that options. Andrew is guilty of what? -Steering -Churning -Chunking -Flipping

Steering

If an MLO or real estate agent suggests to a client that he move to a particular area to reside in a community that he will fit into, what would that mortgage loan originator or real estate agent be guilty of? -Blockbusting -Flipping -Redlining -Steering

Steering

The best answer for which of the following debts that are considered as part of a borrower's monthly obligation when qualifying for a mortgage loan would be: -Student loan payments and car payments -Life insurance premiums and credit card payments -Gym Membership dues and monthly cell phone bill -Utility payments and monthly health insurance payments

Student loan payments and car payments

An Alt-A or Alt Doc loan would be considered a type of: -Adjustable rate mortgage -Subprime mortgage -Jumbo loan mortgage -Nontraditional mortgage

Subprime mortgage

A loan's APR must be disclosed to the consumer on the: -GFE. -Servicing Disclosure Statement. -Loan Application Register (LAR). -TIL Statement.

TIL Statement.

In an advertisement along with an interest rate what must also be disclosed? -The annual percentage rate -The finance charge -The total of payments -The amount financed

The annual percentage rate

The application for a mortgage loan originator would be denied for all of the following reasons except: -The applicant had a mortgage loan originator license revoked -The applicant was convicted of a felony 5 years ago -The applicant has a foreclosure on their credit report from 4 years ago -The applicant has had seriously delinquent accounts in the past 3 years

The applicant has a foreclosure on their credit report from 4 years ago

Which of the following is responsible for determining the need for flood insurance? -The appraiser -The title company -The loan officer -The borrower

The appraiser

The Legislature established the S.A.F.E. Act as an effective system of supervision and enforcement of the mortgage lending industry. Which of the following authorities are NOT included in this act? -The authority to issue licenses to conduct business under this Act -The authority to deny, suspend, condition or revoke licenses issued under this Act -The authority to examine, investigate and conduct enforcement actions as necessary to carry out the intended purposes of this Act -The authority to issue revised credit scores and personal financial information under this Act

The authority to issue revised credit scores and personal financial information under this Act

An agreement to indemnify against loss arising from a defect in title to real property, usually issued to a buyer of the property by the title company that conduct the search is: -Homeowners insurance -Title insurance -Title search -Hazard insurance

Title insurance

Which of the following would NOT be considered a prepaid item? -Prorated share of property taxes -Partial month's interest on a new loan -Title insurance -Hazard or flood insurance premium for one year

Title insurance

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

The document that creates a lien against the property

Which of the following would NOT be considered a change of circumstance and allow the lender to re-disclose the Loan Estimate? -An Act of God changes the condition of the property -The borrower decides to change from an ARM to a fixed rate product -The borrower's appraisal comes in low and to continue with the loan they need to change from a conventional to an FHA loan -The initial Loan Estimate indicates that the interest rate will be locked, and the mortgage loan originator forgets to lock the loan, and the interest rate goes up the next day, so the mortgage loan originator re-discloses the Loan Estimate with the new r

The initial Loan Estimate indicates that the interest rate will be locked, and the mortgage loan originator forgets to lock the loan, and the interest rate goes up the next day, so the mortgage loan originator re-discloses the Loan Estimate with the new r

Which of the following is true about the index used in an ARM? -LIBOR is always the best index to use. -You can only change the index once during the life of the loan. -The index may only be a US Treasury Bill. -The index rate can change on the loan after settlement

The index rate can change on the loan after settlement

Which of the following is true concerning Service Release Premium (SRP)? -Loan term is a factor of the SRP -Type of loan does not affect the SRP -The interest rate is a factor of the SRP -There is no such thing as SRP

The interest rate is a factor of the SRP

What can you tell a borrower about a 7/1 ARM? -The interest rate may go up only 1% each year for 7 years. -The interest rate is locked for the first year and may only go up 7% over the life of the loan. -The interest rate may only go up 7% over the life of the loan starting the 1st year. -The interest rate is fixed for the first 7 years then is a variable interest rate.

The interest rate is fixed for the first 7 years then is a variable interest rate.

What are FHA loan limits based on? -The sales price after the down payment and upfront mortgage insurance -The sale price of property -The lesser of the sales price or appraised value after the down payment and before upfront mortgage insurance -The appraised value less the down payment after the upfront mortgage premium

The lesser of the sales price or appraised value after the down payment and before upfront mortgage insurance

Which of the following buys closed mortgage loans? -The secondary market -The primary market -The buyer's market -The lender's market

The secondary market

On an FHA loan, which form of a gift is NOT allowed? -The seller gifts the down payment -Gift from a grandmother -Gift from an aunt and uncle -An employer gift which does not have to be repaid

The seller gifts the down payment

Which of the following would NOT cause a delay in funding the loan if closing has already taken place? -Some of the required repairs to the property were not done. -A problem was found in the chain of title for the property. -The address used in all the documents was not correct. -The seller wanted her maiden name included on the deed.

The seller wanted her maiden name included on the deed.

Who determines continuing education requirements and dates for license renewal? -The Governor of the state -The Nationwide Mortgage Licensing System -The state Regulatory Authority as established under the SAFE Act -The CSBS

The state Regulatory Authority as established under the SAFE Act

Who determines continuing education requirements and dates for licensing renewal? -The Governor of the state -The Nationwide Mortgage Licensing System -The state Regulatory Authority as established under the SAFE Act -The National Mortgage Association of Education

The state Regulatory Authority as established under the SAFE Act

Which best describes the total debt ratio? -The total cost of all debt divided by the borrowers gross monthly income -The total cost of all housing expenses divided by the borrowers gross monthly income -The total cost of all debt divided by the borrowers net monthly income -The total cost of all the housing expenses divided by the borrower net monthly income

The total cost of all debt divided by the borrowers gross monthly income

The legal link between a person who owns property and the property itself is the: -Title -Deed -Mortgage -Promissory Note

Title

Which best describes the housing ratio? -The total cost of all debt divided by the borrower's gross monthly income -The total cost of all housing expenses divided by the borrowers gross monthly income -The total cost of all debt divided by the borrowers net monthly income -The total cost of all the housing expenses divided by the borrower net monthly income

The total cost of all housing expenses divided by the borrowers gross monthly income

Which of the following would usually not fall into the zero tolerance category? -Transfer Taxes -Credit Report -Title Insurance -Appraisal

Title Insurance

What is the maximum fee an MLO can charge for completing the Truth in Lending Disclosure Statement if properly disclosed? -.125% of the loan amount -250 of the closed loan amount borrowed. -$100.00 is the maximum fee allowed -There can be no fee charged for the TIL

There can be no fee charged for the TIL

What is the legal amount that an ARM can increase in one year? -6% -2% -1% -There is no legal amount

There is no legal amount

Which is true regarding FHA loans? -There is no prepayment penalty -The prepayment penalty is .5% of the note -The loan can be prepaid after 5 years with no penalty -The prepayment penalty is 6 months of interest

There is no prepayment penalty

The borrower refinances a loan on a Pizza shop. Under the Truth in Lending Act how long will he have to change his mind after he signs the refinance loan papers? -There is no right of rescission it is an exempt transaction -1 business day -3 business days -30 days

There is no right of rescission it is an exempt transaction

-Travis is disclosing an origination fee of $1200 on the initial Loan Estimate. What is the maximum that origination fee can change between the Loan Estimate and the Closing Disclosure? -10% cumulatively -It can go up as much as Travis wants -There is zero tolerance, and it cannot change at all -It can go up $100 only

There is zero tolerance, and it cannot change at all

The borrowers wanted to expedite the home-buying process so they got a pre-approval. Which statement best describes their situation? -They may or may not get the loan from the lender who gave the pre-approval. -they will get the loan, but the interest rate may be different than originally quoted. -They will definitely get the loan if they paid a non-refundable deposit to the lender. -They will not get the loan, but now know what they qualify for.

They may or may not get the loan from the lender who gave the pre-approval.

An applicant for licensure must pass a written test which shall include questions on laws and regulations. General mortgage industry knowledge, mortgage loan origination, and Ethics. Which of the following would NOT necessarily be included? -Title Insurance policies and endorsement codes -Consumer protection -Fair lending issues and concerns -Fraud prevention and awareness

Title Insurance policies and endorsement codes

How many business days after a mortgage loan application does a mortgage loan originator have to mail disclosures to the borrower? -Four -Three -Two -One

Three

What are the terms of the "cooling off" period if a loan falls under HOEPA? -Three business days prior to closing -Three business days after closing -Seven business days prior to closing -30 business days after closing

Three business days prior to closing

According to TILA how long is the right of rescission for borrowers who have NOT been provided with full and correct disclosures of the APR (within stated limits)? -Three business days -Thirty days -One year -Three years

Three years

What is the purpose of HMDA? -To detect discriminatory lending -To prevent high cost loans -To regulate Home Mortgage Appraisals -To oversee the FHA

To detect discriminatory lending

The cost approach of an appraisal is used for all of the following EXCEPT: -To determine the cost of income, on a rental property -insurance. -new construction. -remodel. -to determine the cost of income, on a rental property.

To determine the cost of income, on a rental property

Which of the following statements best describes Form 1008? -FHA loan application -FNMA/FHLMC loan application -Transmittal summary -Underwriter request for more information

Transmittal summary

What would the best solution be if the borrower or co-borrower is not present to sign the closing documents? -Have the borrower or co-borrower sign for the absent individual -Use a specific power of attorney -Have a relative or spouse sign for him/her -Use a name affidavit

Use a specific power of attorney

TILA is the acronym for which of the following? -Truthful Integrity in Lending Act -True Information in Lending Act -Trust in Lender -Truth in Lending Act

Truth in Lending Act

Regulation Z is another name for: -Equal Credit Opportunity Act. -Truth in Lending Act. -Americans With Disabilities Act. -Home Mortgage Disclosure Act.

Truth in Lending Act.

Which form is used most frequently for residential appraisals? -HVCC -URAR -USPAP -1025

URAR

What law requires identification be provided on a mortgage transaction? -Gramm-Leach-Bliley -Red Flags Rule -USA Patriot Act -BSA/AML

USA Patriot Act

Who of the following would be an appropriate person to discuss the borrower's credit? -Seller -Selling agent -Underwriter -Listing Agent

Underwriter

Who reviews all the loan documents, verifications, and gives final approval or disapproval to a loan? -Director of Loans -Loan officer -Loan processor -Underwriter

Underwriter

When an individual is reviewing a loan file to determine that risk involved for the lender and to determine whether the borrower meets the requirements for the loan they are considered to be doing what to the loan? -Processing -Underwriting -Originating -Closing

Underwriting

URAR is the acronym for: -Uniform Residential Appraisal Report -Uniform Real Estate Appraisal Report -Uniform Real Estate Appraisal Report -Universal Residential Appraisal Report

Uniform Residential Appraisal Report

Which of the following are not included in the housing qualifying ratio? -Hazard insurance -Property taxes -Home Owners Association Dues 4.Utilities -Utilities

Utilities

How much money is required for fire insurance on a refinance at settlement? -14 months -1 year -2 months -Whatever is needed to renew coverage when the insurance expires

Whatever is needed to renew coverage when the insurance expires

According to the Fair and Accurate Credit Transactions Act, when is a borrower entitled to get a copy of their credit score? -Four times a year -When the borrower has applied for a loan and had his/her credit reviewed -When the borrower is on public assistance -A borrower has no right to a free copy of their credit score.

When the borrower has applied for a loan and had his/her credit reviewed

When is it legal and/or acceptable for the loan originator to provide the consumer with a copy of his/her credit report? -Never -When the customer pays for it -When the customer requests it -When contracts with the credit reporting agency do not prohibit it

When contracts with the credit reporting agency do not prohibit it

At what LTV is the lender required to automatically remove private mortgage insurance? -When the LTV is 78% of the original purchase price or appraised value -When the LTV is 80% of the purchase price or appraisal -After paying on an FHA loan for five years -The lender is never required to "automatically" remove the mortgage insurance

When the LTV is 78% of the original purchase price or appraised value

When is a loan officer authorized to refuse to accept a loan application? -When the borrowers' property is in a declining market -When the lender doesn't think the property will appraise high enough -When the applicant refuses to disclose their race and marital status -When the information supplied by the applicant appears fraudulent

When the information supplied by the applicant appears fraudulent

In selling a home which has an FHA loan, when can the FHA loan be assumed? -FHA loans cannot be assumed -When the seller indemnifies the lender against default -When the buyer signs a release document -When the loan documents say the FHA loan is assumable

When the loan documents say the FHA loan is assumable

When is a loan not subject to RESPA? -When it's a primary residence -When it's a second residence -When the property is 5 acres or less -When the property will be used for a commercial purpose

When the property will be used for a commercial purpose

Which of the following is true concerning the YSP? -YSP is credit to the borrower. -YSP is the same for every lender. -YSP is what a broker will pay for originating a loan below par. -Banks are not allowed to receive a YSP.

YSP is credit to the borrower.

Alexandra is a licensed mortgage loan originator, and she works for a licensed mortgage lender. Alexandra also works part time as a mortgage loan originator at her friend's brokerage. Is Alexandra doing anything wrong? -Yes, Alexandra is working simultaneously for two companies, which is prohibited -No, Alexandra is properly licensed -Yes, Alexandra is not properly licensed -No, Alexandra can work for more than 1 company at a time

Yes, Alexandra is working simultaneously for two companies, which is prohibited

A yield spread premium occurs when: -an interest rate is charged above the par rate and is a credit to the borrower. -an interest rate is charged below the par rate and is a credit to the borrower. -an interest rate that is equal to the lender's par rate is charged. -the mortgage rate is bought down.

an interest rate is charged above the par rate and is a credit to the borrower.

A fee charged to the borrower by lenders to cover such costs as preparation of documents and other services provided by the primary lender and computed as a percentage of the loan is known as: -P.O.C. (paid outside of closing). -an origination fee. -yield spread premium. -discount point(s).

an origination fee.

In all forms of advertising credit, the only number that can be freely used is the: -total number of payments. -amount financed. -annual percentage rate. -finance charge.

annual percentage rate.

FHA loans can be obtained by: -middle income wage earners as defined by law. -low income wage earners only. -only first time home buyers. -anyone.

anyone.

RESPA requires disclosure to the consumer of: -any affiliated business arrangement (AfBA). -the annual percentage rate (APR). -the number of business days before settlement. -use of race, ethnicity and gender for government reporting purposes.

any affiliated business arrangement (AfBA).

A Mortgage Loan Originator is: -any person who for compensation places a loan within this state for others. -an individual engaged solely as a loan processor. -a person involved in timeshares. -a person servicing mortgage loans.

any person who for compensation places a loan within this state for others.

When purchasing a non-owner occupied property, the top ratio uses the: -applicant's current housing expense. -current housing expense and the expense of the new property. -expense of the property being purchased. -combined housing expenses of all properties owned.

applicant's current housing expense.

According to the ECOA an adverse action notice is NOT required to include the: -appraiser. -credit bureau information. -lender. -lender reason(s) for denial.

appraiser.

Under state law, the state licensing agency has the authority to conduct investigations of any loan originator that is licensed or required to be licensed. No person who is being examined or investigated may knowingly withhold information. This includes all of the following except: -being "gone" during an examination. -removing information. -mutilating or destroying information. -secreting any books or records (including computer records).

being "gone" during an examination.

The right of rescission provided under Regulation Z is the right to: -pay discount points. -cancel a refinance transaction. -receive a refund of unpaid mortgage insurance premiums. -receive a refund of unpaid mortgage insurance premiums.

cancel a refinance transaction.

The penalties issued by the Regulatory Authority are ______ penalties on mortgage loan originators. -civil -criminal

civil

The SAFE Act: -prevents MLOs from practicing without a license. -establishes minimum standards for licensing and registering of mortgage loan originators . -prevents abuses in consumer mortgage transactions. -prevents kickbacks referral fees and unearned fees.

establishes minimum standards for licensing and registering of mortgage loan originators .

The SAFE Mortgage Licensing Act is designed to do all of the following EXCEPT? -increase integrity in the residential mortgage loan market. -enhance consumer protections. -reduce fraud. -license all Mortgage Loan Originators.

license all Mortgage Loan Originators.

Endorsements do not include: -true and correct address. -environmental. -encroachments. -liens.

liens.

On the application, property tax is entered in the amount that will be paid: -annually. -Property tax is not entered any where on the application. -monthly. -quarterly.

monthly.

On the loan application, the term of the loan should be entered in number of: -years. -days. -months. -units.

months.

A person, who brings a borrower and lender together, is knows as a: -loan officer. -mortgage lender. -mortgage broker. -loan intermediary.

mortgage broker.

A person, who functions as an intermediary between a lender and a borrower, is known as a: -loan officer. -loan intermediary. -mortgage broker. -mortgage lender.

mortgage broker.

Base employment income must be verified by: -current year-to-date pay stubs and three year's W-2 Forms. -two years of W-2 Forms. -most recent and current year-to-date pay stubs and the past two year's W-2 Forms. -The IRS does not encourage the use of W-2 Forms for employment verification since it may be ruled an invasion of privacy.

most recent and current year-to-date pay stubs and the past two year's W-2 Forms.

The Regulatory Authority shall have free and reasonable access to all of the following except: -books and Records. -records, hard copy and electronic files. -personal credit report. -personal checking account information.

personal checking account information.

A lender who preys upon minority, elderly or recent immigrant borrowers in order to take their home's equity is engaging in: -home equity lending. -predatory lending. -negative amortization lending. -equity lending.

predatory lending.

Closing costs are those costs related to the loan EXCEPT: -discount points. -prepaid items. -processing fee. -loan origination fee.

prepaid items.

According to the Fair Credit Reporting Act if adverse action is taken against a prospective borrower because of information on a credit report, the lender who used that report is required to: -dispute the decision in writing for the customer. -provide the agency contact information required for the consumer to obtain a free copy of the credit report used. -recommend credit counseling to the borrower. -review the credit report with the borrower for inaccuracies.

provide the agency contact information required for the consumer to obtain a free copy of the credit report used.

The purpose of a Market Conditions Addendum is to: -replace the need for a full appraisal. -reveal prior marketing efforts by any realtor. -provide the lender with an understanding of the market trends and conditions in the subject property. -provide the lender/client with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood.

provide the lender/client with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood.

The Real Estate Settlement Procedures Act requires all of the following except: -a Good Faith Estimate. -a Settlement Statement. -a Special Information Booklet. -race, ethnicity and gender information.

race, ethnicity and gender information.

The amount of homeowners insurance required by the lender is the lesser of the loan amount or: -the value of the home. -the sales price. -replacement cost. -50% of the loan value.

replacement cost.

The Truth in Lending Act protects the borrower by: -putting caps or limits on rate adjustments. -making low interest rate guarantees. -requiring disclosure of loan costs -establishing usury laws.

requiring disclosure of loan costs

RESPA applies to all: -business real estate loans. -commercial real estate loans. -residential real estate loan. -real estate purchase transactions.

residential real estate loan.

Regulation Z applies to all: -business loans with collateral. -commercial real estate loans. -residential real estate mortgage transactions. -agricultural purchase transactions.

residential real estate mortgage transactions.

When an FHA mortgage loan amount is at 95% LTV and has a term longer than 15 years the mortgage insurance premium: -will be required for the life of the loan. -can be cancelled upon written request of the borrower. -may be cancelled automatically by the title company. -may be cancelled automatically by the lender.

will be required for the life of the loan.

The primary purpose of the loan application is to determine the borrower's: -purpose for obtaining the loan. -collateral and the value of the collateral. -stability, ability, and willingness to repay the loan. -need for the loan.

stability, ability, and willingness to repay the loan.

The borrower is applying as self-employed. An underwriter would deal with the Schedule A and 2106 expenses by: -subtracting unreimbursed business expenses. -adding unreimbursed personal expenses to the income. -adding expenses to the income. -subtracting expenses from the income.

subtracting expenses from the income.

Your customer owns several rental properties, one-third of which have a Negative Net Lease. Therefore, you can conclude that: -two of the rentals are owned outright. -the rents are equal to or less than the mortgage amount due each month. -more rent is collected than your borrowers owe in payments each month. -one out of the three rental properties is vacant.

the rents are equal to or less than the mortgage amount due each month.

According to the Truth-in-Lending Act (TILA), the term "refinance" applies to: -a change in payment schedule. -a reduction of the APR. -the renewal of a single payment obligation with no change in the original terms. -the satisfaction of an existing obligation and its replacement by a new obligation.

the satisfaction of an existing obligation and its replacement by a new obligation.

Applicants may retake the exam a total of three (3) times with each retake occurring at least how long after the preceding exam? -thirty (30) days -fifteen (15) days -five (5) days -180 days

thirty (30) days

The length of the rescission period for a refinanced mortgage loan is: -three business days including Saturday and excluding Sunday and holidays. -three business days including Saturday and Sunday excluding holidays. -five business days including Saturday and excluding Sunday and holidays. -three business days excluding Sunday and legal public holidays.

three business days excluding Sunday and legal public holidays.

For income from alimony and child support to be recognized as income, the remaining term of such income must exceed: -five years. -three years. -seven years. -one year.

three years.

The APR includes all fees that are required in order to get the loan. Not included is: -title Insurance. -daily Interest charge. -MIP or PMI. -origination fee.

title Insurance.

If the borrowers wanted to be sure that the interest rate available at the time of their application would be the same when they closed on their home purchase, they would want: -to "buy down" the interest rate. -to pay an YSP/SRP to ensure the rate. -to "lock" their interest rate. -discount points to obtain the rate.

to "lock" their interest rate.

A licensed loan originator who is an instructor of an approved Continuing Education course may receive credit for the licensed loan originator's own annual Continuing Education requirement at the rate of: -one hour of credit for every one hour taught. -two hours of credit for every one hour taught. -three hours of credit for every one hour taught. -instructors may not receive credit in this way.

two hours of credit for every one hour taught.

Rental income can be verified by any of the following methods EXCEPT: -copies of all rental agreements. -written statement in the form of a notarized affidavit from the borrower certifying that the rent was actually received. -IRS Schedule E. -two years of tax returns.

written statement in the form of a notarized affidavit from the borrower certifying that the rent was actually received.

Self-employed borrowers must provide Federal Tax Returns, including all applicable schedules for the previous: -one year. -three years. -two years. -four years.

two years

If dividends and interest received are being used as income, the borrower must show documentation that they have been received for at least the past: -two years. -three years. -one year. -five years.

two years.

Regulation B allows all of the following except: -inquiries about the ages of dependents. -inquiries about citizenship and residency status. -inquiring about receiving child support and/or alimony. -using the terms husband or wife when inquiring about a potential co-borrower.

using the terms husband or wife when inquiring about a potential co-borrower.

If a mortgage loan originator (MLO) consummates a loan while his license is suspended or revoked, the loan is: -closed, nothing needs to be done. -fraudulent and will need to be immediately repaid. -valid but the MLO violated the law. -void and will need to be rewritten.

valid but the MLO violated the law.

A loan originator may keep both the: -yield spread premium and the origination fee. -credit report fee and yield spread premium. -discount points and appraisal fee. -yield spread premium and discount points.

yield spread premium and the origination fee.

True or False? Every state requires those applying for a loan originator license to agree to a background check. -TRUE -FALSE

TRUE

Loan documentation fraud may include any of the following except: -the MLO. -the lender. -the borrower. -the realtor.

the lender.