NMLS

If a property has a sale price of $190,000 and an appraised value of $187,000 with a loan amount of $142,100, what is the LTV?

$142,100 (proposed loan amount) divided by $187,000 (lesser of sale price or appraised value) equals 75.99% LTV.

With a VA-guaranteed loan, the lender may charge a flat fee, not to exceed ____of the loan amount, to cover the lender's costs and services for originating the loan.

1%

How many days after being provided with a Loan Estimate does a consumer have to proceed with a mortgage loan before a lender may revise the Loan Estimate to change a settlement charge?

10 business days

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

12

As set forth by Regulation X, a servicer must not make the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process unless a borrower's mortgage loan obligation is more than ____ days delinquent, the foreclosure is based on a borrower's violation of a due-on-sale clause, or the servicer is joining the foreclosure action of a superior or subordinate lienholder.

120

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

120

Regulation N (Mortgage Acts and Practices - Advertising, 12 CFR Part 1014) sets forth prohibited misrepresentations in commercial communication. A lender is in violation of Regulation N if it does maintain documents for a period of ___ months describing or evidencing all mortgage credit products available to consumers during the time period in which it made or disseminated an applicable commercial communication.

24

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

3

To comply with the rules for originating a qualified mortgage, lender Lip must verify that the borrower Fiona has the ability to repay the loan and must retain the information used in the ability to repay analysis for ___ years after loan consummation.

3

Elwood is refinancing the mortgage loan secured by his home that is his primary residence. How long will he have to rescind the loan after he is provided a notice of the right to rescind as required by TILA and Regulation Z?

3 business days

Regulation B requires that applicants must be made aware of their right to receive an appraisal report created as the result of their mortgage loan application. This disclosure must be mailed or delivered to applicants not later than

3 business days after the lender receives a complete application.

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

45

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

5

A Statement of Adverse Action must either disclose a specific principal reason for the action taken or disclose the applicant's right to request the reason(s) for denial within ____ days of receipt of the lender's notification.

60

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

60

As set forth by the FCRA, when adverse action is based on information in a consumer report from a consumer credit reporting agency, the Statement of Adverse Action must include notice of the consumer's right to a free copy of his consumer report. The consumer's request must be made within _____ of receipt of the adverse action notice.

60 days

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

750 Since this is a 5/1 ARM, there is no adjustment during the first 5 years. Therefore, the start rate will continue to be the interest rate for the loan until the 5th anniversary of the loan and the monthly payment will remain the same as the starting monthly payment.

If all other conditions have been met, a lender must drop PMI coverage at a borrower's request when a new lender-approved appraisal shows that the loan has been paid down to _____ or less.

80%

The _____ was established in 1970 as the first law to deal directly with money laundering.

Bank Secrecy Act

For homes bought with VA-guaranteed loans, appraiser Stefani uses a _______to document an estimate of the value of the property to be purchased.

Certificate of Reasonable Value

The _____ helps consumers connect with financial companies to understand issues, fix errors, and get direct responses about problems. When a consumer submits a complaint, this company works to get a response from most financial companies within 15 days.

Consumer Financial Protection Bureau

The _____ enforces the Fair Housing Act including investigating any cases concerning the refusal to rent or sell a property, denying someone a dwelling, and falsely stating that properties are unavailable.

Department of Housing and Urban Development

Who is in violation of the Section 8 provisions of RESPA?

a title company who allows a mortgage broker to lease office space at below market rent

The TILA-RESPA Rule applies to which of these loan types?

adjustable-rate mortgage loans

Laura's name is on the National Do Not Call Registry. At what point after she closes a loan with ABC Mortgage must ABC stop contacting her to solicit new business?

after 18 months

What is NOT a purpose of HMDA?

allow the creditor to determine the risk of the loan by reviewing the race, sex, and national origin of the borrower

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

appraised value of the property.

The Office of Housing within HUD oversees what entity?

Federal Housing Administration

The _____ has the authority to enforce the rules found in Section 114 of the Fair and Accurate Credit Transactions Act that require certain businesses and organizations to develop, implement, and administer identity theft prevention programs.

Federal Trade Commission

The ______ within the GLB Act governs the collection and disclosure of nonpublic personal information to third parties.

Financial Privacy Rule

If the original balance of the loan was $200,000, and the monthly payment is $1,073.64 P&I with $833.33 applied to interest, what will the balance be after one month?

Find the amount paid on principal by subtracting the interest paid from the monthly payment ($1,073.64 - $833.33 = $240.31). When you then subtract the principal reduction of $240.31 from the original balance of $200,000, you find that the balance of the loan after one month is $199,759.69. Remember: As the principal amount is reduced, the amount applied to interest will also reduce.

TRID sets forth requirements on who is to provide and be listed in the creditor's information section of the Loan Estimate (LE) as a creditor. Which statement is NOT a requirement set forth by TRID?

If there are multiple creditors, record all the names of the creditors on the LE.

What form shows the income of a self-employed applicant that is part of a company that is a partnership?

K-1

All of these examples illustrate an individual engaged in loan origination activities that do NOT require licensing EXCEPT

Kirk, who provides financing repeatedly and with habitualness for the sale of multiple properties he owns.

____ is one of the key components of the BSA/AML Act.

Knowing your customer

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

Susie has been on her job long enough to allow the use of overtime in her qualifying income as long as the overtime is consistent. First, calculate monthly regular hourly pay: $19 an hour x 40 hours per week = $760; $760 x 52 weeks a year = $39,530 / 12 months = $3,293.33 a month. Next, calculate overtime: $19 an hour / 2 = $9.50; $9.50 + $19 = $28.50 an hour for time and a half; Now, figure monthly overtime: $28.50 overtime pay x 5 hours a week = $142.50; $142.50 x 52 weeks = $7410 a year; $7410 / 12 months = $617.50 overtime pay per month. Finally, add both monthly totals together: $3,293.33 + $617.50 = $3,910.83 total monthly income.

When the Written List of Settlement Service Providers provided with the Loan Estimate includes service providers affiliated with the lender, the AfBA disclosure must be provided to the applicant

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

The Federal Trade Commission's Telemarketing Sales Rule prohibits deceptive and abusive telemarketing acts and practices including establishing standards of conduct for telemarketing calls. This Rule prohibits telemarketers from calling anyone

before 8 a.m. or after 9 p.m.

All of the following are listed in Section B of BOTH the Loan Estimate and Closing Disclosure as services a borrower cannot/did not shop for EXCEPT the

borrower's title insurance premium.

All of the following are expenses associated with a mortgage loan that are most often shown on the Closing Disclosure as being paid directly out of an escrow account EXCEPT for

closing costs

When a Loan Estimate is provided to borrower Drew, it will be considered to have been provided in good faith if the actual closing costs are lower as shown on the _____ provided to Drew.

closing disclosure

A mortgage loan processor distributes a company business card with her name on it along with the unique identifier of the mortgage lender she works for. The loan processor hand writes a message on the card that states, "Call me to find out more about your loan options." This employee is

committing a prohibited act of misrepresentation in advertising which is a violation.

A _____ mortgage loan is made by an institutional lender or a private party with real estate as security for the loan that the government neither guarantees nor insures.

conventional

For unique property, such as a geodesic home, being purchased as a primary residence, an appraiser is most likely to use what method of appraisal in the absence of comparables?

cost approach

Each state's regulatory authority must establish procedures for

examining records of loan originators.

The Government National Mortgage Association

guarantees mortgages backed by federally insured or guaranteed loans.

Which of the following is an example of a subordinate loan?

home equity loan

The Loan Estimate disclosure requirement does not apply to all real estate loans. All of the following loan types are exempt from the Loan Estimate disclosure requirement EXCEPT

home equity loans

The primary purpose of the Fair and Accurate Credit Transactions Act is to protect consumers from

identity theft.

Which element of an ARM is a statistical report that is a generally reliable indicator of the approximate change in the cost of money and may be used to adjust interest rates?

index

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

jumbo

All of these are prohibited loan terms for HOEPA covered loans EXCEPT

late fees

A ____ is a financial encumbrance that is described as a nonpossessory financial interest in property.

lien

When a clerical numerical error has occurred to the Closing Disclosure and the initial Closing Disclosure has been delivered to his borrower, MLO Wyatt must

make redisclosure.

A Mortgage lender is any person who

makes a residential mortgage loan or lends money secured by a mortgage or deed of trust.

What cost is included in an APR calculation?

mortgage insurance

The ____ indicates the amount and terms of the loan and what the lender can do if the borrower fails to make payments.

mortgage note

As result of the Flood Insurance Reform Act of 2011, mortgage lenders are required to accept

non-NFIP-backed flood insurance coverage provided by a private entity if that coverage meets all the same requirements as NFIP-backed flood insurance.

An FHA-insured loan is an example of

non-conventional financing.

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

origination charges

When a prospective borrower calls an MLO with an inquiry about mortgage loan products and terms, what is the name of the process that a lender can complete that promises that the prospective borrower's situation has been investigated and, provided all circumstances stay the same, the lender is willing to loan a certain amount of money to finance a home purchase?

pre-approval

What document informs parties to a real estate transaction of current property ownership and lien information without providing an exhaustive search?

preliminary title report

The Mortgage Reform and Anti-Predatory Lending Act sets forth anti-predatory measures for existing high-cost mortgage loans. These measures include all of the following EXCEPT

prohibiting high-cost loans with adjustable rates.

As defined by the Dodd-Frank Act, a _____ mortgage is a home mortgage loan that meets certain standards set forth by the federal government. These standards are meant to achieve a product that has less risk of default and, if met, provide lenders with protection against potential legal challenges.

qualified

Under the conditions for a loan to be a _____ mortgage, the loan must be a 30-year, fully amortizing mortgage and the lender must verify that the borrower has the ability to repay the loan.

qualified

Ray is employed to take residential mortgage loan applications for a federally-chartered bank. To do this job, Ray must be a

registered mortgage loan originator

The provisions of the Real Estate Settlement Procedures Act are designed to do all of the following EXCEPT

remove limits on amounts that lenders can require borrowers to place into an escrow account.

Which of the following is NOT exempt from the restrictions set forth by Section 32 of Regulation Z for high-cost mortgage loans?

secondary lien secured by a residential investment property

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

seven

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

seven

Channeling prospective buyers or tenants to a particular neighborhood based on race, religion, or national origin is an illegal practice known as

steering

In compliance with ECOA, as lender Carrie looks over a borrower's loan application and is deciding whether or not to make the loan, she may NOT consider the

that the borrower's income is partially derived from the receipt of public assistance.

A higher-priced mortgage loan is one that

uses the average prime offer rate as an index to compare the annual percentage rate.

What loan type is NOT reportable under the Home Mortgage Disclosure Act?

vacant land loans

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

when a borrower has paid down to 78% of the original consummated value

As set forth in Section 32 of Regulation Z, which of the following is NOT a trigger that requires a lender to adhere to high-cost mortgage loan requirements?

APR which is 5.5% greater than the APOR for a nonconforming loan

Which of the following is NOT a mandate by the Federal Trade Commission?

Advertisements must have a time period listed for a fixed-rate loan advertised.

Which of the following is MOST likely to be a reason that a state will deny Fred's application for a state MLO license?

Fred was convicted of an act of fraud with a previous employer.

The SAFE Act is part of the

Housing and Economic Recovery Act

Trey takes out a $230,000 loan at 4.5%. What is the per diem interest charge (rounded)?

Multiply the whole, which is the principal amount of the loan, by the rate, which is the percentage rate of 4.5% or 0.045: $230,000 x 0.045 = $10,350 annual interest on this loan balance. $10,350 / 365 = $28.3561644 (or $28.36 rounded) per diem interest rate.

The unique identifier licensees are required to include on credit applications, a note or loan contract, security instruments, the Loan Estimate, the Closing Disclosure, and advertisements is issued by the

Nationwide Mortgage Licensing System and Registry.

Fannie Mae sets forth requirements for who must sign the security instrument that is part of a mortgage loan transaction. Which of the following is NOT one of the signature requirements?

Only persons who have an ownership interest in the security property and also have his/her income used in qualifying for the mortgage must sign.

The Homeowners Protection Act of 1998 is also known as the

PMI Cancellation Act.

When a borrower looks at a completed Closing Disclosure, in what section of the Closing Disclosure will he find the fees for mortgage insurance premiums and per diem interest?

Prepaids

After closing a refinance loan on Monday the 3rd (in a month with no federal holidays), ABC mortgage learns the borrower only received one of the two required copies of the Notice of Right to Rescind. ABC Mortgage calls the borrower who then signs the form on Tuesday the 4th. When can this loan fund?

Saturday 8th Generally, TILA requires that each consumer entitled to rescind must be given two copies of the rescission notice and the material disclosures. The rescission period does not begin to run until notices are provided to consumers as required. In this case, because notices were not provided as required until Tuesday the 4th, the recession period ends on Friday the 7th and the loan can fund on Saturday the 8th.

What section of Regulation Z sets forth requirements for loans that meet higher-priced mortgage loan criteria?

Section 35

An MLO takes an application for an owner-occupied property. Soon thereafter, she discovers that the borrower's actual intention is for the property to be a rental property. What is the BEST action for the MLO to take?

She should talk to her manager and the underwriter about what she's discovered.

Dominic obtains a $300,000 mortgage loan a 5/1 interest-only ARM with a 10 year balloon at a 3% start rate, a 2% margin, and 2/6 caps. The initial monthly payment for the loan is $750. On the anniversary date of the loan, the index being used adjusts as follows: Year 1: 2.50% (initial year); Year 2: 2.75%; Year 3: 3.25%; Year 4: 3.50%; Year 5: 3.75%; Year 6: 3.00%; Year 7: 2.80%; Year 8: 5.00%; Year 9: 6.50%; Year 10: 7.50%. What is the highest monthly payment attainable during the life of Dominic's loan?

The lifetime cap for this loan is 6%. Add 6% to 3% start rate = 9.00% maximum interest rate. $300,000 x .09 / 12 = $2,250 monthly payment maximum.

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

The lender bases the loan-to-value on the lesser of the sales price or the appraised value. If Laura is paying $230,000 on a house appraised at $225,000, the lender will loan her $180,000 ($225,000 x .80). That means Laura will have to make a down payment of $50,000 ($230,000 sales price - $180,000 loan).

The estimate for the interest rate shown on a Loan Estimate must be available for at least ___ business days.

There are no time restrictions.

Appraiser Sheila has been hired to complete an appraisal of a residential home for Lender XYZ. What is the standard form she should use to report her findings?

Uniform Residential Appraisal Report

Greg has a stable gross monthly income of $4,000 and recurring debts of $600. If he's getting an FHA-insured loan, what's the maximum monthly payment he would qualify for if the acceptable front and back ratios are 31%/43%?

Using the front-end housing expense ratio: $4,000 X 31% = $1,240 maximum mortgage PITI payment. Using the back-end DTI ratio: $4,000 X 43% = $1,720 maximum debt allowed; $1,720 maximum debt allowed minus $600 debt = $1,120 maximum mortgage PITI payment. When both ratios are used, Greg must qualify under both ratios, so the lower figure ($1,120) is the maximum monthly mortgage PITI payment he can afford.