NMLS PRACTICE QUESTIONS
A consumer had the right to inspect his HUD-1 Settlement Statemtn how many days prior to closing?
1 day
test mortgage transferred servicing rights of some of its mortgage loans to answer mortgage, Lender must send a servicing transfer statement to the affected borrowers how many days before the effective date of transfer?
15 days before the effective date of transfer a Lender must send the servicing transfer statement to the affected borrowers
when a telemarketer calls a person on the "do not call" registry in violation of the no not call regulations he is subject to a fine of
16,000$
R si a licensed mortgage broker, He wants to call former clients for referrals. He can contact them even if on the federal do not call list for up to
18 months
A lender is obligated to provide a borrower with a HUD-1 Settlement Statement how many days prior to closing?
1day
what is the variance allowed on adjustments for appraisals according to FNM and Freddie?
20%
what percentage variance on a Fannie Mae appraisal report is tolerable when dealing with comps?
20%
Truth in Lending provides for a right to rescind certain loans secured by a principal residence. The rescission period is
3 business days
an applicant for a real estate loan can not be asked about his
RELIGION
the risk that an agent may not have his clients best interest at heart is called
Principal-Agent risk
The purpose of a Market Conditions Addendum is to
Provide the Lender with a clear understanding of the market trends and conditions in a subject neighborhood
a 3/1 ARM is?
a fixed period adjustable mortgage rate loan in which the rate is fixed for the frist 3 years and then adjusted every year consequently to those.
what does HUD define as a "referral"
a lead generation company worker providing information on a broker to a customer
the primary purpose of ECOA is to ensure that
all borrowers get equal chance to loan
a property that is appraised with a higher than market value results in
an inflated appraisal
an appraisal is
an opinion of value
a copy of the appraisal is provided
at close of escrow
the HUD-1 Settlement Statement includes all of the following Except
housing expense ratio
if loan is fraudulent what actions are NOT typical
increasing borrowers interest rates
a conventional loan is a loan that
is not issued, insured, guaranteed by government entity
the Homeowners Protection Act (HPA) of 98 provides that a borrower with a good payment history has the right to request in writing the cancellation of private mortgage insurance when he pays down his mortgage to the point that
it equals 80% of the original purchase price or the appraised value of the home
which of the following is true of the COFI
it is the slow moving COST OF FUNDS INDEX
a Loan oroginator creates a marketing plan to make between 2-4k per loan. He agrees to do the 300k loan for his cousin for a 0.75% commission and 400$ processing fee. this transaction is
legal and Ethical because he is with in his marketing plan
The lowest payment option for an option ARM is
minumum payment
Included in the servicing of a mortgage loan are the collection and or remittance of payments that include interest, principal and escrow items fro the
mortgagee, mortgagor, and lender
a credit report will always display which of the following?
name and social security number
under the Gramm-Leach-Bliley Act a person is considered a consumer of a financial institution when the person
obtains credit from the financial institution for personal reasons
how to find penamty in dollar amount from a 125k house and a loan of 100k, when loan balance is at 75k with a 1.5% penalty
original loan amount * penalty percentage charge= dollar amount of penalty charge
a 240/60, 20k loan is made with interest at 9% per year. Which is true?
this is a ballon loan with a loan term of five years 240/12= number of years in loan 60/12= number of years until fully amortized and needs to be paid off or refinance
the 3 day right to rescission provided by TIl and regulation Z applies to a loan
to refinance a loan from the same institution that fails to cover the unpaid balance of the prior loan plus closing costs
how can one calculate the number of years it will take to recover the costs of refinancing a loan?
total costs/ monthly savings bc of refinance/ 12
which of the following would result in the combined Loan to ratio?
total of all loans/ property value
which of the following is true of an FHA borrower?
unless net rental income can be verified from tax returns, 75% nof gross rental income is counted as qualifying income
when is the appraisal disclosure required to be delivered
when complete application is taken
borrower right to receive appraisal with in
30 DAYS
a creditor must advise a mortgage loan applicant of the status of his application with in how many days of receipt?
30 days
prequal this borrower: dti is 40%, income is 10k, non housing expense is 1k a month. How much will the PITI be?
3k because the dti= housing expenses +non housing expenses/ gmi so 4000- 1000=3000
a home is appraised at 100k the borrower currently has a loan of 50k and an open end line of credit with a limit of 25k and a current balance of 15.5k what is his LTV
50%
for a 300k 3/1 ARM with a rate of 6.5% whaou would the per diem interest be based on a 360 day year?
54.17 300k*6.5=t t/360= per diem
Fannie Mae requires occupancy with in
60 days
purchase price 100k appraised value 150k loan amouont 50k and second loan 20k what is the CLTV?
70% = 50k+20k/ 100k= CLTV
which federal agency administers Regulation B implementing ECOA, Rgulation C implementig HMDA and Regulation Z implementing TILA?
FEDERAL RESERVE SYSTEM
in a qualification of an applicant who receives child support and alimony
CHILD SUPPORT INCOME CAN BE GROSSED UP
RESPA does not require lender disclosures of closing costs and procedures for which of the following loans?
CONSTRUSCTION LOANS
an analysis opinion or conlcusion as to the nature quality and value of a specific piece of real estate is an
Appraisal
All of the following are considered dwellings under the Home Mortgage Disclosure Act EXCEPT
A recreational travel trailer
which is not part of total Prepaid Finance Charge (PFC FEE)
APPRAISAL
the clause in a mortgage that allows the lender to foreclose if the borrower defaults is the
Acceleration Clause
A COFI index is defined as
COST OF FUNDS INDEX
what is the best description for a 360/180 loan?
Ballon loan
Right to Rescind is not valid on which of the following
Commercial Purchase
The ECOA prevents discvrimination against which of the following?
DISABILITIES
Who is the entity that administers RESPA?
Department of Housing
which law prohibits a lender/ mortgage broker from makinf any oral/ written statement, in advertising or otherwise to applicants or prospective applicants that would discourage a reasonable person from making or pursuing an application
ECOA
SSPL should be prepared based on? (SSPL= SETTLEMENT SERVICE PROVIDER LIST)
Final itemized costs
what is Fannie Mae (before market changes and government intervention)
Government supervised but privately owned
RESPA is adminstered by
HUD
what agency is TILA regulated by?
HUD
RESPA requires that a borrrower be given which document at closing ?
HUD-1 Settlement Statement
A woman may be denied credit on the basis of any of the following EXCEPT
Her current pregnancy is an indication that she may stop working
a homeowner had a home worth 200k. he has an outstanding loan of 165k and a HELOC with a limit of 30k which he has drawn 12k. Which of the following is not true?
His TLTV is 94% you must calculate LTV, CLTV, and TLTV TLTV is higher than CLTV and LTV
a mortgage broker refers a loan to another broker, CAN the referring broker receive anf compensation?
It is Ok to get referral fee if the fee comes from the borrowers cahs to close and is presented on the HUD
when a federally related or insured lender learns that a property is in a flood zone, it mist
INFORM THE BORROWER
what is considered a illegal referral?
Lead generating loan originator gets % of loan amount on closed deal
if the loan amounts, maturity dates and interrst reats are the same for loans A and B, but loan A is a straight (interest only) loan and loan B is fully amortized
Loan B will have higher periodic payments
which of the following would be included in an escrow or impound account?
Mortgage insurance premiums
it is ok to discriminate on age when?
NEVER
the HUD-1A Settlement Statement is designed for whenn
NO SELLER IS INVOLVED / REFINANCE
As the deadline approaches for the closing date established in the buyer's sale agreement, the buyer's loan application has not yet been approved but seems to be headed for approval. the loan originator should...
Notify the real estate broker to try to get an extension of closing deadline
The UNIFORM RESIDENTIAL LOAN APPLICATION (1003) includes a section reqiesting information for government monitoring. applicants must complete this section
ONLY IF THEY WISH
A lender who preys upon unsophisticated borrowers in order to strip them of their home equity is engaging in
PREDATORY LENDING
the acronym PFC stands for
PREPAID FINANCE CHARGES
ECOA serves to
PREVENT DISCRIMINATION IN THE MORTGAGE LENDING INDUSTRY
Inclusion of the premium for single-premium credit life insurance in the principal loan amount with out the borrowers informed consent is one example of
Packing
what methods are not allowed to deliver the privacy policy?
Poster in odd location
Purpose of RESPA is
Regulate closing process
the federal regulation that implements the Real Estate Settlement Procedures Act (RESPA) is
Regulation X
the type pf loan that does not require ant verification of assets or income or periodic repayment is a
Reverse Mortgage
a borrower with less than perfect credit or othere risk factors may qualify most easily for what type of loan?
Subprime loan
at closing a borrower may deposit funds to establish reserves for which of the following?
TAXES AND INSURANCE
what disclosure would show if a loan has a balloon payment or not?
TIL
the cost of a loan is shown as an annual percentage rate in the
TIL disclosure statement
a lender can be protected from loss encumbrances or a defective title through
Title insurance
which of the following statements regarding title insurance is true?
a borrower is required be the lender to pay fro the lenders title insurance
a loan applicnats employment is usually verified by a
VEO (VERIFICATION OF EMPLOYMENT)
the truth in lending form provides
borrowers with an idea of the total closing costs and finance charges
who orders table funding "when closing in their own name"
brokers/ third parties
the TIl is not required on any business or commercial credit lines being used for any
business transaction
interest onlu has what feature?
can be paid off faster than fully amortized
what is a convertible ARM? it allows the borrower to do what?
change from an adjustable rate to a fixed rate mortgage
with a full disclosure to the consumer and a contractual agreement requiring confidentiality but the third party a financial institution can provide nonpublic personal information to a non affiliated party
for the use of Marketing the financial institutions own products
the rules relating to the Federal Trade Commission's "no call" registry allows calls to persons on the "no call" list
for up to 18 months after business transaction has been completed with them and up to 3 months after they inquiry
If a lender discovers that fire policy is not in effect, what can happen?
forced place insurance
a 2/1 buydown
reduces the interest rate by 2% the first year and 1% the second year, until it reaches its original principal interest for example 1st year=4.5% 2nd =5.5% 3rd= 6.5% 4th= 6.5% and so on
a defeasance clause
states the lender will release the lien when the loan is repaid
PMI AND MIP are intended to cover whose risks
the Lenders
following section IX (acknowledgements) in the 1003 loan application, the form is to be signed to signify that
the applicant represents that all information contained in the form is truthfully represented
which of the following is true regarding prepayment penalties in todays mortgage market?
the are almost always used in predatory loans
which of the following need not to be given to a consumer who applies for an ARM loan?
the interest rate upon the first adjustment
service release premium represents
the profits a bank makes when selling the servicing rights to a loan
